Search engine advertising with Google Ads remains one of the most efficient digital advertising methods for generating business. Rarely can you reach diverse target groups with such low wastage. However, Google Ads is no longer what it once was, and there are various reasons for this. Much has changed in the market, but not all developments at Google have been for the better. Here is an overview:
More Competition
The ability to precisely target audiences and generate business with Google Ads has become well-known. Consequently, competition has significantly increased in recent years. This results in stronger comparisons of one’s offerings with those of competitors, inevitably leading to lower conversion rates. Therefore, it is more important than ever to analyze competitors on Google Ads, identify their weaknesses, and determine what can be done to stand out as the best choice in the decision-making process of searchers.
Higher Click Prices
Click prices on Google Ads are based on an auction principle linked to a relevance rating. The more competitors there are and the more aggressively they advertise, the higher the cost per click. In 2008, it was still possible to generate high-quality clicks for half a euro in many areas. Due to increased competition, this is rarely the case today, and click costs continue to rise year after year, ultimately leading to higher conversion costs. Some search environments are so fiercely contested that the cost-per-click no longer makes economic sense, and advertising with more wastage often achieves a better price-performance ratio.
Therefore, it is important to keep wastage on Google Ads as low as possible, ensuring costs are incurred only for clicks with a real chance of generating business. Additionally, conversion rates should be optimized. Nevertheless, it must be regularly evaluated whether search engine advertising with Google Ads makes economic sense or if it is better to invest in other acquisition channels.
Less Transparency
In recent years, Google Ads has become increasingly opaque and more of a black box. Advertisers, for example, see fewer and fewer search terms on which ads were displayed and where clicks or conversions occurred. This makes it harder to limit wastage, leading to a less precise targeting of audiences and thus a lower conversion probability. This is only possible because Google has immense market power and (still) does not fear competition.
Campaign types like “Performance Max,” which run almost entirely automatically, push the lack of transparency to the extreme, providing little information on how the advertising budget was spent.
Lower Conversion Rates
Another phenomenon is the declining trend in conversion rates over the years. This has various causes. On one hand, there is more competition, so users compare significantly more offers than before, ultimately lowering the chance of a conversion compared to when advertising alone.
Another reason is the changed user behavior and decreasing attention span. Mobile usage has increased, often resulting in shorter dwell times. Additionally, trends like TikTok or Instagram have contributed to a generally shorter attention span.
Another factor leading to lower conversion rates is the increasing opacity of click origins. This makes it harder to limit wastage, reducing click quality and, consequently, conversion rates.
Less Control
In recent years, Google Ads has increasingly taken control away from users, introducing automatic mechanisms instead. A notable example is the “Phrase Match” keyword option, which has been significantly changed. Previously, this option allowed precise campaign targeting while considering related searches. Today, “Phrase Match” is more akin to “Broad Match,” causing ads to be much more widely dispersed. Even the “Exact Match” option is no longer as precise as it used to be and displays ads in a much broader context.
Another example of reduced control is the automatic optimizations in account settings, which are enabled by default. These options are deeply hidden in the system, so only experienced users will find and disable them.
These changes lead to higher wastage and make campaigns less efficient. Additionally, deep expertise is required to recognize and circumvent the numerous pitfalls.
Less Data
In recent years, data protection has significantly tightened, and not all users consent to the use of cookies. As a result, less data about specific user behavior is available through Google Ads campaigns, and many conversions can no longer be captured.
This data reduction makes it harder to derive optimization measures, affecting campaign efficiency. As a performance agency, we often work with dedicated landing pages for Google Ads campaigns or pass campaign data through the link to the website. This way, we can still see if a conversion came from the campaign, even if it is not analytically captured.
The Competition Has Become More Professional
When I first managed Google Ads campaigns in 2008, there were few other advertisers, and strategies were generally not very sophisticated. It was easier back then to gain an edge over the competition. Today, Google Ads is a popular advertising channel, and professionalism has significantly increased. Besides many good Google Ads agencies, there are also many companies with good in-house expertise. This makes it increasingly difficult to gain an edge, ultimately affecting overall conversion rates. Nevertheless, there are still individual industries and search niches today where there is little professional competition, making acquisition relatively easy. Therefore, it is important to be strategically creative in Google Ads advertising and discover and exploit untapped niches.
More Click Fraud
With the boom of Google Ads, click fraud has also increased, presenting another challenge for advertisers. According to a study by ClickCease, only 72% of clicks on ads are actually from genuinely interested users. The remaining 28% of clicks consist of 24% competitors and 4% bots. This fraudulent traffic can drive up costs and significantly impair campaign efficiency.
Over the years, Google Ads traffic has suffered in quality due to click fraud. Without the use of external tools to analyze and combat click fraud, there is an increased risk of budget wastage and a drop in actual conversion rates. Tools like ClickCease, Clickpatrol, or Lunio can help identify and block suspicious activities, significantly improving campaign effectiveness.
The Climate Is Getting Tougher
With increasing competition, the climate on Google Ads has become tougher. It is now common for many companies to bid on their competitors’ brand names in an attempt to divert business. Even when searching for your own brand name, you often have to spend a lot to be the top result.
Poorer Customer Service
In 2008, Google Ads support was excellent: competent, experienced, and always aiming to provide real value to customers. Collaboration was enjoyable, and it was a genuine win-win situation.
Nowadays, however, we have the impression that things have changed for the worse. Customer service is often outsourced to external companies whose employees do not always have the necessary experience and marketing sensibility. Additionally, it often feels like the main goal is to motivate customers to spend more on Google Ads. This is particularly disappointing considering how much money flows into Google Ads. This behavior seems possible only because Google holds such a dominant market position.
Many Agencies Follow Google’s Instructions
To obtain the “Google Ads Partner Logo,” agencies must achieve a certain average “optimization score” in the Google Ads accounts they manage. This score can be positively influenced by following Google’s automatic optimization suggestions. However, these suggestions may not always fit the specific advertising strategy and could even worsen the account’s performance. There is a risk that some agencies act in Google’s interest rather than their clients’ to retain the badge. Therefore, it is important to work with independent agencies that provide honest and transparent advice.
Conclusion
Google Ads remains an efficient tool for digital advertising but faces significant challenges. Increasing competition, higher click prices, and lower conversion rates make using Google Ads increasingly costly and complex. Simultaneously, opaque algorithms, reduced control, and increasing click fraud impair campaign efficiency.
The market’s professionalization requires advertisers to have deep expertise and strategic creativity to succeed in a competitive environment. Despite these difficulties, there are still niches and industries where Google Ads can be effective, especially when advertisers use innovative and specialized approaches.
In the coming years, the search market will fundamentally change with the use of artificial intelligence. Google’s market power and dominance could significantly decrease as a result. This development is likely to lead to healthier competition and improved advertising opportunities. Advertisers must continuously evaluate whether Google Ads remains the best option for their marketing goals or if alternative platforms and strategies are more promising.
