[fairity]

Surprised to see this upvoted because the takeaway is completely incorrect, and based on the anecdotal evidence of one advertiser.

As someone who spends seven figures every month on Google ads, what’s much more likely to be happening here is that the individual advertiser is either getting outcompeted or they’re executing ads poorly.

Google ads revenue in the US continues to grow every quarter. And, since advertisers will generally invest in ads until the last dollar is break even, it’s likely that the total value advertisers unlock through Google ads is growing as well. Whether that’s true or not, the notion that value generated for advertisers is “dead” is absurd.

[levocardia]

Your experience is 100% compatible with the linked article: the seven-figure spender is presumably running a much higher margin business and can scale narrowly profitable ads much more effectively. The natural equilibrium for a perfect ad market is for the ad spend to be exactly equal to increase in revenue: a perfectly efficient market with no profit for the advertiser. Google (and Meta et al) are so good that for many SMBs they are completely cornered at the zero-point: spend as much as you can just to stay in the same place financially.

[ninthcat]

> The natural equilibrium for a perfect ad market is for the ad spend to be exactly equal to increase in revenue

Not quite, the equilibrium is when marginal ad spend results in no change to profit. The ad spend at equilibrium should result in increased profit compared to no ad spend.

[sgustard]

I just Googled "kids magic show in Durban" and his ad showed up in the top slot (sorry if this post has swamped your ad bill); and as a bonus, the Gemini AI blurb also touted him: "For kids' magic shows in Durban, look for local entertainers like Big Top Entertainment..."

Doesn't seem like the issue is he's being outbid by international conglomerates with million dollar budgets. Maybe the kids magic show market has cooled in South Africa? Or users have left Google? Curious what we are to conclude here.

[wouldbecouldbe]

Google ads are very time & location dependent, the fact that it's showing to you might be a bad sign since you are most likely not close to Durban and this seems like an ad you only want to run locally.

[tomjuggler]

There is no ad - that's organic. Money ran out day before yesterday

[hermitcrab]

I run a small software business and I know various other people who run small software businesses. We are all pretty much agreed that that Google Ads have been less and less profitable, year or year. Most of us have now given up on PPC ads.

[theshackleford]

And equally I know many people running non software businesses whose experience is the complete opposite of yours and Google ads has and continues to drive the majority of their revenue.

I expected them to start seeing a hit or significant decline by now, and even told them as such but in what I honestly find surprising, it’s not come to pass.

[aucisson_masque]

Agree, ran a business for years and I’ve seen the slow but steady decline of Google ads.

Ultimately I relied more on returning customer and mouth to mouth recommendations, kept lowering the Google ads budget.

[qingcharles]

I've run Google PPC on-and-off for 20+ years. It's definitely way harder to make money with them now, and the complexity is now through the roof, which makes it way harder for a novice to optimize their campaign. I steer small businesses away because it's too easy to screw up and lose your shirt on PPC without professional help.

[mchaver]

As a small software business, do you have other approaches to ads?

[akoboldfrying]

He's been using AdWords for 10 years, so I wouldn't assume incompetence there.

It's just as likely that people are simply spending less on entertainment due to high cost of living.

[JKCalhoun]

> and based on the anecdotal evidence of one advertiser

The author admits as much.

[crazygringo]

The question is, why has this post been massively upvoted?

It contains zero useful information. Just somebody struggling with AdWords and they don't know why. Not helpful.

I have to assume the vast majority of upvotes are based on the title alone, assuming it's about Search? A large proportion of top level comments are about Search too. Depressing.

[busyant]

> seven figures every month on Google ads

What are you advertising?

[Culonavirus]

Basically any online shop with decent volume / revenue is going to be spending 100s of thousands if not millions of dollars a month on Google ads. (Not just Google Ads, also Facebook ads etc.)

It used to be possible to get by with "organic" search traffic and some SEO... but google search looked completely different back then. Now when you look for something it's an AI box, products (google merchant) ad box, ad (promoted results) box, ... then there's a couple of (like two) results that are "organic" (whatever that means these days) and that's it. And we all know that when you want to hide something, you put it on the second page of google search results. So the space for doing online business "ad free" has been squeezed out over time.

And the K shaped economy is totally true in this ecomm space. These days say 15% of your revenue gets eaten by ads, but you also have say 50% higher revenue overall. At some point it becomes a margin game and the bigger players will start squeezing out the smaller ones because the biggers ones can operate on tighter margins (making up the difference with volume) which the smaller ones simply can't afford. The difference in operating costs of an eshop that sells 10000 items a month is not that different than that of an eshop selling 100000 items a month (i.e. not 10x, more like 2-3x). But selling 10x items gives you the volume you need to be able to lower your margins and put the difference into ads.

BTW all of this is handled by professional online marketing people with increasingly widespread use of AI so there's no room for the small players to make it big while not being optimized to the gills. This is why most small advertisers are seeing small or negative returns while Google and Meta are making tens if not hundreds of billions in ad revenue... The ads work, but the amounts you need to spend and the optimization level you need to have is in a completely different galaxy than it was 10 years ago.

[doyouevensunbro]

Either Claude or OpenAI, going by all the ads I see.

[lelanthran]

> As someone who spends seven figures every month on Google ads, what’s much more likely to be happening here is that the individual advertiser is either getting outcompeted or they’re executing ads poorly.

Outcompeted by who??? He's a performer offering local entertainment. I highly doubt that people searching for "entertainer in durban" are getting ads for Cirque du Soleile.

His ad is probably on the first page for that search term; the problem is more likely that no one is looking at that first page anymore.

[0xbadcafebee]

> Surprised to see this upvoted because the takeaway is completely incorrect

It's the standard actually. Hot takes get more votes and hot takes are usually wrong. Experts have non-controversial opinions, which are boring (so no impulse to upvote), and there are 1000x more non-experts with blogs. Add to that HN culture which values contrarian-ness. So HN front page blog posts are almost entirely incorrect, but spicy