Unpopular opinion: I think higher ad bids actually hurt small businesses more than they help

I was reading through a report from WordStream last night about average CPC costs by industry, and I saw something that kind of blew my mind. For home improvement, the average CPC is like $6.50 now? I remember when it was closer to $3 just a couple years ago. On one hand, you gotta bid high to even show up in the top spots these days, especially in competitive markets like mine here in Phoenix. But on the other hand, I've had clients who throw $50 a day at a campaign and get maybe one or two conversions because their budget gets eaten up by high bids and they never get enough data. So which is it? Are we all just chasing position and losing money, or is the high bid the only way to survive without getting buried on page 2? Has anyone else seen a weird tipping point where raising your bid actually killed your ROAS?

2 comments

2 Comments

reesea491mo ago

Isn't it possible that the problem isn't the high bid itself but how you're targeting your audience? If you're burning through budget without conversions, your keywords or landing page might be the real issue, not just the dollar amount. A high bid can work great if you've dialed in your audience first, otherwise you're just paying for clicks that don't matter.

the_adam1mo ago

Funny you mention that, reminds me of this time I was helping my buddy tune up his old Mustang. He spent a fortune on a high performance carburetor thinking it would solve all his problems. Car still ran like crap. Turns out he had a vacuum leak the whole time that was messing up the air fuel mixture. All that money on the carb didn't do a thing until he fixed the actual problem. Kinda the same deal with ad bids. You can throw money at the highest bid but if your targeting or your landing page is off, you're just burning cash on something that's fundamentally broken. Sometimes you gotta step back and check the basics before blaming the price tag.