* The Business of Software

A former community discussing the business of software, from the smallest shareware operation to Microsoft. A part of Joel on Software.

We're closed, folks!


» Business of Software FAQ
» The Business of Software Conference (held every fall, usually in Boston)
» Forum guidelines (Please read before posting!)


Andy Brice
Successful Software

Doug Nebeker ("Doug")

Jonathan Matthews
Creator of DeepTrawl, CloudTrawl, and LeapDoc

Nicholas Hebb
BreezeTree Software

Bob Walsh
host, Startup Success Podcast author of The Web Startup Success Guide and Micro-ISV: From Vision To Reality

Patrick McKenzie
Bingo Card Creator

Why I Am Going To Spend Less On Google Adwords From Now On

Five years ago I was lucky. In a certain area all the software products were written by people with knowledge of finance, but really had very poor software skills. All the products were quite frankly crap.

I came along. I had little knowledge of finance, but I was a hard core software developer with decades of experience of writing difficult code and never giving up.

I did research. I did experimentation. I found new ways to do things efficiently. I totally killed the competition with my software product. People loved my software product.

I am not saying I'm smart. I was lucky and lucky to be a competent software developer in a niche occupied by poor quality ones.

I ended up coming third in the natural Google search rankings on the first page. This lasted for years.

Enough money rolled in every month. I gave Google 5 - 10% of my monthly income. Perhaps this was a mistake as I had high natural search rankings and was paying for people to click on an advert even when I was at the top anyway.

I must have given Google Adwords a small fortune over 5 years. But I didn't care much. Maybe that means I'm a poor businessman. I reckoned Google deserved it as most of my traffic was due to them anyway.

But in January 2013, Google changed their algorithm and I dropped off their index after being 5 years at the near top. Now it has stabilized and I'm back to page 2. Web traffic has halved but it is still high enough.

I think we have enough customers that know and love our product to easily survive half the usual traffic.

Over the past 5 years, I've noticed the competition occasionally advertised on Google Adwords. They do it for a few months and then give up. Currently none of my competition is on Google Adwords.

Even though the cost per click has gone up from 5 cents to 60 cents over the past 5 years, I am noticing now clicks are 75 cents. In fact 75 cents clicks are getting thin on the ground and most clicks are over 1 dollar.

This is getting silly. I am simply not paying these rates.

The first page of Google results in my niche is now pretty much full of junk.

I really don't like what I see and I'm not going to fund it any longer.

If Google are going to spank my website and inadvertently push me to spend more on Adwords, I am not going to play ball.

If necessary I will create a total new website  and a new domain. I'm not going to be a sucker.
DontTreadOnMe Send private email
Saturday, March 09, 2013
Well, it depends really. Do you know how much it costs you to acquire customer through Google alone? Meaning did you do tracking to know what your sell through rate is?

If that is acceptable then there is no reason not to go full bore with Adwords.

But, if its like in our case then definitely stop spending any money on them. What we discovered about 3-4 years ago was that we were paying $500-$900 per month for Adwords and absolutely NONE of those clicks ever bought anything. Not even single license. We did this tracking for almost 6 months and then decided to stop Adwords completely. As expected, this had no impact on sales whatsoever.

I am sure Adwords work for somebody, but you need to really track what your sale-through is for Adwords to see whether it works for you.
Blocky Send private email
Saturday, March 09, 2013
I understand your frustration. But Google are so vast that if every reader of this forum suddenly dropped their Adwords spending to $0 overnight (which they won't), Google wouldn't even notice.
Andy Brice Send private email
Saturday, March 09, 2013
I think there is a clear pattern that has developed in the online services world: the unknown online business delivers fantastic value at first. Then it gets better known; then it gradually raises its prices and degrades its terms of use, until every freaking thing you'd actually want from them is a paid add-on item or has multiplied in cost so much that it makes no sense to bother with it.

So, every online service provider with some kind of advertising angle always, without exception, eventually screws its customers and users.

A few examples:

Yahoo directory inclusion: an early one; back at the start of the web this was a free service

LinkedIn - gradually choked off the ability to view unconnected members, and to message group members directly; now you need premium add-on services to message or to see profiles with hiding of information fields.

Facebook - they just created the sponsored post - so non sponsored posts and much less likely to be seen, even by followers.

Google has been following suit by raping advertisers with opaquely high click through fees.

Every online provider eventually decides to blow and suck as an ongoing growth strategy.
WannabeTycoon Send private email
Saturday, March 09, 2013
Hi Andy.

Yes there is some frustration.

It is ironic I have paid Google via Adwords a small fortune over the past 5 years.

Most of my competition have only temporarily dabbled with Adwords and so hardly paid anything.

At the moment, Google have inverted the old ranking. My website is now below most of the competition.

This is ironic. The companies and individuals that have paid Google nothing now have higher natural page rankings.

I'm the only one using Adwords and I'm much lower.

I've tested out some of their products. Ironically Google is ranking the worst one of my competitors the highest. Their software is barely usable and has no following.

I have Costs Per Click that are so high I can't bid on them as they would devour all my profit now. High Costs per Click despite no competition using Adwords. Google have put up the costs to breaking point bit by bit.

About 6 months ago, one group in a non-Western country reverse-compiled the core part of my software and put it up for sale on a very crude website. Google actually rated their website above mine for certain terms! Eventually I managed to get these people knocked off the Internet for copyright infringement and I had to go through their hosting companies and payment processors. But for a while Google ranked this silly website with software stolen from me, higher than my website. Needless to say this scared me a bit and I increased my copy protection still further. I was actually impressed these thieves managed to get round my copy protection.

I never said in this new post anything about other people quitting Adwords.

People should do the right thing for themselves and try to do the right thing regardless of whether they think it will have any effect.

It is never the wrong time to do the right thing and you should always do the right thing regardless of whether you think you will succeed or not.
DontTreadOnMe Send private email
Saturday, March 09, 2013
@ Don'tTreadOnMe

Don't tread on us.

Sorry Couldn't help it :) Broadly speaking I completely agree with your outlooks toward Google
alexandar Send private email
Sunday, March 10, 2013
@ Don'tTreadOnMe
I totally agree with you. I think Google has deteriorated over the last few years, and not just in terms of AdWords, but also in terms of search results relevance, which as a consumer of their search have noticed.
Which is why, we decided to try Bing, both as an advertising platform and search engine. Bing's CPC seems to be quite a bit lower than Google's for the same keywords (at least in our case), and their results are surprisingly more relevant. I tried various keywords in search (3 or more), and only a third of Google's listings had all of them in their title, while with Bing - all listings had all keywords in their titles, which I think is more relevant, because you do look at the title first.
Also, as a now former Google search consumer, I noticed that the relevance of their results dropped even further in 2013, so apparently their algorithm change not only hurts site owners, but customers too.
In fact it is quite silly now, where's previously we used to be #2 for the name of our product (without the company name), which is quite a bit generic and not too specific of a name (no made-up words), we are now like #20 on Google, but #1 on Bing, and that considering that key phrase appears at least 10 times on the page in various combinations. In fact Google's first result for the key phrase consisting of 3 words has only 2 of the 3 words in the title, and the third one is completely different! How is that being relevant?
BTW, if anyone has some specific details as to what exactly did Google do in regards to changing it's algorithm in 2013, it would be interesting to know...
PS, I am not a huge fan of Bing at all, but presently, to me, it seems to be better both as a search engine and an advertising platform (though their advertising UI is much inferior to Google's).
George Send private email
Sunday, March 10, 2013
I completely disagree. Paying for Adwords doesn't improve your ranking. Your ranking is calculated through the Google Algorithm (which was obviously changed, and resulted in your penalization).

Since you were penalized, did you receive any emails in your Webmaster center? They'll send you an email if something is wrong.

Did you change your website copy/HTML or did you lose a major backlink? Are you tracking your backlinks and do you know/realize who are you major ranking sponsors. (you can't naturally 'rank', you need some backlinks for Google to trust you).

Did you competitors build more backlinks and popularity to kick you from the first page?

Stop thinking about the conspiracy theory, you are a very particular/tiny customer. The 5 years fortune you are talking about is probably earned by Google in a few seconds.
Abid Omar Send private email
Sunday, March 10, 2013
Abid, my post is meant to be read as a whole.

After my first post in this thread, I posted a follow-up outlining how an individual or group based in India reverse compiled the core of my software and put in on a simple Wordpress website and started to sell it. Ironically Google ranked this new website higher than mine. Eventually I got them knocked off for copyright infringement and haven't been bothered by them since.

I never directly said Adwords and search ranking are connected. I merely pointed out I paid Google a lot of cash over the years and it it is ironic I now have the lowest ranking in my niche. This is doubly ironic as I was the first person to get reliable software released for the niche I was for. I practically created the niche.

Back to what I said. My post is meant to be read as a whole. Even if you discount my "conspiracy" theory, Google Adwords are still "raping" advertisers with vastly increased costs per click. These costs per click are between 2x to 10x more than bing.com . They are getting greedy.

My original comment stands. The rates Google are charging are just plain silly.
DontTreadOnMe Send private email
Sunday, March 10, 2013
> "My original comment stands. The rates Google are charging are just plain silly. "

I feel your pain and I also get annoyed at what I see as unreasonable charges for various things in life, but I guess, unfortunately, in the end, the rates anybody charges are what the marketplace will allow.  Apparently Google thinks the marketplace will tolerate this rate well.  Time will tell, and I hope you are right and the marketplace does not tolerate these rates forever.
Racky Send private email
Sunday, March 10, 2013
I was looking to buy something, it was something really obscure with a very specific unique name to it.

The google results were pages and pages and pages of total BS, looked like spam sites.

So frustrating, I could not figure out WTF these results were.

And most of them seemed to be exactly the same content scrapped from somewhere, link farms or such.

Had google been hacked?

Finally in exasperation I tried searching for it on Amazon.

I was immediately presented with three sources from which I could buy it at different prices - through Amazon's merchant system.

As I understand it, Amazon doesn't charge for listings, they just take a cut of actual sales.

If enough people figure out they should be searching on amazon instead, google is doomed.
Scott Send private email
Sunday, March 10, 2013
"Every online provider eventually decides to blow and suck as an ongoing growth strategy."

Every online provider starts out with shareholders who bought cheap at the beginning. If is grows , the shares become more expensive. More recent shareholders push prices up to recoup their money.(they paid more) and that is how the cookie crumbles. Once upon a time, common stock meant no vote. Now they can sue the CEO and the board. It is not really greed as much as desperation. When you buy late and high, then you are desperate enough to wreck the company.
cn Send private email
Sunday, March 10, 2013
"Once upon a time, common stock meant no vote"
I think you mean preferred or possibly Class B stocks.  Common stock is what owns the publicly traded corporation.  Preferred shares almost never come with voting rights, so in order to sell them, holders usually get better dividends, and if the company goes bankrupt, they are ahead of common shares in getting a piece of the assets.
Howard Ness Send private email
Sunday, March 10, 2013
You are right. I meant to say "once upon a time common stock meant the ability to vote" now it means to sue the company any time you lose money.
once again typing too fast...
cn Send private email
Sunday, March 10, 2013
+1 to Scott. I've noticed Google presenting weird results like that, when you search for something. Like you, Amazon is my first port of call if I'm looking to acquire something.

Sometimes Google is awesome. If you are looking for a "fact", not anything related to buying "stuff", then it is unbeatable. However, any search for something that can be bought seems like a waste of time, as the results are often overwhelmed with cookie-cutter sites to "buy xxx".

It is like the infamous Google algorithm 'gives up' and just dumps a load of useless results. This is not the case though, as the results you need are on page 2 or 3, so all those BS links must have been paid for for that search-term and appear higher than real links.
Scorpio Send private email
Monday, March 11, 2013
Google search has always been basically useless for me when looking for something to buy or just looking for prices. I always get best results from Amazon and eBay in these cases.

I cannot recall ever buying anything online found through Google.

Google search has been always great when searching for "article" type things, like documentation, blog posts, reviews, etc.

Coincidentally I disabled 2 AdWords campaigns today that I have been running for past 2 months experimentally. They do not bring any profit and I spent many hours on these campaigns trying to get anything useful from them but it just does not work. I was either getting lots of useless visits (I suspect most are fraud clicks, especially from Display Network, at least they looks like fraud when you look at Analytics data) or if I tried to set reasonable CPC I just do not get enough visits to be worth spending time on.

AdWords are definitely getting worse and worse. Or probably the competition is able to use it more effectively. I just do not have the time and patience to do the same. It just does not make sense to spend time on it when you can get organic search traffic for a lot less effort and without paying a cent.

As I said in my other post AdWords became a quick experimental traffic generator and a billboard to advertize our brand name without paying attention to the immediate ROI.
B2B Send private email
Monday, March 11, 2013
Just a thought... Since people are now saying on this group that they never buy anything from Google searches and prefer to search on Amazon...

How many people here are selling downloadable software on Amazon?

Andrew Gibson Send private email
Monday, March 11, 2013
@Andrew - I actually filled out their form a week or 2 ago, but haven't heard anything back from them.
M.B. Dude Send private email
Monday, March 11, 2013
I am not, but after writing my comments I started looking into it. Likely will do it.
Scott Send private email
Monday, March 11, 2013

This topic is archived. No further replies will be accepted.

Other recent topics Other recent topics
Powered by FogBugz