If you think about it, using adwords the only winner is google in the long term.

Say you start by advertising for $1 per click, and you eventually get a sale after 20 clicks. So it cost you $20 for that sale, to google.

Now, say your profit from that sale was $40, less the $20 to google, you are still in front.

But you don’t get many sales, it took you like a month to get that, so you increase the bid.

If you think about it more, say you and another competitor has a similar product, and are both bidding.

So as you increase your bid, so does your competitor. So you move you bid up to $1.50 ,  the 20 clicks now costs $30, and you are making less profit – more is going to google. You make $10 profit, and google makes $30.

So you think, you make more than $40 per sale, or you have a business where when you get a customer, they stay for a while, and perhaps you make $1000 per customer. It doesn’t matter, your competitor is the same, and pretty soon the bids are up to $5, or $10, so for the 20 clicks – we are up to $200 profit. After a while, you and your competitor will bid up things more, and google is the only winner.

So given there is a few companies in your industry are bidding on adwords, and you compete with each other. The more competition there is, and the more a generic your product is, the more google will profit.

If your product is very unique, adwords might work a little better. Using 3 and 4 keyword search terms, and very specific advertisements and landing pages, and adwords might just work.

But if you are that unique, and have your marketing organised, you’ll find you don’t really need adwords.

My suggestion to small business owners – get your branding and differentiation clear, get your website more clear about why you are different first. Then , and only then, give adwords a go.