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4 Things I’ve Learned from 2,000+ AdWords Audits

In the last 2 years, I’ve audited a lot of AdWords accounts. And, after reviewing thousands of accounts, you start to notice a few trends.

Unfortunately, one of my most consistent observations has been that AdWords is a great way to lose a lot of money.

Now, I’ve used AdWords to grow a client’s company from 25 employees to 250 employees, so I’ll be the first to tell you that AdWords can be an incredibly powerful marketing tool. However, a few common mistakes prevent most companies from realizing their AdWords potential.

So, why do most companies fail at AdWords? The answers are both simple and surprising.

1. Inadequate Tracking

The foundation of any good AdWords campaign is analytics. In fact, according to Hubspot’s State of Inbound report, companies that track their inbound marketing are 17x more likely to see a positive ROI than companies without good analytics in place.

Now, if you’re already effectively using an analytics platform like Google Tag Manager or Kissmetrics, this figure should come as little surprise. After all, you can’t improve if you don’t know whether or not something is working!

The problem is, only 57.7% of AdWords accounts actually have tracking set up for their site and campaigns.

What is this craziness?

Unfortunately, this finding seems to be one that most companies experience with inbound marketing. Referring back to Hubspot’s report, only 53% of companies track their marketing ROI.

I won’t bore you with the math; but, if you run Hubspot’s numbers, the statistics are daunting:

Without good analytics, 97% of AdWords campaigns fail.

Not surprisingly, almost every single account I’ve audited that didn’t have a great analytics solution in place was struggling to turn a profit on Google.

Fixing the Problem

Fortunately, even if your IT expertise is limited, AdWords doesn’t have to be the marketing version of Russian Roulette. With a little bit of time and patience, you can easily set up conversion tracking in AdWords.

Tracking conversions in AdWords is really as simple as placing the right bit of code on the right page on your site. AdWords even generates the code for you, so you really don’t have a good excuse for not setting this level of tracking up for your campaigns.

adwords-conversion-trackingWhy stop there, though? If you’ve got a decent developer, you can implement Google Tag Manager in 15 minutes. Here are some of the basics you should be tracking. Of course, Kissmetrics is also a great way to get at the data you need.

Yes, setting up analytics is extra work, but it enables you to learn from your successes and your mistakes.

2. Keyword Drain

Here’s where things start to get really interesting. Looking at the 1,000 or so companies that had conversion tracking in place, I discovered that—on average—all of the conversions in an AdWords account come from just 9% of the account’s keywords.

Yes, you read that right—all of the conversions.

To put it simply, for every 10 keywords you bid on, 9 of them produce nothing! Absolutely nothing! And here’s the kicker – that useless 91% of your keywords eats up 61% of your ad spend.

Why does this happen?

Most companies take a shotgun approach to their keyword strategy. Yes, this sort of approach increases your likelihood of some keyword being on target, but it also means that your ads show up for less relevant searches and produce less relevant clicks that aren’t likely to convert.

Plugging the Drain

To figure out which keywords are draining your budget, open AdWords and—while viewing “All campaigns”—go to the Keywords tab. Open the “Details” drop down menu and click “Search Terms All.”

adwords-search-terms-reportFrom there, export the report into an Excel file. Using Excel, you can filter your data to show only search terms with zero conversions. Sum the cost data to see how much you’re spending on search terms that haven’t produced any conversions.

As a rule of thumb, I recommend pulling at least 3-6 months of data to make sure you really have a good picture of which search terms are truly worthless.

Once you’ve identified your budget-sucking keywords, go back into AdWords and eliminate them!

3. Poor Landing Page Strategy

Another problem with the shotgun approach to AdWords is that it makes implementing an effective landing page strategy a daunting task.

Truth be told, nearly 90% of the AdWords accounts I’ve audited had a poor landing page strategy. In fact, 52% of the accounts were pointing their pay-per-click traffic to their homepage. And, of the 48% with a dedicated landing page, less than 15% were conducting landing page tests!

Getting clicks—even the right sort of clicks—to your site, isn’t enough to make your campaigns effective. That’s just the beginning.

Research conducted at Stanford has shown that a poor initial website experience can eliminate up to 75% of your potential sales; so, if your site doesn’t convert clicks into leads or sales, you’re just giving money to Google.

Making it Better

If you want to make money on AdWords, your customers need to have a consistent and compelling experience from keyword to ad copy to landing page.

To create this experience, you need to get granular. You need to dial in to the search intent of your target audience and then match your keywords, ad copy and landing pages to that intent.

With the shotgun approach to keywords, it’s very hard to create this level of granularity. Sure, dynamic keyword insertion can help; but, for most industries, DKI doesn’t give you the messaging control you need to match your searchers’ intent.

cat-adoption-adwords-ad

This ad does a good job of matching the searcher’s intent…until it sends them to this landing page.

dynamic-keyword-insertion-exampleSure, the DKI algorithm put “Cat” in the headline, but the pug hero shot creates an immediate cognitive dissonance that leaves the user thinking, “Wait, what?”

On the other hand, setting up your ad groups with 5 (or less) very similar keywords allows you control what searches trigger your ads. Then, write ads that are highly relevant to those specific searches. Carry that relevance through to the landing page and you’ve just created a very powerful customer experience!

targeted-landing-page-exampleSee? Much better.

With this technique, we often see a 50% lift to conversion rates on our first tests with new clients. And that’s before we start optimization testing…

4. Lack of Attention

Ultimately, the biggest reason that most AdWords campaigns fail is a lack of attention.

No tracking? Spend enough time in AdWords and a lack of conversion data will make you crazy enough that you’ll do whatever it takes to get analytics in place.

Bidding on the wrong search terms? Add enough negative search terms over time and you’ll eventually narrow your campaigns down to what really works.

Inconsistent customer experience? Test your ad copy and landing pages for long enough and you’ll end up with a really compelling click-to-close advertising cycle.

However, according to Larry Kim, only about 10% of AdWords accounts are optimized even once a week. Based on the accounts I’ve reviewed, 72% of accounts haven’t been touched in over a month!

If you don’t give your account enough attention, you are setting yourself up to fail.

The Fix

So, how often should you be optimizing your account? The best answer is that it depends on your traffic and budget.

For budgets over $10,000/month, you should be at least giving your campaigns a thorough review at least once a week. However, to really get the most out of your account, I recommend reviewing your campaigns at least 3 times per week.

For a new campaign, you need to be even more involved. I typically check up on the account at least 3 times per day.

As a general rule of them, the more time you spend in your AdWords account, the better it will perform. Of course, you don’t have to make major changes 3 times a day or week, but keeping close tabs on your account will give you the insight you need to really get great performance.

Conclusion

While most companies struggle to make AdWords work, most businesses can succeed by fixing a few common mistakes. Whether it’s setting up a great tracking program, eliminating useless keywords, creating a holistic landing page strategy or simply giving the account the attention it deserves, these problems can be overcome with a little extra effort.

If you feel like you’re struggling with one of these common problems, let me know in the comments below. I’d be happy to help.

About the Author: Jacob Baadsgaard is the CEO and fearless leader of Disruptive Advertising, an online marketing agency dedicated to using PPC advertising and website optimization to drive sales. His face is as big as his heart and he loves to help businesses achieve their online potential. Connect with him on LinkedIn or Twitter.

  1. Great overview of how people can start improving their AdWords, without being a 30+ point and massively huge guide. Thanks, Jacob!

  2. That percentage of 97% of failure AdWord accounts is incredible. With all the available tools for creating and maintaining Adword’s accounts, I just think it is to high. How could the percentage be so high with regards to the available number of tools?

    • Jacob Baadsgaard Nov 25, 2015 at 4:24 pm

      Hey Ty, keep in mind that this metric only applies to AdWords accounts that aren’t using analytics properly to begin with. Once we get the analytics setup, nearly every single one is wasting most of not all of their budget with almost zero results. Also, when analytics aren’t setup correctly the account structure itself is never setup well either which you would probably expect.

  3. Great article, Jake! It’s really interesting to get some perspective from someone who’s looked at so many accounts.

    I especially liked your points about keyword drain. I’ve certainly seen a lot of AdWords accounts that put all of their budget into the wrong terms. I’ll have to give your recommendations a shot and see what happens.

  4. Excellent concise, actionable guide Jacob. I come across these points on audits frequently myself.

    One more tip I would like to add for Adwords users is create remarketing lists asap. Let them build up in the background. If you’re not sure what type of lists to create, start off using analytics to build a remarketing list of users who have stayed on your site for 45 seconds or more. Then create lists for individual pages/categories etc.

    You can do some really funky stuff with Google Analytics and Remarketing these days.

    • Jacob Baadsgaard Nov 25, 2015 at 4:28 pm

      Great point Ian. Remarketing is such a great way to get additional value from those expensive paid search clicks you worked so hard for to begin with.

      I love the idea of getting started super simple if nothing else and then perhaps advancing to more a more custom audience approach to ensure the right ad copy is delivered based on their behavior.

  5. Anna Tutckaia Nov 25, 2015 at 2:32 pm

    Thank you for the great article. I am about to start a campaign, so it was right on time!
    Cheers

  6. Great article and really good to get your perspective on how to manage keyword drain. It’s something I tend to worry about, but I don’t pay my account the attention it deserves.

    I worry that if I remove keywords that are not being directly attributed to a conversion I could be losing out on terms that assist with the conversion. I’d love to get your thoughts on how to handle this better.

    • Jacob Baadsgaard Dec 03, 2015 at 12:08 pm

      You’re right to be concerned about that impact Gary as I’ve seen that very strategy drop results more than expected.

      I think it comes back to budget limitations. If you are operating on a limited budget you are going to be better off putting those dollars towards keywords that are actually producing not just assisting.

      In the even that you are looking to strategically grow your campaigns, you’ll just need to be detailed in how you test adding and removing search terms based on my recommendations to measure the impact.

      There is a lot to consider here so feel free to hit me up if you’d like to chat more.

  7. Great article, what I’ve learned from my own experience is that watching your keywords closely (which convert and which bounce) is very important.

    Alesia

  8. On the money with this article.

    As far as tracking goes, yes, this is important, but also just knowing how many calls your getting means often nothing, you got to know how many calls turn into $$$, and not just in eCommerce.

    I setup offline conversion tracking to sort this out or use call rail notes to run manual calculations and optimize the campaign on this front more and more for my clients.

    • Jacob Baadsgaard Dec 03, 2015 at 12:13 pm

      There are actually some great call integrations with Salesforce that allow for excellent revenue tracking for phone calls. What CRM are you using to help tie these items together with Call Rail?

  9. Thanks for this great content.

    I am totally agree with the poor landing page and poor keywords selection. Many companies don’t even think of a dedicated landing page for their ads. And if one creates specific landing pages, it is not done with proper attention and planning. I mean it does not look compelling visitors to take action on it. Moreover responsiveness of the page is ignored most of the time. That prevents mobile users to reach to the page. Some time there is no action complete page where we can put the conversion tracking code. In that case one need to create a goal setup in google analytics to calculate conversion. But this works only if your adwords and analytics are connected.

    As far as keywords selection, I filter negative keywords from search terms on daily basis. It helps me a lot. Now I am getting more relevant and qualified leads. I also track ads performance on monthly basis and remove ads on their performance and add new adds per search trends.

  10. Thanks for this great content.

    I am totally agree with the poor landing page and poor keywords selection. Many company don’t even think of a dedicated landing page for their ads. And if one creates specific landing pages, it is not done with proper attention and planning. I mean it does not look compelling visitors to take action on it. Moreover responsiveness of the page is ignored most of the time. That prevents mobile users to reach to the page. Some time there is no action complete page where we can put the conversion tracking code. In that case one need to create a goal setup in google analytics to calculate conversion. But this works only if your adwords and analytics are connected.

    As far as keywords selection, I filter negative keywords from search terms on daily basis. It helps me a lot. Now I am getting more relevant and qualified leads. I also track ads performance on monthly basis and remove ads on their performance and add new adds per search trends.

  11. Before auditing the account, it is vital to understand the goal of the PPC campaign (E.g. Form Submission, Phone Calls, Click To Call, app Install, Download, Maximize clicks & Impressions). This will help you review the Ads, Keywords, Placements, Targeting, Campaign settings and Landing pages based on the overall campaign goals.

  12. Great article, but I have a question about keyword drain for you Jacob (and anyone else that cares to read).

    At what point do you apply that rule to your keyword list? Before pausing a keyword that seems like it has a very relevant and commercial search intent, should the first thought be to test different ad copy and landing pages? I always struggle with pausing keywords that are seemingly relevant on the outside but not converting because I boil it down to the landing page or ad copy not being good enough.

    Should I bypass this thought process and just pause them if I have a lot of data to go off of?

    Thanks!

  13. I have a list of keywords and am doing exact match and have few keywords with broad match modifier. Is this the good way to get most of the impressions?

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