How to Identify When You Are Wasting Your Adwords Budgets
Some advertisers may attribute poor campaign performance to bad luck. But most often it is the result of attracting irrelevant clicks and delivering poor user experiences that are limiting campaign success. In this post, we look at how you may be wasting your budget and 6 tactics for minimising budget wastage and maximising profitability.
Let’s kick off with an example. Say your goal is to increase your weekly ROI from $1000 to $ 1500 in the shortest time period. You are faced with two decisions:
These two scenarios can be tabulated as follows:
Scenario 1: Increase your spend (The easy, stupid way)
In this scenario, we are increasing our budget by an additional 500 dollars to drive more traffic. At the current conversion rate, this delivers an additional 1000 dollars in revenue, resulting in a profit of 1500 and our ROI remains the same at 100%.
Scenario 2: Optimise your spend (The clever way)
In this scenario, we do not change our 1000 budget. Instead we focus our efforts on optimising the current campaign to produce a higher conversion rate. This results in a 20% increase in revenue, providing a profit of 1500 and a 150% ROI (50% more than before).
As you can see, with a bit of effort, scenario 2 is the producing the same amount of profit, but with a better ROI than scenario 1, as the budget remains unchanged.
Optimising your spend can be as simple as determining how you are wasting your budget and modifying your campaign structure, ads and landing pages to attract better clicks and deliver better experiences for searchers.
Ultimately, if you are not converting visitors, you are wasting your budget. This comes as a result of either attracting irrelevant clicks and / or providing a poor user experience.
1. Attracting Irrelevant Clicks
This typically happens when:
2. Offering a Poor User Experience
This typically happens when:
1. Setup conversion tracking
Having conversion tracking is essential for knowing which of your keywords, ads and landing pages is revenue generating. To get this setup, follow the instructions at the Adwords help centre. Ensure that you name your conversions quite specifically to avoid confusion down the line.
2. Optimise Broad Match
If you are determined to use broad match, be mindful that Google can show your ad any time part of your phrase is used in a search query. For instance, the ads you have setup for the keyword ‘Lady’s Clothes’ may show for the search query ‘Men’s Clothes’ – attracting irrelevant clicks and reducing your CTR. Therefore, it’s recommended to get the most from broad match to include (1) negative keywords and (2) a broad match modifier (+Keyword).
Otherwise, stick with the safer phrase or exact match types.
If you don’t understand match types, read about them here.
3. Actively Seek Out Negative Keywords
Statistics show that 25% of advertisers do not use negative keywords, which is odd as negative keywords are one of the simplest and most effective ways to reduce budget wastage. To include negative keywords:
1.) Review the search query report (under campaigns / keywords / details)
2.) Identify irrelevant keywords.
3.) Click add as a negative keyword.
4.) Select either the ad group or campaign level
5.) Edit the negative keyword
6.) Hit save.
Repeat this process at least once per week. For new accounts repeat this daily for the first month.
4. Revise your campaign settings
Go to your Adwords account, select a campaign, click the settings tab and review the following:
5. Optimise your Ad Groups & Bid Strategy
6. Landing Pages
In this post we have outlined the two main causes of budget wastage – namely irrelevant clicks and poor user experiences – and provided you with 6 tips to optimise your Google Adwords campaigns for increased profits and a higher % ROI. Consider implementing all of these tactics, before increasing your budget.
By Anthony Coe
Image Credit: By 401(K) 2012 under Attribution-ShareAlike 2.0 Generic Licence.