Google Adwords is big business.
And where does that revenue come from?
Business owners—just like you.
With figures like that, it’s easy to appreciate why so many business owners pay for traffic.
In fact, when you get it right, it’s possible to make an average of $2 in revenue for every $1 you spend (if not more).
But when you get it wrong?
It can literally kill your business.
Money is squandered as business owners are left wondering, “Where did it all go wrong?”
That’s not going to happen to you, though.
In this article, I’m going to share with you the five most costly Google Adwords mistakes and more important, how to avoid them so you can grow your business in a predictable and scalable way.
If you’re new to Google Adwords, you might want to read this article, first. But if you’re already knee-deep in the pay-per-click trenches and want to maximize your returns, this article is for you.
Let’s get started.
Mistake #1: Putting Too Many Keywords in One Adgroup
Many first-time campaigners begin with one campaign and one Ad group.
Make sense, right?
No one wants to overcomplicate things when they’re just starting out.
In doing so, however, they include too many keywords in their adgroup.
Moreover, many of them are to loosely related.
And when you run run ads that aren’t specific to your prospects’ search queries, you risk lowering your quality score (which, if you’re new to Adwords, is crucial to campaign success).
A quality score is essentially an estimate of the quality of your ads. The lower quality your ads, the lower your ad position and the poorer return on your ad spends.
When you have too many keywords in an ad group (especially keywords that aren’t closely related), you reduce the likelihood the ad in that ad group will match your prospects’ search queries.
The solution, then, is to include fewer keywords in your Ad groups while increasing their relevancy.
When building out a campaign, you should first start off with very targeted keywords. This is really important if you have a limited budget as the broad keywords can eat up your budget fast and provide little to no conversions.
There’s no magic number for how many keywords to include per Ad Group. And depending on who you ask, you’ll hear a different response.
Here, at Authority Factory, we recommend 3-5 keywords per ad group.
What matters most, though, is how relevant your keywords and ad copy are to one another.
One of my favorite tools for keyword research is SEM Keyword Magic Tool because it displays your competitors’ keywords:
With it, you can view your where they’re ranking in the SERPs, how much they’re paying and more.
How better to model that a competitor who’s outranking you?
Mistake #2: Not Using The Right Keyword Matches
Another keyword-related mistake business owners make when creating a winning Adwords campaigns is failing to familiarize themselves with Google’s keyword matching options.
A strong understanding [of keyword match types] will put you in a position to spend your money wisely without fear of attracting irrelevant traffic.
Understanding keyword matches helps you control which searches trigger your ad. The more targeted your ads, the better your click-through rate, the higher your quality score and the more cost-effective your campaigns become.
When building an Adwords campaign, you have the option of three keyword matches, each with its own advantages and disadvantages (which we’ll discuss).
- Broad match
- Phrase match
- Exact match
Let’s look at each in detail.
- Broad match
With broad match, Google’s default match type, your ads will only target searches that include at least one of your keywords.
For example, if you add “24/7 plumber Sydney” to your list of keywords, your ad will show up for people who type “27/7 plumber Sydney,” “24/7 affordable plumber Sydney,” and “Where can I find a 24/7 plumber in Sydney?”
While broad match can reveal new, previously unknown keyword variations, it can become costly because your ads might not be relevant enough to convert.
If you’re looking to scale, broad match is a perfect fit for you. But if you’re on a tight budget, you might be better suited for phrase or exact match types.
- Phrase match
When you use phrase match, you can show your ad to prospects who are searching for your exact keyword and close variants of your exact keyword, with additional words before or after.
In other words, the keywords your prospects are typing need to match the ones you entered into Adwords.
Using our previous example, if a prospect typed in “24/7 plumber Sydney”, “24/7 plumber Sydney” or “Where can I find a 24/7 plumber in Sydney?” your ad would show.
On the other hand, if a query was interjected with another word—like “24/7 affordable plumber Sydney”—the user wouldn’t see your ad.
Phrase match is an intermediary for broad and exact match type: more targeted than the former, but more flexible than the latter.
- Exact match
When you target exact match, you can show your ad to customers who are searching for your exact keyword, or close variants of your exact keyword, exclusively.
For example, a searcher typing in “24/7 plumber Sydney” will trigger your ad, but won’t if they phrase it as a question, instead (“Where can I find a 24/7 plumber in Sydney?”).
Of the three keyword matching options, exact match gives you the most control over who sees your ad.
And with that, comes a higher click-through rate, quality score, and of course, return on investment.
Much like phrase match, exact match will convert well (especially if you’re in a niche market and know your audience well), but it will also limit your reach, thus, providing fewer impressions.
One option for maximizing your Adwords reach (especially if you’re on a tight budget), is cascading your bids:
Coined by Visibility Conversions, cascading bids involves incorporating all three match types.
Cascading bids involves you setting the lowest bids for broad match keywords, the highest bids for exact match keywords, and a bid somewhere in the middle for phrase match keywords.
It’s important that you carve out time to research and think about your bidding strategy. There are many schools of thought on bidding, and while there’s no “one-size-fits all” approach, there are different strategies for different objectives.
I advise client to read up on different bidding strategies, find a few that fit your budget and objectives, and then invest at least three months to test each one. Continue to experiment and iterate you find the strategy that works best for your business’s growth goals and profitability.
Google have published a lot of information on bidding strategies. I recommend you begin your research there.
Mistake #3: Not Using Negative Keywords
With that many searches, there’s a lot of low-quality, keywords that negatively affect your campaigns.
These are called “negative keywords”.
According to Google, a negative search is a keyword that prevents your ad from being triggered by a certain word or phrase.
For example, if you were running a chiropractic clinic and targeted “chiropractor Sydney”, you probably wouldn’t want your ads triggered for users typing “cheap chiropractic Sydney” (unless you’re competitive that is)
Depending on your budget, you can exclude words on a campaign and Ad Group level.
If you’re already running campaigns, you can often discover negative keywords by logging into Google Analytics and looking at your lowest performing campaigns.
Take a look to see if a negative keyword can be added to eliminate that keyword from your campaign without excluding terms that are performing well.
Carve out time and research negative keywords that are relative to your industry.
Understanding where your prospects are in relation to the buyer’s journey will help you achieve this.
To discover any negative keywords in your campaigns, try Wordstream’s free negative keyword tool.
Mistake #4: Not Directing Visitors to Appropriate Services Pages
Most business owners want to drive traffic to their home page.
And why not?
The rationale is fair: show visitors who you and what you’re about, and they’re more likely to buy from you.
But this overlooks an important truth:
Users want to land on pages that are relevant to what they’re searching for.
If they search for “divorce lawyer Brisbane” and they land on a general home page for a law firm that offers multiple services, guess what they’re going to do?
(Hint: it involves the “back” button)
It’s important to understand that Adworks works best when you drive traffic to a dedicated landing page.
Because it matches the expectation the searcher has.
According to Wordstream, 64.6% of people click on Google ads when they are looking to buy an item online.
That means when a prospect clicks on an ad, they expect to be presented with an offer that matches the ad copy.
In other words, there needs to be a message match between your ad copy and landing page.
If there’s a mismatch, your prospects will click back and—you guessed it—the lower your quality score (and revenue) will be.
The goal is to minimize as many steps as possible. The fewer steps a prospect has to take to make an inquiry, the higher the likelihood of conversion.
Make your ad copy consistent with what the prospect will find when they click-through.
ServiceHeroes, a Sydney-based plumbing service, understands the importance of this.
Take a look at their prospect’s journey.
First, they type in their query…
…then they click on ServiceHeroes’ ad…
…finally, they land on a services page dedicated to the New South Wales region with a clear call-to-action:
By driving targeted traffic to a dedicated services page, ServiceHeroes are able to drive higher conversions because they have pages specific to each area of the region they’re servicing.
It’s hyper-targeting at its finest…
…and it works like a charm.
Here’s what their home page looks like, without clicking on their Adwords ad:
Not as relevant now, is it?
To learn more about how to build landing pages that convert, read this article.
Mistake #5: Not Knowing Your Customer Lifetime Value
One way to identify your maximum Adwords cost per lead (M-CPL) acquisition strategy and estimate marketing costs is to calculate the lifetime value (LTV) of a customer.
Put simply, customer LTV is the projected revenue that a customer will generate during their lifetime.
To calculate a customer’s profitability over time, you need to multiply how much money a customer brings in per year by the number of years they remain a customer.
When you know your customer LTV, you know exactly how much of your marketing budget you can invest in acquiring new customers, allowing you to out-bid, out-perform, and eventually outrank your competitors.
Here’s an example to help clarify…
Let’s imagine you’re a chiropractor. You charge $65 per hour, your average customer works with you once a week and remains with you for four weeks. That’s a customer LTV of $260.
If you pay $156 per lead, then you’re acquiring new customers at a profit. But if you’re spending more than that because of wasted clicks, misleading copy, poorly-designed landing pages … then you’re going to go hemorrhage money—fast.
Knowing your customer LTV gives you an immediate edge over your competition because many business owners don’t consider the true monetary value of their customers.
And those who do, fail to consider factors beyond LTV like customer referrals, repeat business, etc.
To illustrate this, further, let’s return to our previous example.
If you have a 4-week customer who is likely to return, say, twice in two years, then their LTV jumps from $260 to $780.
But if your competition never consider factors like this, they’re only going to pay $156 per lead.
With that in mind, you invest, say, an extra $100 and pay $256 per lead, allowing you to acquire three times as many customers and grow three times faster.
Knowing your customer LTV gives you an informed, data-driven answer to what your marketing budget needs to be and helps your grow your business at a rate you can sustain.
To better familiarize yourself with customer LTV (including how to increase it), read Tommy Walker’s thorough article on the subject.
Google Adwords can make your business or it can break it.
If you go in naively, you will make mistakes, bleed money and struggle to recoup your Ad spend.
But if you take the time to experiment with Adwords and familiarize yourself with the mistakes outlined here, you can contribute to Google’s bottom line knowing you’re benefiting, too.
Have you made any of these mistakes? Did we miss any? Leave a comment below.