The Impact of (and Solution to) Rising Digital Advertising Costs

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As the internet becomes more saturated with new online businesses, digital advertising has become very expensive for small businesses trying to compete in competitive markets.

Take a look at AdWords, the #1 digital marketing platform. These days, we consider it inexpensive if you can maintain an average cost-per-click (CPC) under $2. I work with some industries that require paying over $10 per click, even with excellent quality scores!

Image Source: WordStream

This has happened naturally as the ad platform has aged. AdWords has been around for a long time now. Consequently, it has become a highly competitive bid market.

For some of us, this is completely unsustainable for our business growth. We may have margins that don’t accommodate high acquisition costs. It may be impossible for us to profit on any average CPC over $0.25.

This is how concepts like “growth hacking” and more comprehensive approaches like “inbound marketing” have gained in popularity.

It’s also why companies rely so much on robust email strategies, like drip campaigns. Sending emails to customers generally costs as much as simply paying for the email campaign platform (like MailChimp). You’re not paying per email opened or anything to the equivalent of AdWords or social advertising cost-per-click models.

Typically, when a new company comes to us for help, we’ll quickly identify their online advertising costs and assess whether it is even worth bidding on search or social advertising platforms. If it seems like a stretch, we review several strategies that help keep initial acquisition costs as low as possible.

So, what does a small business do if they struggle to get traffic to their website?

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We generally suggest trying the following strategies:

  1. Look for opportunities to gain exposure through online blogs and industry influencers.
  2. Collect qualified lead emails with a high-incentive, low-cost ad campaign.
  3. Find opportunities to bid on AdWords with your lowest possible CPCs.
  4. If you have an e-commerce business, set up Google Shopping and keep bids LOW.
  5. Try to find an affordable way to advertise on Facebook based on your business goals.
  6. Reach your audience on Reddit (100% free)

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About the author

Kate likes math and problem solving. Honestly, they get her through the day. She loves her wife, cats, and living in a cozy house outside Chattanooga, Tennessee.

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