Why Google Ads may not solve sales issues in your tour business – and the options you have – Digital Tourism Show #219
Chris discusses some preconceptions about Google Ads and at what stage it is right for your business… if at all.
Google Ads is a great tool when used correctly. As a marketing channel, I have seen outstanding results from Google Ads that have transformed businesses for the better, but it’s important to recognise that most of these businesses realised how important it was to invest time and money in order to receive a true return on investment.
Macs Adventure — A Google Ads success story
A while back, I interviewed Neil Lapping of Macs Adventure, who grew his business from behind an Ikea desk in his bedroom into a multi-million-pound business with his main marketing efforts focused around Google Ads. Of course, they also offer a great product and work extremely hard on their reputation, but their sales can be attributed to investing heavily in Google Ads.
Neil invested in Google Ads because it allows him to capture his customer at the exact moment they are searching for his product — the exact moment they are ready to buy.
Google Ads on a budget?
Before I continue, yes, I’d like to acknowledge that you can definitely grow your revenue via Google Ads on a modest budget, but this really does depend on your destination and how competitive it is – i.e. how many of your competitors are bidding for the same search terms. Every year, Google Ads is getting more and more expensive and, as the head of a digital marketing agency, there’s no point pretending this isn’t the case.
For example, San Francisco is a highly competitive destination for Google Ads and you would waste your time spending anything less than £50 per day. Even £100 is now not uncommon. In effect, if you are willing to invest money into Google Ads to outbid your competitors then you should dominate that market. If you spend half of what your competitors spend, you should expect less of a return and you should recognise that your competitors will always have priority over you. If you spend a similar amount to your competitors, they will have similar opportunities to you.
In San Francisco, the search term ‘Alcatraz tour’ is, on average, £1.22 per click (CPC) at its lowest level, according to Google. For your ad to receive only 1000 clicks in a month you would need to spend around £1,200 per month (£53 per day) and this will only give you an average position on Google’s search engine results page (SERP) of 1.5.
Say your average booking rate from ads is 3.55% (40 people per month) — which is the average conversion rate, according to Google — and your tour has a capacity of 50 people per day (1,500 people per month), you would need to spend approx. £51,500 per month to fill your entire capacity for the month using Google’s ad platform (see calculations below) – and this is also while your competitors are also bidding, driving up the CPC! There are ways you can push the CPC down but hopefully you get my point.
Watch a video of our Google Ad Calculator to see the above figures in action:
When Google Adwords is not right for you
When tour operators approach us, they normally want to jump on Google Ads because they feel it will fix an issue they currently have in their business, such as:
- Sales being lower than expected
- Too many empty spaces on their tours
- Cash flow issues
- Organic marketing has been ineffective
- All of the above
It is usually a reaction to something negative, or broken, in their business and after reading a few articles or promises made by some marketing agencies (see my last blog post on this subject), they expect it to fix every issue and fix them as soon as their ads are switched on. Although through no fault of their own, it is the wrong way to look at paid advertising. It just comes down to education and wading through the misinformation.
When done right, it should take many weeks before you spend a penny on Google Ads. Why? Because you need a strategy in place first. This strategy may include the following:
- Keyword research – Knowing which keywords and phrases will be the most effective
- Target audience – Researching the best audience to target
- Have specific goals – Each campaign needs a specific goal, so it’s important to take the time to define these goals
- Optimise your landing page – Using information from the three points above, use these to re-write and optimise your landing pages so they are in line with your ads. This helps raise your Google Ads quality score and lower your cost per click
After this, there is a test-and-measure stage. Using small amounts of your budget to get a sense of how effective your campaigns will be prior to increasing the budget. All this takes time and in not taking this time to implement correctly, your campaign is almost guaranteed to fail. My intention is not to be negative, but to offer the kind of realistic, honest advice I feel is often missing online.
So, as the title suggests, if your tour business is struggling to make sales and you need to increase revenue quickly because your business is in dire straights, don’t even think about this platform. You will just lose your money that little bit quicker. As with everything, some of you may get lucky and generate huge sums from quickly implementing Google Ads but this is not typical and you shouldn’t believe any advice (or sales conversation) that sells PPC as the heal-all for your online business.
So, if not Google Ads then what should you do?
Well, there is only one option I would recommend to most businesses: consolidate your business, working on what you can do now and build for the future. That may mean making some hard decisions, spending time creating content with smaller, more reasonable goals. Pacing and managing expectations is an important part of online marketing.
By taking stock and creating a content marketing strategy that can be implemented now, with an aim at making your next high season a success, you will find your efforts are more effective and that your marketing budget is better spent than if you were to simply throw all of your time and budget into Google Ads. You may also find that by the time your next season hits, you can spend less on Google Ads because you have built strong, organic brand awareness.
Whatever you decide, please make sure you are doing it for all the right reasons. Don’t waste more money on knee-jerk reactions or bad promises from agencies or self proclaimed ‘gurus’.
Need more free advice?
Chris and his team will send you a weekly email offering high-value insight and advice about a variety of marketing and business development topics related to the tourism industry. We address specific destinations, tours and activities, and the hotel industry. We also provide important travel industry news and updates.