Ask any marketer about the importance of keyword optimization in Google Ads (formerly AdWords) and you’ll get the same reply – it’s critical to your success.
Google Ads is arguably the best marketing channel for return on investment, bar none.
And yet, so many people lose money because they fail to setup and optimize their campaigns correctly. “Businesses waste on average 25% of their Google Ads budget each month”, says a study on Search Engine Watch.
Let’s not fall in to that trap…
Keyword Optimization is Your Edge
The key reasons for this missed opportunities and wasted spend by advertisers in pay per click:
- Poor keyword selection leading to wasted spend
- Clicks occurring outside their target market
- Sub-optimal ad relevancy and quality score
- A lack of time and/or expertise to optimize keywords and campaigns
Wasted budget also means missed opportunities.
Your budget is used up before it has a chance to shine and generate leads and sales for your business.
Is Wasted Google Ad Spend Killing Your Campaigns?
The amount of wasted spend identified through research is scandalous. But it gets worse, other agencies like Disruptive Advertising have performed similar studies, and their results were even higher.
In their case they reported that up to 61% of Google Ad budgets where completely wasted.
You could argue it’s not surprising, perhaps even to be expected. After all, there are literally hundreds of options you can take and optimizations you can make to an advertising campaign!
The question is then – what do we do to avoid a similar fate?
First we need to understand what the problem areas look like:
The Biggest Causes of Wasted Ad Spend
- Not uploading enough negative keywords
- Failing to review which keywords are and aren’t working
- Not narrowing and honing targeting
- Failing to test advert variations
- Not optimizing landing pages
Thankfully some of the simplest ways to minimize wasted spend are the most effective, and they aren’t hard to implement.
In fact, it takes as little as 30 minutes to perform simple optimization steps that can lead to thousands in savings.
Right now, you’re going to learn how to: identify budget saving opportunities and stop wasted spend by implementing these techniques.
After correctly implementing the steps outlined below, you’ll benefit from:
- higher click-through rates
- higher quality scores
- higher conversion rates
- and potentially lower costs per click too.
Let’s get started:
1. Search Term Reports Hide Wasted Spend
Most of us invest a lot of thought and eﬀort into building our campaigns.
Central to your campaign is the keywords that live within. These keyword lists are made – hopefully – up of search terms that are very closely related to your product or service.
However, broad and phrase match keywords (that are often necessary to generate volume) leave room for the system to interpret your keyword’s meaning, and very often, mistakenly trigger your ads for search queries that simply aren’t relevant to your business.
Real example of how Google can misinterpret a keyword.
We ran the keyword “liberty mutual auto insurance” as broad match inside an auto insurance campaign (a very expensive niche).
While navigating the search term report, we found that search terms similar to the following were generating quite a few clicks: “grand theft auto liberty city”. In case you don’t know, that’s the title of a very popular video game.
We identified this problem pretty quickly using the search term report, and immediately added “grand theft auto” and “liberty city” to our negative keywords list.
Can you imagine how much money gamers would have cost us if we hadn’t looked at this report?
A few clicks would have been over $100.
A few days and it could have been thousands, after a month?
How can we stop it?
Thankfully, the search term report makes it fairly easy to identify terms that we don’t want triggering our ads.
We’re going to learn the simple steps that are necessary to find either totally unrelated terms like the one we identified in the ‘auto insurance’ example, or terms that signal us that the user is not in buying mode.
What do I mean by “buying mode”?
Let’s say we are selling a “learn Italian course”. If we find through the search terms report that a user used a search term such as “speak italian free download”, it’s pretty clear that although the searcher mentioned “Italian course”, the “free download” makes it pretty clear that they’re not not interested in buying a course.
Although the search is related to our service, we would want to add “free download” as a negative keyword in order to keep away non-buyers from seeing and clicking our ads, and costing us money.
Search query report step-by-step
Step 1: Start with a high spending Ad Group. Inside your Ad Group’s keywords tab, click “Search terms”
Step 2: Adjust your date range to your desirable reporting period (you want enough data). Sort the report by impressions as you want to start by the terms generating the highest search volume.
Step 3: Now you have two options. The quick and dirty way is to use your browser search by hitting CTRL-F and type the keyword you’re targeting. For example, if you’re selling used cars, you might want to type “used cars”. You can also use the “Add filter” > “Keyword text” option.
Step 4: Look for one and two word terms that are unrelated, or do not reflect buying intent. Take a note of those words.
Step 5: You can tick the box next to each query as you scroll and add them to your negatives once you’re done. However, we’re looking for quick wins by focusing on your target term for now.
After reviewing your report, copy your list and paste it to your negative keywords list. Ideally you’ll maintain a shared negative keyword list across related campaigns so this is a once and done task.
Important: keyword match types also apply to negatives.
There are many times when you simply add a negative as a broad match. But sometimes it’s wise to negative certain terms when used in a “specific order” (phrase match), or when used [exactly] if you want to block that specific query as is (exact match).
2. Stop Non-buyers from Clicking Your Ads
If you’re using Google Ads, odds are, you have something to sell.
Unfortunately for us advertisers, not all Google searchers are interested, willing or able to buy. Our job is to weed out non-buyers to stop wasted spend.
Adding negative keywords that indicate non-buying behavior is core to a healthy account and central to your keyword optimization efforts.
Shared negative keyword lists
We’ve collated a wide range of negative lists of search behavior you might want to exclude.
An example of these behaviors would be: research queries, job seeking searches, do-it-yourself, freebies and cheap, among others.
Step 1: Download this spreadsheet.
Step 2: Select and copy the keywords that aren’t relevant to your niche or industry.
Step 3: You might want to use this list you just created every time your create a campaign for this niche, click your “tools” icon, and then click “negative keyword lists”.
Step 4: Create the list by hitting the big blue + sign, give it a name, paste your selected negatives and save it.
Step 5: Lastly, apply your newly created list to your campaigns – just click “Apply to campaigns” and select the appropriate ones.
You create shared lists once and then apply them to campaigns as and when you need them.
It’s that easy.
3. High Cost Keyword Optimization
You either spent ages on keyword research or you just picked ‘relevant terms’ that you think should work.
You might think both options would put you in a decent enough position, and then you see your budget being devoured and the results don’t match the outgoing spend.
There are a number of reasons for this.
Taking a closer look at your keywords report will allow you to make smart decisions about where to focus your money, time and energy.
By pausing or lowering bids for high cost keywords, I’ve seen advertisers save thousands month after month, while maintaining or even increasing their conversion volume.
Finding high cost keyword concerns
Taking action to address high cost keywords is fairly simple.
We’ll use filters and sort key metrics to identify keywords that, although may seem logical for your business, are not performing well.
One of the main reasons many people fail to execute this optimization is that often the under-performing keyword seems relevant.
It should work.
But it doesn’t.
For example, if you’re promoting a Plastic Surgery service in Houston, then “plastic surgery houston” seems like such an obvious keyword, right?
However, these keywords are often highly competitive and so expensive.
Focusing on more specific long tail keywords like “breast reduction surgeons in houston” (or similar) is arguably the better place to start.
Below we’ll learn how to identify high cost keywords to either lower their bids, or pause them.
High spending keyword optimization steps:
Step 1: Head over to your keywords tab and make sure you select a longer date rage (at least 3 months should serve you well).
Step 2: Filter – example below – non-converting keywords with a cost higher than the value of your average profit per conversion. This should be your target CPA (cost per acquisition) or even better LTV (customer life-time value).
Step 3: You’re seeing a list of expensive keywords that haven’t converted yet. Choose a high spend keyword that seems logical for your business.
Step 4: Now filter again by the keyword using “keyword text” > is > and your keyword.
Step 5: Check the search terms associated to this keyword. Do they make sense? Are there negative terms you might want to add to your negatives list?
If all important search terms make sense, then consider lowering the keyword’s bid or pausing it.
Tip: When I see an ‘assumed good’ keyword failing to perform, it’s usually down to a competing offer, B2B/C cross-over or search intent issue. Before you completely pause a keyword that you feel has potential, Google it.
Look at competing adverts to see if:
- they are appropriate to you and your business and,
- if they’re offering something you’re not.
Can you match, improve or beat the competition? If not, you will struggle to make this keyword work for you.
Also, pay close attention to the organic results. Do they make sense for your business and advert?
Organic and paid positions will give you a good idea of the intent behind the keyword. Get on the wrong side of intent and you’ll just waste your ad budget.
Step 6: With that in mind, now head back to your Keywords, clear the filter, and simply sort by Cost/conversion (highest to lowest). You’ll see at the top of your report those keywords that are converting for you, but at the highest cost per conversions.
Repeat step 4 and 5 for these keywords.
Step 7: Try to identify why are cost per conversion is so high. Is your average CPC too high? Can your conversion rates be improved? Could your quality score be better in order to lower CPCs? Is the advert copy highly relevant to this search term?
If you don’t find negative keywords associated with these expensive keywords and you’re restricted by budget, then consider lowering the keyword bid or pausing your highest costing keywords.
You might want to allocate this budget on more cost-eﬀective keywords in the short-term.
Once you need to scale conversion volume, then you can approach the expensive terms once again.
To Pause or not to Pause?
If I think I can improve a keyword’s performance by raising it’s quality score, or it’s landing page conversion rate, what I’ll generally do is multiply my lifetime value per customer times the keyword’s conversion rate. The result will be the max CPC to break even.
What I’ll then do is add 20 – 30% to that number and that’s what I bid.
That will result in lower volume, but my resulting cost per conversion will be close to break even, for me then to optimize further.
The idea being, with enough keyword optimization work I’ll be able to profit eventually.
4. Stop Under-performing Ad Leaks
Your adverts are not directly keyword optimizations – but they are triggered by your keywords, so are very much part of the equation.
Poorly written ads can destroy your click-through and conversion rates.
As you might already know, CTR is a key component of quality score, and poor quality scores result in higher costs per click.
However, a common mistake is to only focus on CTR when optimizing ads.
You could easily trick users into clicking your ad with misleading ad copy, but that’s not only shady and unethical, it’s also self-defeating. Those clicks will most certainly add up costs without generating conversions for you.
Ad Testing Needn’t Be Rocket Science
First things first – always split test your ad copy.
To do so, you need to run more than one ad version in each ad group. If you’re only running one ad in each ad group, it’s going to be very difficult to identify ways to improve your ad copy.
Secondly, in your campaign settings, set the “Ad Rotation” to “Do not optimise: Rotate ads indefinitely”. This will allow you to continually split test ad copy, particularly important when using an AdWords optimization tool such as Adboozter.
Tip: once you’ve done extensive split tests, you can revert to “Optimise: Prefer best performing ads” to test the Google algorithm. I like to switch between both options to ensure ads are getting a fair chance and that I’m not ‘missing out’ on Google’s automation.
Thirdly, when writing ad copy, check out the spreadsheet I’ll share with you below. There you’ll find proven ways and a bunch of ideas to improve your ad copy.
Finally, follow the steps below to continually identify winning ads, learn from results and edit losing ads.
Find winning (and losing) adverts:
Step 1: Head over to your campaign Ad groups tab. Remember to choose a sufficient date range.
Step 2: Sort by clicks (highest to lowest) so we focus on the most active areas first.
Step 3: Right click each ad group and click to open in a new tab, so you can deal with them one at a time.
Step 4: Go to each tab and pause the ads in each ad group that are performing worse when comparing conversion rate, and then click-through-rate. Make sure you hit the minimum numbers (see table below) to avoid pausing an advert too soon.
Tip: Multiply your conversion rate by click-through rate to get your ‘CPI’ (conversions per impression). This metric can be added as a custom column and helps you factor both your CTR and CVR when picking a winning ad. As the Ads UI only reports two decimal places, I multiply by 100 to move the decimal place and improve the number’s readability.
When reviewing CPI – the higher the number, the better and therefore the winner.
Step 5: Create a new ad to replace the one you paused. You want to continuously test new headlines, descriptions, and URLs, based on the past winning ads you’ve identified.
Minimum impressions, clicks and conversions
Every business and Google Ads account is different.
Depending on who you ask, where you look and what you read, these numbers will differ.
However, below are a good rule of thumb for minimum numbers before calling a winner.
source: AdEvolver – find your winning google ads
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Finally, we look at targeting…
5. Check Your Targeting Segments
Google enables advertisers to target searchers by multiple criteria, however many people default their settings and never check back over them.
This is a costly mistake.
By taking a closer look at how targeting options such as device, location, network, times of the day or day of the week are working, often we’ll find big opportunities to make our campaigns significantly more cost-eﬀective.
Although they’re not the most visited reports in the Google Ads interface, it’s very easy to access this useful data.
We’ll learn step by step how to access these reports, digest the numbers and potentially take action when we find optimization opportunities.
Okay, let’s go:
Performance across devices can vary significantly.
Especially if you still don’t have a mobile friendly website. I hope that’s not the case for you, mobile search surpassed desktop search volumes years ago!
If you identify that ads served on mobile devices have registered no conversions or some conversions at high cost per conversion, then you have two options. Modify the bid down on mobile devices or disable them altogether until you resolve your website’s mobile performance.
Step 1: Navigate to the All Campaign view. Click “Segment” > devices.
Step 2: Now your campaign view is segmented by device performance. Look for a high conversion cost device and view that campaign.
Step 3: Under this campaign, click the Devices on the left hand menu. In here you can edit and adjust the bids on a per device basis whereby a -100% bid ‘disables’ that device from being targeted.
Tip: adjust your wasteful device bid down by the percentage it’s more expensive than your target. For example, if your target CPA is $25 and desktop devices are costing $30+ per conversion, then add a negative bid modifier of 25% to desktop.
Don’t be too quick to optimize devices.
Much like ad testing requires a certain amount of data to validate confidence, so to segments.
Ensure you’re looking at a long enough time frame with enough clicks to get a good picture of what’s happening.
Optimal Ad Schedules
For many businesses, not all hours of the day, or days of the week, produce results.
For this reason, we want to first identify the days of the week and/or the hours of the day that are costing us money, and are not delivering results.
Step 1: Again, under the “Reports” drop-down, we have Day of Week and Hour of Day. Choose one and view the report.
Tip: you can also view your Day and Hour segments under your campaign Ad Schedule settings view.
Step 2: Are there any days of the week or hours of the day with no conversions or high cost per conversion? If there are, head over to your Settings tab, and adjust your campaign schedule accordingly.
If you’re on a tight budget, restrict the hours your campaigns run. Alternatively, set bid adjustments down at certain times and/or days to reduce costs.
Now, let’s check if your account has any geographic leaks.
We’re looking for two things here:
a) Identify geographies that your business does not serve (which are wasting your ad budget).
b) Identify geographies that have no conversions despite significant clicks or have a cost per conversion that is too high.
Step 1: Go to the Reports drop-down > Predefined reports (Dimensions) > Locations > Geographic. The report will display statistics for the geographic locations of the prospects clicking on your ads.
Step 2: Sort by spend and find locations that aren’t working for you.
Add those wasteful locations as exclusions in your campaign’s location settings.
Alternatively, if for business reasons you want/need to be advertising in these locations, add those locations as targets and bid them down instead.
Important: to avoid wasted spend on locations that are not of interest to you, make sure you select “People in these locations” in your campaign location options, hidden away under your settings:
Make sure you’re not running both the search network and the display network on the same campaign.
It’s generally a bad idea to run on both networks on one campaign.
Seasoned advertisers know this, but if you’re just getting into Google Ads and you want to find clients on search, please make sure this is the type of campaign you’re running. The Display network is a very different beast and such be ran separately to Search campaigns.
With that said, now we need to take a closer look at the performance on Google Search vs Search Partners.
The reason we’re doing this is that for some niches, the Search Partners network can perform poorly. If your budget is tight you might want to opt-out of the partner network and allow that spend on Google search network only.
Step 1: Head back to your All campaigns view. Click “Segment” > Network (with search partners).
Step 2: Your campaigns are now segmented by network. It should be very quick to see if Partners do or don’t work for you. Expect much lower CTRs, but CPAs should be the same or less.
Step 3: If you find that the Search Partners network is not performing well for you, then under your campaign settings click “Networks” and un-tick “Include your ads on Google search partner sites”. Remember to hit save, and you’re done.
Make sure you add the tasks outlined in this article to your optimization routine and you’ll be on the path to slashing wasted spend in no time.
Let’s quickly recap:
Keyword Optimization Takeaways
- Make sure you continually follow steps 1, 3, 4 and 5 on a weekly basis.
- Make sure you use the negative keyword list for every new campaign.
- Negative keywords have huge power to skyrocket your performance.
- Make use of dimensions reports and segmenting options to identify money saving opportunities.
- Whenever you’re writing ads, make sure to reference the spreadsheet with killer copy ideas.
- Always be testing ad variations, but hit the minimums before calling a winner.
In closing, it’s important to say that this article didn’t cover landing page optimization.
That topic deserves a deep-dive on it’s own.
Because no matter how optimized your ad campaigns are, if your landing pages suck, so will your results.
The key principles to a good landing page are – make sure your website load fast, works flawlessly on a mobile device and the content is highly relevant to your ad copy and keyword.
Until I write that article, keep up your keyword optimization routines and squish that wasted spend.