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This is an excellent example of how not to run a search marketing campaign!

eBay once announced that the company is pulling the plug on its AdWords account and pointed to its recent research that paid ads don’t work.

A lot of things don’t work when you don’t use them properly (you can’t take a shower in your dishwasher), however, and eBay seems to have conducted a shocking number of silly things in its AdWords account. eBay has done a pretty bad job with its ads. Bizarre, boring, and repetitive ad text combined with aggressive use of DKI (Dynamic Keyword Insertion) is a recipe for disaster.

The company could also benefit from the use of negative keywords, which let advertisers specify exclusionary words for which they do not want to appear. However, eBay’s weird ads aren’t just ineffective, they also cost eBay tons of money. It took eBay around 10 years to figure out it has been failing at AdWords. eBay’s funny ads have been a fixture on Google search results pages for many years.

How can eBay expect online advertising to work for it when the company has been sinking hundreds of millions of dollars into a broken setup for years?

Now this is a case of poor AdWords management and here is where you get a chance to learn from mistakes.

Internet marketers know that using Google AdWords is an excellent way to drive traffic to their sites. Since it can be expensive if not handled correctly, the trick is to manage campaigns to get the highest return on investment. A poorly managed campaign can cost more than it brings in, but a well-managed campaign can keep your store or company in business. It all comes down to how much you know about AdWords and how smartly you can manage your campaigns.

Find the infographic on weekly AdWords Management Checklist here.

So before talking about how to manage your AdWords accounts better, here are some common mistakes made while using Google Adwords.

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I. Are you making these common AdWords mistakes?

To better manage your ad campaign, you first need to understand what mistakes are generally done with Google Adwords. By avoiding these mistakes and then following the optimization path discussed, you’ll be on your way to a highly successful AdWords campaign.

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Mistake #1 : Not Grouping Keywords Correctly

Not using ad groups is one of the biggest mistakes people make. Instead of segmenting their ads into groups based on similar types of keywords, they lump all of their keywords into one ad group and show everyone the same ad.

But you should understand that the closer the ad copy matches the keyword, the more likely people are to click on the ad. The more you break up your ads and keywords into themes, the easier your campaigns will be to monitor and optimize.

Example: Samsung sells several different products like laptops, desktops, tablets, and smartphones. If they didn’t break up their products into different groups, then they wouldn’t be able to show specific ads based on what people are searching for. They would have to resort to an ad with a headline such as “Buy Samsung Products” instead of an ad that matches what people are searching for.

Instead, Samsung uses ad groups for each of their products so they can use headlines like “Samsung Google Nexus S 4G” or “Samsung Galaxy” when people search for those respective products.

Rule of Thumb: To use no more than 20 keywords per ad group. Sometimes you can get away with using a few more, but exceeding a 20 keyword limit is a sign that your ad copy isn’t matching the keyword being searched as closely as it could.

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Mistake #2 : Not Using the Right Keyword Matches

The next biggest mistake people make is not using the right broad match, phrase match, or exact match keywords.

  1. A broad match keyword means that your ads will show if the keywords are used in the search, regardless of the order.

    Example: If you add “Nike running shoes,”, your ad will show up for people who type “Nike running shoes,” “Nike free running shoes,” and “where can I buy Nike shoes for running.”

  2. A phrase match keyword means the keyword phrase needs to show up in the search as a complete phrase in the order you enter it.

    Example: When you enter “Nike running shoes” as a phrase match keyword, then your ad will show up for terms like “Nike running shoes” and “where can I buy Nike running shoes.”

  3. An exact match keyword works just like it sounds. The term being searched needs to exactly match the keyword that you entered in AdWords.

    Example: If you have “Nike running shoes” as an exact match, it will show up only when someone searches for “Nike running shoes” and won’t show up even if someone searches for “Nike running shoes for sale.”

So why does all of this matter? It matters because the type of match you use will have a big impact on your ads. A broad match will deliver more impressions, but it will be more imprecise since it will show up for terms that aren’t a tight fit for your products or the ad.

On the flip side, phrase and exact matches often provide a higher conversion rate, but they can deliver significantly fewer impressions, which means you may not reach as many people as you need to reach.

The best scenario is to tweak your matches to find what works best for your business.

Rule of Thumb: A good approach is to start with exact matches and then expand to phrase and broad as needed. If you aren’t getting enough impressions and conversions with exact matches, then you can add the terms as a phrase match and eventually as a broad match.

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Mistake #3 : Not Using Negative Keywords

Another mistake people make is not using negative keywords. AdWords allows you to use negative keywords as a way to exclude keywords that are not a good match for your product.

Example: If you own an e-retail store that sells designer men’s shoes but not athletic shoes, then you won’t want your ads to show up on searches for “men’s running shoes” but do want them to show up on searches for “men’s shoes.” Thus, you can add “running” as a negative keyword, and your ads won’t be shown for any searches that include the word “running.”

Negative keywords can be added at both the campaign and the ad group level. Thus, if a word should be excluded from only one particular ad group, then you can exclude it at the group level, but if you want it excluded from the entire campaign, then you can do that as well.

Rule of thumb: In order to find words that should be excluded, you need to dig into Google Analytics since it has more detailed information than AdWords about specific keyword searches. Within Analytics, you can view the exact keyword phrases people are searching for and which ones aren’t converting well.

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Mistake #4 : Not Trusting Numbers More than Your Creativity

Falling in love with your ad copy can be a problem. You may write some copy and think, “I love this ad!” That’s fine, unless the numbers tell you otherwise.

You should always be testing your copy. You can try two different headline variations, the same headlines but different body copy, or the same copy but a different call to action. Testing different variations will help you to know what works best.

Example: Sometimes mentioning a benefit will increase click-throughs and/or conversions. Other times, a different headline will improve your results.

Rule of thumb: To always be testing. Once you have a winner for one test, turn off the loser, and change the ad copy again. Always try to beat the winner until you’re happy with the results. You may be surprised that this kind of testing can eventually lead to doubling your conversion rates and halving your cost per acquisition.

 

Mistake #5 : Not Bidding on Your Own Brand

A lot of people make the mistake of not bidding on their own brand. They assume that since they already rank for their own brand, they don’t need to advertise for it.

But another way to look at it is that if you aren’t advertising for your brand, other companies will. They’ll use your brand name for an ad group and target your visitors. Yes, you’ll rank first for the organic term, but your competitor may be advertising directly above that result.

Example: If samsung was not bidding for its own laptops,it gives a chance for its competitor like Apple or Dell to run an ad on its search showing its best products. This might lead to loosing your customers.

Rule of thumb: In many cases, it makes sense to bid the highest for your own brand since people who are searching for your company are the most likely to convert. You want to make sure you’re at the very top for your own brand name, which means you can spend the most on branded terms.

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Mistake #6 : Not Knowing the Lifetime Value (LTV) of Customers

Have you ever calculated the LTV for your customers? If not, there’s no way to know how much you can spend on AdWords per acquisition.

A lot of companies don’t know their LTV so they don’t know what a good CPA (Cost-Per-Action) is. If customers stay with you an average of six months and pay $30 per month, then your LTV is $180. In this scenario, you’ll be doing okay even if your Google CPA is $100. It all depends on what you’re selling and what the LTV is for your business.

Example: Let’s say your LTV is $12. This means that you’ll earn $12 on average over the lifetime of doing business with your customers. If you’re paying $8 per acquisition, then you’re ok, because you’re making more per customer than you’re spending. But if your LTV is $6 and you’re spending $8 per acquisition, eventually you’ll go out of business.

Rule of thumb: Calculate the LTV for your business, and then manage your campaigns accordingly.

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Mistake #7 : Not Testing the Optimal Ad Position

Without testing, there’s no way to know which ad position is the best for your business. Sometimes being in one of the top two positions works great, but other times, positions 3-4 provide a better return.

If your goal is to improve branding, then it’s a good idea to be in one of the top two ad positions, but if your goal is to get the best results, sometimes it’s better to be in position 3-5.

Example: With the top two positions, people may click whether they’re seriously interested or not. But if your ad is in position 3-5 (or possibly lower), then it’s not the first thing people see. People have to look at the side of their screen, which usually is something they do only after they’re not able to find what they’re looking for. Thus, being on the side acts as a filter.

Rule of thumb: Test to find the optimal position by raising or lowering your bid on cost per click. Lower it and then see what happens. If Google suggests a $1 to $3 bid, start with $1 to see what the results are. If they’re good enough, you may not need to pay more per click.

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Mistake #8 : Not Knowing Who You’re Competing Against

Another mistake is not knowing which ads your competitors are using. You need to know who you’re competing against, what keywords they’re using, and what their landing pages look like.

Specifically, you want to put yourself in your customers’ shoes and see which ad you’re most likely to click on. Then, once you do click, pay attention to their landing pages, and compare theirs with yours.

Example: The ads that are run by Apple and Samsung may be equally good but the one who is able to make them stay on their landing pages benefits. So, create a checklist based on the things you find in your competitors pages and see to it that you are doing much better that for your customers.

Rule of thumb: Do your research to know who your competitors are and build strategies according to that.

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Mistake #9 : Expecting Too Much from AdWords

A lot of people have a really small budget and expect to launch the next big business with that tiny budget. They want to get in front of a large audience but have only $100 to $200 to spend per month. That’s not going to get you very far.

If your budget is too small, you won’t have enough to test your ads until they start performing well. Rarely does anyone nail a campaign right off the bat. It takes time to run and optimize your campaign to improve your return.

A small budget also means you’re going to burn through your campaign and will have to wait until more money is available. That gets frustrating. You’ll feel like, “This doesn’t work for me. I’m going to try something else.”

Rule of thumb: Start with a large enough budget that allows you to drive a significant amount of traffic and gives you time to tweak and optimize your campaigns. Make sure you also stick with the campaigns long enough to give them time to gain traction and to give yourself time to figure out how AdWords works and how you can get the highest return.

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Mistake #10 : Not Directing Visitors to the Appropriate Product or Category Page

Possibly, the biggest mistake of all that people make with AdWords is not directing customers to an appropriate product or category page. Instead, they direct everyone to their homepage.

Even if you have a pretty homepage, you don’t want to take people there directly, especially on e-commerce sites where you have category and product pages. It’s better to take people to a landing page or a product or category page where people will see a direct match to the ad they clicked.

Example: If you sell wedding related items, create ad groups based around themes like “bridesmaid gifts” and “groomsmen gifts.” Then take people to category pages for each of these items instead of to your landing page where they’ll have to click around to find the products they were interested in.

Rule of thumb: Make sure the page people land on matches the ad copy they clicked.

 

The rule of thumb just gives you an idea of what can be done to optimize your campaigns using Adwords. Now, here is what you should make: A Weekly Checklist in-order to reap the best results of the recommendations made. avoid the common pitfalls most people get stuck in with AdWords.

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II. AdWords Management Process

AdWords is quite a complex tool, and one that not everyone can understand. That leaves many people in the dark about arguably one of the most important aspects of online marketing. So this is what you can do to avoid the above mentioned expensive mistakes!

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A. Compare Your Metrics to the Previous Period

AdWords allows you to compare changes in a metric for two equal periods of time. A quick review consists of evaluating changes that happened in a 14, 7, or 1 day periods to spot potential good or bad trends.

To get started, you need to go into the campaign section of your site and click on the top right of the screen where it indicates the time frame you are analyzing. Select the time frame, preferably 7 days and switch on the “Compare Function” and click “Apply”. Make sure to compare clicks, impressions, CTR, and conversions so you are on top of any important changes. Yo can also check it out at the ad group level and find out even more.

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B. Add the Bounce Rate and Average Time on Site in Your Keywords Tab

This could help you decide whether a keyword is going to be a waste of money or not. Specifically, focus on a seven day period and evaluate whether a keyword is generating engaged and relevant traffic given a statistically relevant amount of clicks.

In order to add these two columns, you need to first link AdWords to Analytics from your account linking tab under account settings.Once you have that done, go back to the keywords tab, click on “Column” and then on “Customize Columns”. You will find the bounce rate and average time on site tabs in the Analytics sub menu.

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C. Evaluate the Performance of Your Ads

Running your top ads and implementing new tests is extremely important for an AdWords account. Staying on top of things won’t take much of your time (except for large accounts, since they have so much more information to look at).

First, open the ad groups tab and filter out all display campaigns (you can save this filter and use it again). Then, sort the ad groups by clicks and open new tabs for the ones with the majority of traffic. Check the status of each of the ad tests and optimize accordingly (you will select the most appropriate time frame depending on when and how you optimize your accounts).

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D. Skip Through the Search Query Report for New Negative Keywords

The search query report is an important indicator of traffic quality. You can analyze it using a seven day range and skip through the terms that retrieved your ad to figure out if and where you are wasting money.

In order to analyze a search query report you first need to select the time range you would like to analyze and then go to your keywords tab. Once there, click “Details” and then “All” in the keywords menu. You will now get access to the list of search queries that retrieved your ads to find out what needs to be added as a positive or negative keyword.

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E. Check the Bidding Strategy for Relevant Keywords on Low Position With Low CTR

Depending on your budget and knowledge of your AdWords market, you may have a good idea where the best position for your ads is. For sure, you have an idea about the lowest advertising position you are comfortable with. It is a good practice to periodically check for the keywords showing in positions below your preferred position to find relevant terms with a low CTR. These are most likely to benefit by an increase in the bid.

In order to get to the keywords fitting your requirements you need to create a filter in the keyword tab. Just click on filter. And then select the rules for the advertising position and CTR that match your requirements. You will now be able to quickly adjust bids in just a few clicks.

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F. Compare Impression Share to Impression Share Lost Due to Rank and Budget

You can see the impression share as a measure of how much ad market share you have for a set of keywords, a single keyword, or a campaign. Just remember you will have a “shared” market share since ad space will be shared with other companies in different ad positions.

In order to be able to add this information you need to add three columns, following the procedure already discussed. In this case, you will find the new columns (Search Impr. Share, Search Lost IS (rank) and Search Lost IS (budget)) in the competitive metrics sub menu.

This information will tell you how many times your ad is showing up given 100 potential searches for target keywords (Search Impr. Share), how many impressions you are losing due to a low-budget (Search Lost IS (budget)), and how many impressions you are losing due to quality score or bid Search Lost IS (rank)). You will now be able to spot areas for improvement right away!

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G. Evaluate the Impression Share of Top Converting Keywords for New Opportunities

This point is similar to the one above. The difference? You will now look at the statistics from the keyword point of view. This is quite helpful information since it allows you to understand if you can get more out of profitable keywords or if you should look for better conversions via other means.A

Optimizing an AdWords campaign obviously requires more than 10 minutes a day or more than an hour per week, but being able to quickly get an overview of what’s going on in your account is extremely helpful.

Make checking your account a habit and you will be able to boost your performance with minimal work.

Sruthi Varanasi

About Sruthi Varanasi

A Passionate learner, optimist and music-lover. Digital marketing has always spun interest in me and I am here to know more about this ever evolving industry. Writing gives me immense satisfaction and that's how I'm a content writer now.