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Estimated reading time: 5 minutes.
Problem: You are considering Google Ads. But it is complex and keeps changing. Is this something you can do yourself? Outsource? Should that be an in-house employee, an agency, or a freelancer? And at what cost? The last thing you want is burning money on an advertising budget and not getting enough sales in return.
My name is Mark, and I own a large webshop myself, which managed by my staff. Hence, I have time to work for Wolf+Bär and love to help others. Hopefully, you gain from my blog post. I focus a bit on webshops, but for Websites that sell services and need to generate leads, it works exactly the same way: 'How much do I pay Google and what does it give me back?'.
In-House Vs. Out-House: What's the Best Solution for Your Business?
The above question was exactly on my mind when I started out ten years ago, and I tried all options. Learn from my mistakes and make the right decision. It can literally make or break your business.
What work needs to be done?
Step 1: Connecting your Site with Google Ads
Whether you do it yourself or hire an employee to do it, connecting your site with Google Ads will take you approximately a week. There are free YouTube videos out there that will guide you, mostly for popular systems like Shopify, WordPress/Woo, Magento, Wix, and Shopware. It's a bit technical, but what happens behind the curtains is that a tracking pixel is installed. When the customer then searches on Google for your product, sees your ad, clicks on it, and buys it in your webshop, then it is a measured conversion. Setting up that pixel is key.
Step 2: Setting up campaigns in Google Ads
This is already very complex. You need to build a structure and understand the types of campaigns, ads, networks, platforms, groups, product groups, and much more.
Here is what the Google Ads admin panel looks like.
You see the Tab 'Campaigns' and it's data points. Messages from Google. There is a lot of information to manage.
Step 3: Optimizing & being profitable
Okay, so you have it connected, you set up a campaign and allocated a budget. Now how to get the most out of that budget?
I give $1 to Google as a budget for an online Ad.
I got a sale in my webshop for selling a book that cost $4
The Return On Ad Spend (ROAS) coefficient is 4
My gross profit = $4 - 1 = $3
Now it depends if that $3 covers my other costs (shipping, purchasing the book myself, etc.).
Yes? that ROAS number works for me. I might want to give more budget to Google. And I make this decision not based on a 'feeling' but based on data!
No? then I need to optimize. Is the Ad itself correct? Can the Site be optimized? And a million other screws that can be adjusted.
The name of the game is getting that ROAS to a target number so you are profitable. And keeping it at that level consistently over a longer period.
Inhouse - DIY or existing employee/ Vs. new employee
In which situation should you Do It Yourself or assign an existing employee?
You have time for YouTube videos and calling Google to set it up yourself. The goal is a simple campaign, for example just a $ 2-a-day budget to make sure nobody abuses your brand's name by showing his Google Ad.
In which situation is a new dedicated employee a good option?
You want a low risk of burning the advertising budget. You are dependent on Sales in a Webshop or continuously generating leads for your business existence. And you don't want to outsource, keeping the knowledge in-house.
Please read the above (Inhouse) first.
What you should know before you see the costs and fees
- Now that you know what ROAS is, you understand that Google Ads are not about paying money to Google to get traffic; it is about measuring what you get in return from Google for that advertising budget. Here is where the expert steps in.
- Work to be done is as above: Connecting your site, creating ads, optimizing the ads, and also your website for conversions.
- Period of 3 months, otherwise Google algorithm does not dial in
- Sufficient Adwords budget, otherwise Google algorithm does not dial in
Average costs of an Agency or Freelancer (2023)
Circa $1750/month is what is will cost you.
Circa $ 750.-/month on labor costs by the agency
Circa $ 1000/month on advertising budget
Total $ 1750/month , for 3 months $ 5150.-
After these 3 months you can make a business decision based on data (facts):
- Do I sell my products profitably with the ROAS achieved?
- Can I afford with that profit the further monthly cost of an Agency or freelancer?
"No? Well, at least now you know. You can write off Google Ads to scale up in a profitable way. Maybe instead, you will continue with a small budget just for visibility.
Yes? Now you can scale up (as long as you have enough stock).
Outhouse: agency or a freelancer?
The line between Agency and Freelancer keeps getting thinner. Also, a good Freelancer will address the fact he needs 3 months and a sufficient budget to make it work. Now a Freelancer has an hourly fee and an Agency usually wants either a fix monthly amount, a percentage of the Ad budget, or an hourly fee. Up to you to make a deal.
In which situation go for an Agency?
You want a no-risk of burning advertising budget. Your business is 80% or more dependent on online sales. Either a Webshop or a lead-generating Website. You have a 100% dedicated account manager, always available as he is part of a bigger team and in case of Illness has a replacement.
In which situation go for an Freelancer?
You want a low risk of burning the advertising budget. Your business is 50% or more dependent on online sales. Either a Webshop or a lead-generating Website. It does not hurt that you can't reach your freelancer for a few days because he is a one-man band.
Reflecting on my webshop for the past decade
A decade ago, I lacked knowledge about advertising and wasted a significant portion of my marketing budget. Initially, I tried managing my Google ads myself, yielding no results but losses. Seeking the help of a freelancer brought slight improvements, but their limited availability prompted me to explore other options. In a final attempt, I opted for the services of a professional agency found online. Surprisingly, the Return on Advertising Spend (ROAS) proved profitable for my webshop surfdeal.ch, marking a turning point. The agency evolved over the years, adapting to the dynamic nature of e-commerce and crafting long-term strategies to effectively compete with giants like Galaxus and Amazon. Today, our focus is on innovative approaches like 'Google Automated Discounts' to thrive in the challenging "Race to the Bottom" in price competition. Managing various aspects to remain both relevant and profitable is an ongoing challenge, but I've learned to entrust the task of wisely allocating the advertising budget to the expertise of professionals, as avoiding wasteful spending is my top priority.
Find out what works best for you. DIY/ existing employee, new employee, agency or Freelancer?
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