What Pagos Learned Spending Money on Google AdWords That Didn’t Work

On paper, Pagos was the perfect Google AdWords customer. Narrow, specialized niche. High buyer intent queries. Minimal competition. Every marketing textbook would say: this is exactly when paid search works.

It didn’t work.

“We had an idea of what were doing is relatively narrow space. So actually buying Google AdWords would work really well because few people would look for it. But the ones who did would actually have a high intent,” Klas Bäck recalls.

In a recent episode of Category Visionaries, Klas Bäck, CEO and Co-Founder of Pagos, a payments operations platform that’s raised $44 million in funding, explained how even ideal conditions weren’t enough—and what that reveals about marketing in 2024.

The Theory Behind the Bet

The logic seemed bulletproof. Pagos built a payments operations platform for enterprise companies. Someone searching for “payments data analytics” likely had the problem Pagos solved. With minimal competition, cost-per-click should be reasonable. With high intent, conversion should be strong.

This is marketing 101. Find keywords where intent matches your solution. Target them. Convert the traffic. Scale what works.

Except “that actually didn’t really worked out. Even with expert help, it was pretty complicated to manage and really see, like if we spend $1, do we get anything back? I guess Google doesn’t really care about smaller customer that way.”

The failure wasn’t execution. Pagos hired specialists. The fundamental assumption—that paid search works when conditions are favorable—didn’t hold in their market.

The Broader Breakdown of Traditional Channels

The Google AdWords failure fit a broader pattern. “There is so much more noise out there in the last couple of years than there ever has been,” Klas observes. “So no matter what you do, nothing is as easy.”

Every traditional demand generation channel has deteriorated simultaneously. Cold email inboxes overflow with AI-generated outreach. LinkedIn messages flood with automation. Conference sponsorships compete with dozens of vendors.

Even PR collapsed. “There are less journalists around. So they don’t write about small companies, they don’t write about big companies.”

When every channel deteriorates at once, it’s not a channel problem. It’s a fundamental shift in how buyers discover solutions.

The Attribution Problem

Part of what made Google AdWords frustrating was attribution. Enterprise sales cycles are long. A prospect might see an ad, visit, leave, return weeks later through a different channel, then convert months after that initial touchpoint.

Traditional attribution breaks down. Did the AdWords click contribute? Maybe. Or maybe the prospect would have found Pagos anyway. When you can’t clearly see if spending $1 returns anything, you can’t optimize.

This gets worse in narrow niches. With small volumes, even minor attribution errors create massive uncertainty.

The Discipline to Stop

Here’s what separates good marketers from great ones: knowing when to quit. Most founders keep trying to make channels work. They iterate on copy. They adjust targeting. They test landing pages. They convince themselves one more tweak will fix it.

Klas and his team did the opposite. They recognized quickly that the math wasn’t working and moved on.

The opportunity cost matters more than sunk cost. Continuing to spend on a channel that doesn’t work costs far more than walking away.

What Worked Instead

When traditional channels failed, Pagos returned to first principles. What creates value for target buyers? Not ads or cold emails. Genuine peer connections.

“We have hosted quite a few dinners in different locations around the US,” Klas explains. “Come and have a good time. But it’s not really about meeting us. It’s actually meeting your peers and talking to them is actually valuable for another professional contact that you can draw for the future.”

This inverts the typical vendor relationship. Instead of interrupting buyers, Pagos creates spaces where buyers want to be. “We try to be a node of the people that are working with us or are thinking about working with us.”

A dinner for twelve costs a fraction of Google AdWords spend. But the quality of connection—and likelihood of conversion—is orders of magnitude higher.

The Framework for Abandoning Channels Faster

The Pagos experience reveals a framework:

Set clear success metrics before you start—actual business impact, not vanity metrics. Give it a defined test period with sufficient budget. If you can’t clearly see ROI after that period, stop.

The key is “clearly see ROI.” Not “we think it might be working” or “attribution is complicated.” If you can’t draw a clear line from dollars spent to dollars returned, you don’t have a working channel.

“Even with expert help, it was pretty complicated to manage and really see, like if we spend $1, do we get anything back?”

That uncertainty is itself the signal. Working channels have clear ROI. When the math is murky despite reasonable volume and time, the channel doesn’t work.

Why This Matters More Now

Traditional playbooks are breaking everywhere, not just in payments. AI-powered content floods have made every traditional channel less effective. What worked five years ago doesn’t work today.

This creates two paths. Keep trying to make traditional channels work, fighting over declining effectiveness. Or recognize faster when traditional approaches don’t apply and pivot to alternatives.

Companies that win will have the discipline to abandon what should work when it doesn’t, and the creativity to find what actually works.

The Experiment Mandate

You need to try multiple things. “We try a lot of things and then, okay, over time, what’s working and then we’re trying to focus on that,” Klas explains.

Most companies don’t actually do this. They pick one channel and optimize it to death even when it’s not working. Real experimentation means trying multiple approaches, measuring honestly, and directing resources to what produces results.

The AdWords failure freed up budget for dinners and community building—approaches that actually worked.

The Permission to Quit

The most valuable lesson from Pagos’s AdWords experience isn’t tactical. It’s permission to quit when something doesn’t work, even when theory says it should.

You’re allowed to abandon channels that every expert says you should use. You’re allowed to stop optimizing when the math doesn’t work. You’re allowed to ignore best practices when they don’t produce results for your specific business.

When Google AdWords doesn’t work despite perfect conditions, the problem isn’t you. It’s that the traditional playbook doesn’t apply to your market. The discipline to recognize this quickly and move on separates companies that find efficient growth from those that waste resources optimizing broken channels.

Sometimes the best marketing decision is knowing what not to do.