I have to be honest with you… I never imagined I’d be writing this blog. My first introduction to the world of marketing was in paid search (I specialized in it for a few years), so it will always have a special place in my heart. That said, I feel as though paid search has started to turn into something I don’t recognize. What used to be a reliable, affordable lead-gen tool seems to have morphed into an incredibly expensive, overly competitive marketing channel that everyone participates in just because they feel they have to. But lately, I’ve been asking myself, “Do we really have to? Is paid search an absolutely necessary pillar of an effective MSP marketing strategy? Are there better ways we can be utilizing our budget?”
While I don’t have an objective answer to those questions (is anything truly objective in marketing, anyway?), I want to highlight a handful of reasons I’m starting to lose faith in paid search.
Before jumping in, I should clarify a couple of things. First, I am speaking purely from the standpoint of MSP marketing. I have clients in the ecommerce space, and Google Ads is an incredibly effective tool for them that delivers a consistent ROAS. It’s rare that I would recommend an ecommerce client not leverage Google Ads in some capacity. And second, our MSP primarily targets businesses in the Chicago DMA. It’s a very competitive market; especially for MSPs. My opinions/insights probably aren’t as applicable to small/mid-size markets.
Alright, enough clarifying. Let’s dive in.
Technology Keywords Are Over-priced
The first reason I’m losing faith is cost. This is the obvious one, but I think it’s worth breaking down a bit. Wordstream’s 2020 Google Ads benchmarks report indicates that the Technology vertical has one of the highest average search CPCs at $3.80/click. Only Consumer Services ($6.40/click) and Legal ($6.75/click) are more expensive. Technology is a broad term, so let’s hone in on MSPs. The Google Ads Keyword Planner tool (set to the Chicago DMA) shows that high-value MSP keywords like “managed service provider near me”, “IT services company”, and “IT outsourcing companies” have average CPCs that are well-above $50/click. I’ve even seen them break $100/click, depending on the day/time. These CPCs have been rising year-over-year as well, and they’re showing no signs of stopping any time soon.
I get it. New accounts are incredibly valuable to an MSP, so we can’t expect a particularly low CPA. I could stomach $100/click if the clicks were reliably high-quality. Unfortunately, that’s not always the case. That brings me to my next point.
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Lead Quality Is Disappointing At Best
The second reason I’m starting to lose faith in paid search is quality. I don’t know about you, but I’ve been somewhat disappointed with the quality of leads we get through paid search. It feels like the majority of lead submissions we get through that channel are people looking for a job, trying to sell us something, or just good old fashioned spam. Sure, we get qualified buyers that are actually in the market for managed services, but they are the minority.
You can (and should) add keywords like “job”, “hiring”, etc. to your negative keyword list, but that isn’t always as effective as you might think. While I wish everyone was incredibly specific when conducting Google searches (would it kill you to put a little more than just “IT company” when you’re looking for a job?), it’s not the reality. It’s worth looking into services like Cheq and ClickCease that exist for the sole purpose of helping you avoid spam clicks through paid search, but they can only be so effective.
Keyword Data Is Becoming More Obscure
My third reason for losing faith in paid search is data. I will never be one to complain about the increasing protection of user data, but we do need to face the fact that our jobs as marketers are going to change quite a bit in the coming years. Julie F. Bacchini, President & Founder of digital agency Neptune Moon, recently said:
Between Google Ads limiting access to search query data and the coming obliteration of tracking cookies as we know it, digital marketers are going to have to adapt in a pretty major way again in 2021. The bottom line for 2021: be ready to be flexible.
And she’s absolutely right. Just a few months ago, Google announced that their search term reports (a crucial resource for refining your paid search strategy) will only contain search terms of a “significant volume”. What is that volume, exactly? No one really knows, but I believe this is just the tip of the iceberg. Expanding regulations like GDPR and CCPA are great for society as a whole, but they should also make you rethink how you allocate your budget. How much data needs to be masked before you simply can’t optimize your campaigns properly?
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Paid Search Has Never Been More Crowded
The final reason I’m losing faith in paid search might be a counterintuitive one: because everyone is doing it. Maybe it’s the contrarian in me, but the more our competitors market through a specific channel, the more I want to avoid that channel. And to my first point, every additional competitor that bids on a keyword makes that keyword more expensive. At a certain point, you have to say “enough is enough” and start looking for a new, more affordable opportunity that your competitors haven’t discovered yet. No one ever got ahead by following the herd, right?
Look, I’m not saying that paid search is dead or that you need to cut your paid search budget immediately. There is still value to be found and money to be made through that channel. All I’m saying is that maybe paid search doesn’t need to be an automatic staple of every MSP’s marketing strategy. If a good chunk of your marketing budget is allocated to paid search and you aren’t already doing this, consider doing a deep dive into what your true CPA is for qualified leads and for new accounts. Is it really profitable for you? Is there somewhere you could reallocate some of that spend to bring your blended CPA down? The digital marketing landscape is growing and changing every day, so it’s not a matter of if today’s go-to marketing channels will eventually become obsolete; it’s a matter of when.
So, do you agree? Disagree? Just want to talk shop? Reach out on LinkedIn! I’d love to discuss.