Has Google AdWords Stopped Working for Small Businesses?

Photo by Tami Chappell Tom Telford: “It finally hit me to ask, ‘Can I sustain this?'”

In 2010, Tom Telford's management company, Cedar Creek Cabin Rentals, was spending $140,000 a year on pay-per-click advertising to promote the 45 cabins in his charge in and around the mountains of Helen, Ga.

But pay-per-click advertising had become increasingly popular and competitive and that meant his costs had increased as well. In fact, to maintain his ranking in search results, he had to pay about $1.25 a click, about double what he paid initially. “The cost per keyword climbed dramatically over the years,” Mr. Telford said. “And it's still going.”

While Mr. Te lford raised the limit on how much he was willing to pay for his keywords, he says he didn't see a commensurate increase in sales. “For a while, I was spending more than I was getting,” he said. “It finally hit me to ask, ‘Can I sustain this?'”

As Darren Dahl explains in an article we've just published, it's a question more and more small-business owners have been asking. What has been your experience?