I use no-nonsense and established methodologies that I have tested for YEARS to improve the bottom line of my clients
Last year (2018), Google ad spend accounted for 30% of all net ad revenue across the world—that’s $51 billion! While most of that money probably went toward driving leads, generating conversions, and boosting businesses, a good chunk of it was unfortunately wasted – yep, budget leakage!
On Google Ads, brands mostly pay for clicks. So if your ads are set up with the lowest possible bids and the most relevant keywords, and if they attract interested customers who click and make a purchase, then great! No need to make any campaign adjustments.
However, if any one of those metrics is off (including a number of others), then your budget will start to go down the drain. Research shows that small businesses waste 25% or more of their total paid search spend on irrelevant clicks.
The good news: if your budget is leaking, you can fix it!
Here are 20 changes you can make right now to make the most of your ad dollars.
When you go to check your keywords’ performance, you might notice that a few of them aren’t pulling their weight. Maybe no one’s searching for them, or they cost too much to convert, or they’re just not generating any clicks.
Here’s what you need to know.
Identify weak keywords by setting up conversion tracking tags. These allow you to trace purchases, calls, app downloads, and email signups that come directly from your target keywords. Say you want to see how many people click on your ad and then buy products from your website. All you have to do is place a snippet of code (provided by Google) on your checkout page or purchase confirmation page.
If keywords aren’t driving sales (conversions), it’s probably because they aren’t relevant enough to your customers’ interests. For instance, your keywords might be too general. Say you’re selling men’s dress shoes, but you use keywords like “dress shoes.” Women might end up clicking on your ad and going to your site and then leaving because they realize your products aren’t what they’re looking for.
It’s best to pause or simply remove these keywords.
In most cases, keywords with a high CPA are considered to be another cause for budget leakage. While these keywords might be converting, they’re not yielding positive ROI, and are therefore categorized as terms with a high CPA. You must make sure your CPA at the keyword level is less than your client’s LTV (lifetime value). If the CPA is slightly more or less than the LTV, the keyword is causing budget leakage.
Platforms like Google Keyword Planner, SEMrush, and Ahrefs, can help you identify the keywords your audiences are searching for, the keywords your competitors are buying, the search volume of those keywords, etc. For example, here’s a look at the SEMrush results for “dress shoes.” It shows organic and paid search volume, average CPC, and related keywords.
By using these keyword research services, you can stop burning your budget on weak keywords and set up your campaign for success.
It’s a known strategy to start broad. The first few weeks or even months, you essentially investing your money to purchase data and that considered part of your keyword research. The incoming data (users’ search terms) will help you finalize your core terms and even develop a better long-tail list. You can either use board match or use my favorite board match modifier (add the + sign to each word) with extensive negative keyword list to help prevent budget leakage.
When you have your final list of terms, test them in all match types in ad each ad group: phrase, exact, and broad match. You will find that some keywords performed better in a certain match type, and unless you tested it, you would never know. At that point you tested board, phrase, and extract, and you have the best possible match type for each term you target.
Once you select your keywords, Google will match them to users’ queries based on designated match types and you use the match type for each keyword with the highest return.
Constantly testing strategies and adjusting them is necessary in the world of PPC. If you stand still, you’ll be left behind to realize later that a large portion of your account is under-performing, and you’ll come to the conclusion that PPC doesn’t work for your business – which happens for many.
The long-tail strategy is widely used to control PPC cost better. For high CPC niches, just targeting long-tail terms is sometimes not enough, especially in competitive markets where CPC rises continuously.
We used to construct accounts with 75% core keywords, 25% long-tail, and slowly adjusting from there. This is less likely to work today as a template specifically for high CPC niches again, due to the high competition and cost per click. Instead, invest in deep keyword research and including a mind mapping tool to find as many long-tail terms as you can and use these as the primary driver of traffic. Long-tail now should be at least 75% of your target terms.
From testing over $1.2 million of spending, terms to yield the best return follow the following formula:
75% long-tail keyword tested both for phrase and exact AND 25% core terms in phrase match AND an extensive list of negative keywords.
For all long-tail terms = Word count = > 4 AND volume > 10 AND 0.01 < CPC < Avg. CPC/3 AND Keyword Difficulty (KD) < 50
75% long-tail keyword – instead of only a few log-tail terms, we are now capitalizing on this and making it as our primary strategy. It also means that finding the right keywords will take you more than even a deep keyword research. This could be a long process and an ongoing task. Never allow your long-tail list to be smaller than 75% of your total account keyword count.
25% core terms – Core terms are now the small group of keywords, and those will be watched closely for high spend and high CPA (cost per acquisition). Use core terms for testing, for discovering new long-tail terms, and keep the ones that actually convert at acceptable CPA.
Negative keywords – as many negative keywords as possible. You can find online lists of negative keywords ready to plugin. There is never too much and the more the batter.
Word count => 4 – the number of words in your term. Four or higher but we specifically like five and never higher than eight.
Volume > 10 – the number of searches available. Take anything above 10. This merely an indicator if your keyword has search volume or not. Lower than 10 usually comes back as 0 or n/a which means, no real value.
0.01 < CPC < Avg. CPC/3 – Cost per click should be greater than zero or else indicating there is not enough data to support this is a term with commercial value. While it could be a newly emerging term, we want to make data driven decision and leave everything else you still think worth testing for later in a separate ad testing.
Keyword Difficulty (KD) < 50 (Ahrefs) – while we usually use this metric for organic keyword research, keyword difficulty can also help us in understanding competition level. We will keep the terms with DK smaller than 50.
It might be tempting to plug as many keywords as possible into your campaign. However, you’ll most likely end up paying for clicks from people who aren’t really interested in buying. That’s why it’s important to use keywords only for branded and commercial intent searches.
To provide some context, let’s break down searches into three different categories:
Remember: You’re paying for clicks, so you want people who are past the research stage and are serious about purchasing. Sure, informational searches might help people get acquainted with your brand, but it’s best to leave those to your organic blog listings.
To avoid paying for informational searches, try eliminating these types of terms from your keywords:
By doing this, you can help ensure that if someone clicks on your ad, they will most likely make it to the checkout page.
Google will still show your ads for keywords containing misspelled negative terms. This means that you need to enter the typos and misspellings yourself to be sure they’re excluded. This may sound daunting, but it can definitely save your budget. Tools like Keyword Typo Generator can also help speed up the process.
Automatic bidding is the default option on Google Ads. With automatic bidding, Google chooses your bids for you to “help you get as many clicks as possible within your budget.” This can be especially convenient for advertisers with a smaller budget, are just getting started on Google Ads, or who don’t have the time and resources to monitor their bids on a regular basis.
Still, it’s important to remember that Google is a business, and it wants to make money from your ads. That’s not to say Google is the “bad guy,” but it doesn’t operate solely with your interests in mind. Like you, it wants to generate revenue. So while you may start out with automatic bidding, you’ll do your budget a favor by experimenting with manual bidding and taking this process into your own hands.
With manual bidding, you can choose the maximum cost-per-click (CPC) that you’re willing to pay for each keyword. For example, if your daily budget is $100 and you want 200 clicks per day, you can set your CPC to $0.50. However, your budget isn’t the only factor affecting your CPC. Keyword competition, the search volume at different times and days, the preferred ads position, and conversions all play a part. Google Ads can’t always adjust to these criteria automatically or anticipate your specific strategies. So, if you have the time and ability to manually adjust your bids according to these criteria, you can help make the most of your ad dollars.
Even if you use relevant commercial keywords, you might still struggle to see a return on investment (ROI). A reason for this could be that your competitors are monopolizing the space. Maybe their landing pages load faster or their ad copy better matches what they have to offer, providing a more intuitive customer experience and leaving your brand (and budget) by the wayside.
Not to worry. You can easily check up on your competitors’ strategies by simply searching for keywords using services like iSpionage and SpyFu. For example, a SpyFu search for Amazon.com will show you the paid and organic keywords your brand shares with competitors, the CPC for top keywords, and even a breakdown of Amazon’s Google Ads history.
Armed with solid data about your competitors’ performance, you can adjust your creative copy, bids, and ad schedules to make sure you’re not wasting money on unqualified leads or uncommitted customers.
Google lets you set your location targeting areas as wide as the whole globe and as narrow as a certain zip code. You can also exclude locations, so you don’t have to pay for clicks that come from there. For example, if you’re a local car repair business, you probably don’t want to advertise to people on the other side of the country.
Even if you think you’re reaching all the right areas, you could be wasting your budget on customers who are too far away to purchase from your business. That’s why it’s important to check your geographic performance data.
Here’s how to do it:
From here, you can find areas that are burning your budget or simply aren’t driving conversions. To address these red flags, take advantage of Google’s advanced search options. You can upload bulk locations to include or exclude, and even target a certain radius (around your store, for instance).
Google doesn’t provide an option to target specific devices, but there are ways around this. For example, you can decrease your bids by 100% on all devices you don’t want to target. Here’s how you can do this to reach users on desktop only:
This can be a good solution if your mobile ads aren’t driving conversions. However, you don’t simply have to eliminate mobile distribution if your numbers are low. You can first try upping your bids on mobile, especially if you know your customers are active on their smartphones and tablets. If, after doing this, you find you’re still just wasting money on mobile ads, consider pausing them, and refining your strategy.
As part of its advanced location targeting, Google Ads provides the option of targeting areas based on average income, such as lower 50%, 11-20%, and top 10%. The key here is to make sure you use per capita income (which encompasses the whole household) instead of each individual consumer’s income. After all, a single person with a $200K income might have different spending habits than a family member with an entire household income of $200K. To help with this, City Data is a great resource for finding the per capita income of specific regions.
Once you have targeted your areas, here’s how you can change your settings accordingly:
Now you won’t have to worry about wasting your budget on consumers who aren’t prepared to buy your services. You can now more effectively reach those who are ready to open their wallets.
Here’s a problem you might not have considered: people from your own company could be clicking on your ads and costing you money. It’s common for employees to do this by accident, but you shouldn’t have to pay for it.
While you can send a company-wide email telling people not to click on your ads, you can also block colleagues and employees from seeing your ads in the first place. Here’s how:
An even bigger problem is with click frauds. Competitors and other people with the intent to purposely increase your spend, click on your ads. Google has some mechanisms in place to handle it, but it is not sufficient. I will not expand on the top as this is a whole topic of a separate post. Use a service like ClickCease to monitor this.
UPDATE: Starting October 14, 2019, accelerated budget delivery will no longer be available for use with Search campaigns, Shopping campaigns, or shared budgets.
Campaigns using accelerated delivery with those campaign and budget types will be automatically migrated over to standard delivery, starting October 7, 2019. It’s recommended that you switch to Standard delivery by going to your campaign settings page and changing your budget delivery setting. Setting Search network campaigns or shared budgets to accelerated through 3rd party tools or scripts may result in an error.
Accelerated delivery does not help in better utilization of budgets. Campaigns limited by budget and using accelerated budget likely see higher average Cost-per-click (CPC) due to the higher auction pressure in the early hours. If you are having trouble meeting your spend goal, try using the recommendation page optimizations.
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See the below section on accelerated budget to understand why you should avoid using accelerated budgets.
There are two types you can choose for your ad delivery method:
If you’ve been using only one of these options for a while and feel you’re not generating ROI, you might consider switching your delivery method. For instance, if you’re using “Standard” delivery, but your customers aren’t clicking or buying past noon, you could try “Accelerated” delivery and exhaust your budget in the first half of the day when your customers are most active.
Note: If you’re bidding manually, your campaign can be set only to “Standard” delivery.
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If you know the hours and days that your ad performance is most effective, you can set up designated ad schedules. For example, you might want to run your ads only on certain days of the week. Even if you’ve already set up ad schedules, it’s best to check on how your ads are performing since customer behavior can change.
Here’s how you can assess your current schedules:
You can also use ad scheduling to adjust your bids for certain time periods. Say your ad appears in the #1 or #2 spot in the evenings, but you aren’t generating quality leads during that time. You can lower your CPC and save your budget for more profitable times of the day. To do this, simply go to the “Settings” tab, choose “Ad schedule,” and adjust accordingly.
It might be tempting to lump all of your keywords under one ad. However, this can be damaging to your budget and confusing to your audience. Remember: Your keywords should be as close as possible to your ad copy. If they aren’t, users might search for certain keywords and end up seeing results that don’t satisfy their query.
This is why you should parse out your keywords into different ad groups. For example, these groups could be for different products, strategies, or demographics. Doing this will help improve your keyword quality score. It will also make it easier to adjust your bids based on consumer response.
For example, an ad group for women’s boots might have more clicks and a lower CPC than an ad group for men’s boots. You could either pause the ad group for men’s boots, or try changing the strategy for that segment. It would be harder to do this if your ads for women’s boots and men’s boots were in the same ad group.
Absolute Top is the very first ad on the search results page while Top includes all ads above the organic listings.
This might be tough to hear, but it’s true: It’s okay to come in third. In fact, it can be better than coming in first. When some readers search on Google, they might look at the organic results first, and then scroll back up to view the ads in positions three and two. I know I do. The ads in the first spot also tend to get clicks with informational intent, while those in the remaining positions get clicks driven by an intent to buy.
Now let’s look at the numbers. Based on my research, 57% of paid clicks go to the ad in the first spot. The other 43% go to ads in the second, third, and on spots. That’s only a small difference in clicks, and yet the CPC for the first spot is much higher than the CPC for the other positions—sometimes double or triple the amount. So, is it worth it to pay a lot more for just a few more clicks? Probably not.
Now you might be thinking, “Well, if my goal isn’t #1, then what is it?” You might try aiming for what I call the “decimal sweet spot”—an ad rank of 1.5 to 2.5. You can get there by gradually tweaking your bid adjustment like this:
UPDATE: Avg. position is no longer available in Google Ads. Aim for Top not Absolute top.
Consider this: Most people aren’t going to click the first link they see and make a purchase right away. They’re going to look around a bit and do research. As long as you’re in the top three, you’ll be in the running.
The search terms report can be a goldmine of data. It provides a list of the actual search terms that triggered your ads. You’ll also see how many ad impressions and clicks were generated. Here’s how you can access your search terms report:
With this information, you can double down on search terms that are driving leads, and scrap the ones that aren’t. If some search terms don’t match your products and services, you can add them to your negative keywords list, so you don’t have to pay for unproductive clicks.
There’s a secret ingredient that affects your CPC (cost per click) and ad rank. It’s called a quality score. According to Google, your quality score is “an estimate of the quality of your ads, keywords, and landing pages.” Even if you have a high bid, Google might lower your CPC because of your high-quality score—thus saving you money. Quality score improvements can increase your impression shares by 9%.
Ways to improve your quality score:
Once you calculate the LTV of your customers, you will know how much you should spend on Google Ads conversions. For instance, if your LTV is $100 and you’re spending $150 per acquisition, you’re losing money. You’ll need to figure out how to lower your cost per acquisition in order to break even.
There are many ways to calculate your LTV. Entrepreneur suggests this simple formula:
(Average Value of a Sale) X (Number of Repeat Transactions) X (Average Retention Time in Months or Years for a Typical Customer)
In addition, Kissmetrics offers a more complex equation, while Harvard Business School provides a built-in LTV calculator.
If you’re spending and spending without seeing results, it might be time to run some tests. The most effective way to test your ad copy is through split testing, or A/B testing. First, you run two nearly identical ads that differ in only one aspect, such as the headline or display URL. Then, you check the results to see which ad performed better and cut the one that didn’t deliver.
Here’s a quick list of settings that can undergo A/B testing:
If you test several variations of your campaigns, you’ll eventually be able to build the ultimate list of super-optimized ads. Just remember to perform A/B testing regularly in order to adjust to new products, trends, and consumer behaviors.
Getting your customer’s attention on Google is the hard part; the rest is easy! That’s why it’s important to make sure your landing page corresponds with the messaging in your ad. This would include discount offers, promotions, and specific products.
To drive the sale home, your landing page should load quickly, be simple to navigate and tell the reader what they need to know upfront. Still, you don’t want to overwhelm people with information. Therefore, you should also provide easily accessible links and buttons that will take them where they need to go. This will not only help your customers but will also help your business grow and generate conversions.
It can be frustrating to deal with budget leakage, but there are many ways to deal with this issue. As outlined above, you can optimize your keywords, set bids manually, refine your targeting, and take advantage of the many features Google Ads has to offer. With a bit of research and a small investment of time, you’ll be well on your way to saving valuable ad dollars and driving high-quality leads to your business.
