There’s certainly been a lot of noise being generated by medium-sized companies, complaining they’re no longer getting the same ROI from paid search – especially from Google AdWords.
I’ve been taking a look at the trends and believe this is simply the continuing maturation of the paid search channel. Here’s how it’s developed thus far.
- Stage 1 – Medium and Large companies spend huge amounts of money on banner ads. Small companies can’t compete, so they start experimenting with paid search and get great ROI with little effort.
- Stage 2 – Medium companies start experimenting with paid search. Their campaigns are not very targeted but they’re able to get great ROI with little effort, so they start pumping in more money. Meanwhile, the small guys find that they can no longer compete for generic keywords, so start targeting the “long tail” and find there are great returns to be had from more targeted keywords.