Should You use Adwords
Often we are asked, should I use Adwords?
The answer depends on your business model and cash flow. A successful local business model may fail when applied nationally. With AdWords, advertisers are willing to break even or lose money on the initial investment because the Internet users are looking for their products.
If your company is conservative with your cash flow, you maybe losing money with Adwords. Advertisers must have the cash to go negative on their ad spending while customer life time value catches up. It could take over a period of 6-12 months to recoup the initial investment. Bidding wars for the number one position can drive prices to unreasonable levels. Pay what you can afford based on your cash flow and margins.
If your company has a successful business model, strong cash flow and have success in advertising, use Adwords. As your campaigns improve, the prices will go down. Adwords rewards you with lower clicks if your ads are relevant. The objective of Adwords is to give the user a good positive experience by showing relevant ads. Furthermore, you know what you can afford in your decision whether to use Adwords or not.
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