Are You Paying Google for Customers Who Were Already Looking for You?
Google Ads can be a great way to get your business in front of new customers and show up ahead of competitors.
But when we look at a Google Ads account of a potential new client, one of the first things we want to know is: Are these ads actually bringing in new customers, or are you paying for people who were already looking for you?
At Magnetic North, we want to make sure your ad budget is actually doing something useful. That means not spending money on clicks from people who already know your business by name and were probably going to visit your website anyway.
We’ve audited plenty of Google Ads accounts that seem great at first glance. The click-through rate is high, conversions look strong and the cost per conversion is low.
Then we dig a little deeper and realize a big chunk of those clicks are coming from people searching the company’s name.
The campaign might look successful, but in reality, Google Ads could just be taking credit for traffic the business likely would have gotten for free.
The Pizza Shop Salesman
A while back, I was at a conference where one of the speakers, Rand Fishkin, shared a story about a pizza shop owner.
The owner hired three salesmen to hand out coupons around town. Each salesman had a different colored coupon so the owner could track how many customers each person brought into the restaurant. After a while, one salesman was outperforming everyone else by a huge margin. Nearly every coupon being redeemed belonged to him.
Naturally, the restaurant owner thought he had found an incredible salesman. But when he looked at revenue at the end of the year, it hadn’t increased like he expected. In fact, it had gone down. He eventually figured out why.
His “best” salesman had been standing a few feet outside the pizza shop and handing coupons to people who were already walking towards the door.
He wasn’t creating new customers. He was just taking credit for customers who were already coming.
Your Google Ads Campaign Can Do the Same Thing
This is exactly what can happen with branded Google Ads. Someone searches your company name. They already know who you are, they are actively looking for you, and your organic website may already be the first result.
But if you’re running an ad on your own company name, that person may click the ad instead. You pay Google for the click, Google Ads records a conversion, and the campaign gets credit for bringing in a customer. However, that customer may have found you anyway.
That doesn’t mean branded campaigns are always bad. It means they need to have a strategic reason for existing.
We Want Google Ads to Find People Who Don’t Know You Yet
For many of our clients, we add their brand name as a negative keyword in non-branded campaigns.
Why?
Because we’d rather use that budget to reach someone searching for the product, service or solution our client offers who doesn’t already know which company they want to work with.
Those are the searches where Google Ads can create additional demand instead of simply capturing demand that already exists.
For example, there is a big difference between someone searching “Magnetic North marketing agency” and someone searching “digital marketing agency in Minneapolis”
The first person already knows where they’re going, and the second person is still deciding. This is the person we want to compete for.
When Does a Branded Google Ads Campaign Make Sense?
There are situations where bidding on your own name is absolutely worthwhile.
One of our clients runs a branded campaign because competitors were bidding on their company name. When someone searched for our client, competing companies could appear above their organic listing.
We didn’t want competitors intercepting people who were specifically looking for our client. So, we created a separate branded campaign with a very small daily budget. Its job isn’t to generate awareness, rather to play defense.
A branded campaign should be something you’re running because there is a strategic reason to run it, not because it makes your Google Ads dashboard look better.
Look Beyond the Conversion Rate
A high conversion rate, high click-through rate, or low cost per lead doesn’t automatically mean a Google Ads campaign is working well.
You have to understand where those conversions are coming from and whether your advertising actually influenced them.
When we review Google Ads accounts, we’re not interested in making the numbers look impressive. We want to know whether the money being spent is helping the business reach people it wouldn’t have reached otherwise.
Because we’d rather help you bring a new customer through the door than charge you for handing a coupon to someone who was already walking in.
Wondering what your Google Ads budget is actually paying for? Talk to Magnetic North about your current campaigns, we’ll help you take a closer look.
digital marketing specialist
ABOUT THE AUTHOR
Lauren Rausch
Since joining Magnetic North, Lauren has immersed herself in the evolving world of AI and shifting consumer search behaviors. She helps develop smart, forward-thinking content strategies that position Magnetic North and our clients ahead of the competition in AI-driven search. Adaptable and always ready for a new challenge, she brings a positive, solutions-focused approach to every project. Lauren enjoys meeting new people and loves the variety each client brings. With a strong foundation in digital marketing and data analysis, she thrives on turning metrics into meaningful insights and recommendations. Collaborative and optimistic, Lauren is a team player who excels in creative, fast-paced environments and brings ideas to life through impactful, visually engaging content.