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How to NOT Waste Money in AdWords

AdWords is quite capable of setting your credit card on fire and wasting money at epic levels, but it can also create great value. The difference in these two outcomes is driven by how the account is managed and where the energies of the account are focused. Here are some pointers on how to avoid wasting money in AdWords.

Don’t Treat all Keywords the same

In almost every account keywords break down into winners, losers, and the silent majority. Each of these needs a separate strategy.

Winners are the keywords everyone loves to buy, but they never have enough volume. The strategy in this class is to buy all the traffic you can. Make sure these words are isolated and fully funded so you buy these first and fully.

Losers are equally easy to indentify because they have no regard for your money and spend it freely with zero return. The only tough part about the losers is deciding at what point they become a loser. Pull the trigger too early and you could kill a good word; too late and you waste lots of money. Our general rule of thumb for losers is when they reach a click level that has missed 4 conversions based on the account average. For example if your normal conversion rate is 1% and the keyword has had 400 clicks with zero conversions then it’s a loser. If it has 2 or more conversions and the cost is above your maximum target CPA then it’s a loser.

The Silent Majority is what makes or breaks most accounts and it has to be managed with averages. This includes lots of low volume words that never get enough traffic independently to be either a winner or a loser. The problem here is that if the word has had one or zero conversions then the probability of getting another conversion is pretty low. Each word in the list is just as likely to get a conversion as any other and none of them have the volume needed to become either a winner or loser.

Don’t Skip the Negative Keywords

An AdWords account without a good rich set of negative keywords is a crime of the financial type. Every month the Search Query Report needs to be reviewed for new negative words and that should go on forever.  Everyone knows their primary keywords but very few know all the negatives they need to make their account really run at its highest level.

Don’t Try to Sell with Your Ad Copy

Let’s face the facts, it’s tough enough to earn a click with 95 letters and spaces (the limit of an AdWords Ad) so trying to sell something is just not going to happen. You need to focus on what is important, and what is important is getting the person to your website so you can better present your offer. About the only exception to this is the priced advertisement. If your big guns are the prices you offer then that can go into the ad. It does work, but you better be the low cost provider because your ads are going to appear price and all right next to your competitors.

Don’t Create Split Tests with More Than 2 ads

Split tests are simple to set up and complicated to analyze. The more variables in Ad Copy the worse this gets. You need to make sure that you test one thing at a time to cut the variables down to some reasonable level. You need to have a significant number of clicks to prove a click through rate and a significant number of conversions to prove performance and there is no shortcut to this. Depending on how close the results are the number required to be significant can be large so it can take time to gather that level of data.

Don’t Think that AdWords in Search Creates Demand

AdWords serves the demand of the searcher but it does not create demand. The proof of this statement is that the search query was created in the mind of the searcher before they ever saw your advertisement. To create demand you need to look at PR or advertising outside of AdWords Search.

Don’t Think You Know Something You Don’t

Let’s face it as humans we like to think we know why things do what they do, it is just our natural curiosity.  Getting from correlation to causation is at best an art form, especially in AdWords. We have run dozens of split tests with no variables but with different results, which proves that split testing is a clue not a fact. The other things we like to do here is take a very tiny piece of data and try to draw a conclusion from it. I saw the results of a split test where the person drew a conclusion and talked at length about the facts of the test – with 11 clicks over 4 ads!!! Let’s just say this is stupid to monumental level.

Don’t Go it alone

AdWords combines psychology, marketing, math, and language – it’s complicated. One person operating in isolation cannot possibly think of all the different variables with all the perspectives. The more people you engage in your AdWords strategy the better your account is likely to run. This does not mean that we advocate multiple people maintain the account but you need diversity in thought for the strategy development.

In Closing

In business you can pay for things either Cash or Creativity; it’s your choice. In our marketing we spend the creativity first and the cash last and we recommend you do the same.

Author: Bob Dumouchel
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