Are You Burning Money On Google Adwords? Find Out Now In Three Easy Steps
Updated on November 21st, 2014
We are often asked about Google Adwords and one of the most common complaints we hear is that people are pouring money into managed programs and have no idea of whether they are being ripped off or getting the best results possible.
So when Alex Fredheim, founder of Ascendancy Digital, sent me an email with the subject line: Adwords Planning Template – What do you think? – it really got my attention. (You can download it here: Google Adwords Planning Template)
This was actually the first time anyone had come to us with a template they had already created. I looked over it and was seriously impressed. It didn’t take much digging to realise that Alex really knew the detail. We haven’t used Adwords too often in our business but the few times we have, I wish I’d had Alex to call on.
I’ll hand over to Alex to share 3 very simple steps to check whether or not you’re being ripped off.
Google Adwords – lead and sale generating machine, or a complete waste of time and money?
The truth is that it can be either. For a lot of businesses, Google Adwords is an extremely effective way of profitably acquiring new customers.
But I’ve also seen countless businesses wasting thousands of dollars on it because they don’t know how to use it correctly, or they’re paying someone to manage it for them who doesn’t know how to use it.
Here are just a few examples:
- An IT services company advertising to people searching for “massage sexual business services” (they were targeting the keyword “business services”).
- A business offering office space for rent in Korea, advertising to people looking for yoga studio space in parts of the U.S.
- A B2B software business spending more than $1,000 per month on ads on iPhone apps and games for young children.
What’s worse is that each of these businesses were paying an agency or contractor for ‘expert’ management!
So if you’re using Adwords in your business and you don’t have a lot of experience with it, how do you know that you’re not throwing money down the drain every month without even realising it?
One option is to engage an Adwords management agency for a ‘free audit’. The problem with this is that as in a lot of agencies will tell you whatever they think you need to hear for you to sign on with them as a clients, so you probably can’t trust what they tell you.
This post provides an alternative. In it I’m going to explain exactly how you can quickly check your own Adwords account now to find out if you’re wasting money every month by making a few simple mistakes.
Ready? Let’s get started.
1. Who Are You Advertising To? Check Your Search Query Report
In Adwords, keywords determine who your ads are shown to. What a lot of advertisers don’t understand is that depending on how you use keyword match types and negative keywords, you can end up advertising to people searching for things that are very different from what your business offers.
How To Check This
You’ll need to open your Search Query Report. This report shows what people have actually searched for before viewing or clicking on your ads, which gives you a very good idea of whether they’re someone who is actually interested in what you’re offering.
- From the Keywords tab, click the ‘Details’ drop-down box and click ‘All’.
- Sort the report by Impressions in descending order by clicking ‘Impr.’, so you’re looking at the search queries that have generated the most impressions first.
- Look closely at the each of the search queries that your ads are showing for. Are they relevant to what your business offers?
What It Means
If the majority of the search queries that you see in your Search Terms report are relevant to your products/services then you’re doing well.
If you’re seeing a lot of irrelevant search queries that a prospective customer would never use, something is wrong with your keyword targeting, and you’re wasting money as a result.
2. Are You Overpaying For Every Ad Click? Check Your Quality Scores
One of the easiest ways to quickly get an idea of the overall ‘health’ of your Adwords campaigns is by looking at your Quality Scores.
Quality Score can be an intimidating concept for new advertisers, but it is essentially a reflection the following:
- Your click-through-rate (CTR). This is the percentage of people who see your ads who actually click on them.
- Your ad relevance. How relevant your ads are to the keywords that you are using in each ad group.
- Your landing page. Google’s perception of the quality and relevance of your landing page.
Google want ads to be re – clicked, because this is how they get paid, so they use Quality Score to penalise advertisers with low CTR (by giving them low Quality Scores), which means that they need to pay more every time your ads are clicked. This compensates Google for the fact that the ads are clicked less often.
Conversely, advertisers whose ads have a high CTR are rewarded with higher Quality Scores, which means that they need to pay less every time their ads are clicked. In this way, it’s possible pay less per click than your competitors, while running your ads in a higher position.
How To Check This
- Open the Keywords tab in Adwords, ensuring that you’re set to ‘All online campaigns’ (unless you want to look at your Quality Scores for a specific campaign).
- Again, sort by Impressions in descending order by clicking ‘Impr.’.
- Add the Quality Score column to your report. By default Google doesn’t show this column, so you’ll need to add this manually by clicking the ‘Columns’ drop-down menu and ‘Customize columns’, and then clicking ‘Add’ next to ‘Qual. Score’ from within the ‘Attributes’ menu.
- Look at your Quality Scores for each keyword, focusing on the keywords with the most impressions.
What It Means
If most of your Quality Scores are at least 6/10, you’re probably using Adwords reasonably well.
If a lot of your Quality Scores are 5/10 or below, you have serious problems with your keyword selection, match type use, landing pages or account organisation and ad relevance. You’re therefore wasting money by spending more than you need to for every ad click, and probably losing clicks and conversions to competitors.
3. How Actively Is Your Account Being Managed? Check Your Change History
While you might be able to get away with taking the ‘set and forget’ approach to Adwords for a while, for most businesses this doesn’t work over the long-term.
To get the most out of Adwords and stay ahead of your competitors, you need to be regularly reviewing and optimising your campaigns.
How To Check This
To check if you (or your agency) have been doing this, Google Adwords provides the Change History report, which shows exactly what changes have been made in the account since its inception.
- From within Adwords, click ‘Tools’ in the top menu and ‘Change History’ from the drop-down menu.
- Select the date range that you want to look at in the top right hand corner. By default the report shows changes made by all users for all campaigns, however you can choose to view changes made by specific users or to specific campaigns using the ‘Filter’ drop-down menu.
- Look at the frequency and types of changes that are being made.
What It Means
If your Change History report shows a number of different changes being made regularly, it’s probably a good indication that the account is being reasonably well managed .This isn’t always the case though – sometimes making the wrong changes are worse than making none at all.
If the report isn’t showing a lot of work being done, it probably means that your account is being neglected and isn’t getting the attention it needs, which could mean that you’re losing out on leads and sales to competitors who are spending more time on Google Adwords.
What did you find in your own account? Have you been wasting money on Adwords? Leave a comment below.
Alex Fredheim is the founder of Ascendancy Digital, an agency that specialises in helping businesses profitably increase their leads, sales and revenue through Google Adwords.