Dr. Dave Chaffey looks at the most common mistakes marketing managers make with AdWords and offers his advice on how to avoid them.

In my article last month I wrote about common weaknesses in the way that businesses manage their SEO. Thanks if you shared the article – it seemed that the mistakes I mentioned resonated with many! This time around I’m going to look at AdWords.

You’ll see I’ll talk about a lot of specific AdWords concepts since often the mistakes arise from lack of awareness of the way that AdWords works and the many targeting and creative features available. So often these aren’t mistakes, rather it’s lack of awareness of what’s possible which means that marketers aren’t asking their agencies or internal specialists the right questions. I hope this ‘Top 10 Mistakes’ will prompt you to ask some new questions for those you aren’t so aware of.

1 Not Understanding Quality Score

In my training workshops where I cover both SEO and AdWords, I’ll ask in the AdWords sessions what QS is short for, to see from a show of hands how well people know their AdWords terminology. If marketers aren’t actually using AdWords they won’t typically know about this at all and may even believe that the ranking of ads on a page is just based on amount bid. As you’ll likely know, quality score (QS) is all about the relevance of the ads and landing pages. Google wants to reward advertisers who generate the most clicks for them so click-through rate is a key component of quality score.

Understanding the concept of quality score, including the factors that determine Ad Rank, is the essential starting point to getting ROI from AdWords since it’s essential to compete and you can use reports of quality score to optimise. Therefore, ask your agency to review this across the account in an audit.

At one point Google published a formula for Quality Score. Although it doesn’t do this any more, you can read the summary here.

Alternatively, watch Hal Varian, Google’s Chief Economist, explaining the dependency of different quality factors in the ad auction.

2 Inadequate Keyword Research

In common with SEO, a structured approach to understanding consumer search behaviour is an essential foundation to AdWords. In both cases you have to choose the battles you think you can win – so selecting the most relevant keywords to target is essential. Creating long lists of potential keywords to target is easy, the art in AdWords is grouping the keywords in such a way that you can target particular consumer behaviours at different points in their buyer journey. There are many alternatives for grouping keywords, so the value in using an experienced AdWords practitioner is that you can target relevant terms. Active search marketers will know that the Google Keyword Planner helps group these behaviours.

Brand vs non-brand keyword management issues are particularly important for AdWords, since it’s typically the case that brand terms related to a company name have a lower cost per click (CPC) and Return-on-investment (ROI) such that there is a tendency for potential over-investment in brand-terms. Yet here we’re investing in targeting people that already know about a company and for which the company ranks highly in the organic results. I’m not saying that brand-bidding on keywords itself is a mistake, since analysis often shows its value, however, you have to ensure you invest sufficient in attracting people starting their search by discovering what’s out there. For example, you might start a search for improved eye sight with generic terms like ‘laser eye treatment or surgery’, then drill-down into individual techniques and locations like ‘Lasik in Birmingham’ (long tail phrases) and then brand terms such as ‘Optimax Birmingham’.

Given that an individual will typically make a series of searches on the ‘path-to-purchase’, it’s a massive mistake to NOT use attribution (i.e. only review last click) to review whether you are getting return from different keywords, since generic terms, although more costly, will give incremental awareness in a way that generic terms won’t.

Here’s another retail example of keyword search behaviour that shows the interplay.

3 Sub-optimal Account Structure for Targeting

The next challenge follows on from keyword research… Once you have defined your target keywords, you have to structure them in the best way in terms of the Campaign-AdGroup tree structure. The challenge is that there are so many options for structuring an account for different types of business, yet if you get this wrong, or at least sub-optimal, you won’t be able to target effectively or to allocate budget and bidding levels where it will give you the biggest returns.

In most accounts we see the 80:20 rule in action, so 20% of keywords have the highest ad spend, traffic and conversions and within these the 80:20 rule operates too! So it’s important to be able to allocate budget easily to these high performing keywords.

This is where impression share is important. Another mistake is to not analyse how this varies by budget and rank across different parts of the campaign. Definitely a question to ask your agency and review regularly across the account.

4 Not Modelling ROI to Support Bidding Strategy

You’ll know that the competition within AdWords is fierce, leading to high cost-per-click, so it’s essential to model the return on investment through creating models that show you will hit your targets for allowable cost-per-acquisition costs. When you see the maximum CPCs in many sectors, you do wonder whether the top-bidders are aware of their level of ROI, or lack of it… Testing target positions and finding the sweet spot for bidding to gain ROI are the more advanced techniques that need to be taken advantage of here, either using independent bid management tools or the auto-bidding features Google has improved. You can also review Google’s Bid Simulators.

Bidding also relates back to keyword selection strategy too, since the terms you invest in should depend on your success with SEO for particular keywords. If you perform well in SEO for ‘laser eye treatment’ compared to another high volume generic term like ‘laser eye surgery’, which doesn’t rank in the organic results, then it will often be more profitable to put more budget into the latter term.

5 Poor Optimisation of Match Types

Another complexity that marketers who don’t use AdWords may not be aware of is the range of match types there are. The match type determines when the ad is displayed. If irrelevant ads are displayed for a specific keyword this is going to hit the click-through rate, which will in turn hit the quality score. Therefore, match types are important to display the most relevant ad for a keyword. Explaining match types is outside the scope of this article, but this diagram from Google explains the main ones:

Using match types smartly has always been a tension between using broad match types which give volume but risk relevance and using phrase or exact match, which deliver more specific ads, but lower volumes. In both cases it’s also important to manage negative keywords – adding irrelevant keywords based on search query reports – so that the ad is only displayed when relevant.

Over reliance on the Broad match modifier is a common problem when auditing accounts, according to Zoe Bates, our director of paid search at ClickThrough.

6 Not Optimising Mobile Separately

With the rise in volume of mobile search we have now passed the tipping point in many consumer categories where there are more searches on smartphones than desktop. This presents a challenge, particularly for transactional businesses, since typically conversion rates for mobile are naturally lower than desktop. So, particularly if budgets are severely limited, it may improve profitability to use mobile bid adjustments, which decrease the amount you’re prepared to pay per click.

As with all AdWords recommendations, a more detailed analysis and testing – particularly of cross-device behaviour – will be essential to confirm this. Although new smartphone visits may well be less likely to convert than new desktop visits you have to use cross-device tracking to consider the whole customer journey. Although visitors may not convert on a first smartphone session they may later return on a desktop visit and then convert.

7 Not Using or Optimising Relevant Ad Extensions

Ad extensions are a way of enhancing the content of your ad copy to increase your share of the results page and CTR.

Ad extensions can be found in their own tab within the AdWords interface. Just as ads in higher positions usually have a higher CPC, ads with extensions also often have a higher CPC due to competition for prominence on the search results page. However, you can often get more clicks for less money by using ad extensions, as opposed to increasing your position. Your CPC for ads with extensions is calculated the same way as for ads without extensions – you pay just enough to beat the Ad Rank of the advertiser with the next highest Ad Rank or the minimum Ad Rank necessary to appear in that position.

This example of an ad extension for a retailer shows some common ad extensions used by retailers, including Seller rating extensions and the highlighted dynamic structured snippets and callout extensions, giving further detail about the business, in this case, the brand it offers and the value proposition above.

Although some types of ratings won’t be relevant for all businesses, others, such as the Sitelinks at the bottom of this ad, will be. Location Extensions are also important for retailers and other businesses with a physical presence. This requires Google MyBusiness to be set up for business locations. Of course retailers also have the option of Google Shopping Images for products (not an extension), but these are so widely used and known amongst retailers that they are not typically a mistake of omission!

There are other ad extensions too which may be relevant in other sectors, e.g. B2B companies can have Call extensions.

The full details of the set up of each ad extension can be found within the AdWords Help Centre.

8 Not Taking the GDN / Remarketing Seriously

GDN is the Google Display Network. I’ve always felt it’s one of Google’s hidden secrets – it accounts for around a quarter of Google’s revenue, yet this is based on clicks on ads outside of the search results, typically banners or text ads on partner sites. From an AdWords advertiser’s point-of-view it is included in AdWords campaigns by default. This is important since it’s inevitable that click-through rates on GDN will be lower and, since intent is lower on partner sites, it’s likely that conversion rates are lower too. So with limited budget, it’s often worth switching off entirely, or at least testing and optimising. Optimising often involves focusing on the best performing placements on relevant sites and switching off others.

AdWords Remarketing is a different concept, which Google has only offered in the past few years, but it is also based on the Google Display Network. Remarketing is Google’s term for Ad Retargeting, which is serving reminder ads about a brand after a visit to a site or a section of a site showing high intent. So, if someone has visited a laser eye treatment site, the site owner could serve an ad reminding them about the brand, perhaps tailored by location.

Remarketing ads are traditionally on other sites, but with the relatively recent Remarketing Lists for Search Ads ‘reminder ads’ can also be placed on Google within the search results. As Google explains, there are two basic strategies for using remarketing lists with search ads:

  • You can optimise bids for your existing keywords for visitors on your remarketing lists. For example, you can increase your bid by 25% for those who previously visited your website in the last 30 days. Or, you could show a different ad to site visitors who have placed items in a shopping basket but have not purchased them.
  • You can bid on keywords that you don’t normally bid on, just for people who have recently visited your site or who have converted on your site in the past. This can help you increase your sales. For example, you could bid on more broad keywords only for people who have previously purchased from your site.

9 Not Re-Testing Optimisation, Particularly on Ad Creatives and Landing Pages

With the complexity of the many techniques we have discussed, it’s inevitable that advertisers won’t get them to be effective first time and they may not deliver ROI, since Adwords bids can be so expensive. So, it’s essential to develop a test > learn > refine mindset to get the most or even any return from AdWords. Yet this takes planning, structure and time. If AdWords doesn’t get enough attention then this optimisation simply won’t happen and you’ll be burning budget. This is where consultants and agencies who are skilled in optimisation can help – although they vary in their structure, processes and competences, so you do need to check the optimisations they are performing carefully.

Optimisation can also be over-simplistic if it is based on the ‘last-click’ model of reviewing success, which is the default. Attribution and cross-device analysis is needed to ensure incremental leads and sales from AdWords are maximised, as we have discussed earlier in the article.

Ad creative and landing pages are two specific areas of mistakes that would warrant their own steps if we had space. Suffice to say that with both, a setup and forget approach is sub-optimal! Good agencies will continually run tests of new ideas on how ad copy and extensions will get the best engagement and returns. Likewise, landing pages or different destination page templates, e.g. category pages and product pages, should be optimised through AB testing. Again, process and tools are required to optimise.

10 Not Trialing and Implementing New AdWords Features

Our final mistake relates to the rate of change in the AdWords platform. Google is continuously releasing new features for its advertisers to target and engage consumers with. Now Google is a public company it seems the rate of new features has increased as Google seeks to show stakeholders that it is improving its monetisation. We’ve mentioned some of the most recent features in this article, such as a mobile bid adjustment update, Remarketing Lists for search ads, extension updates and changes to match types. Change on AdWords is relentless, but if you can keep on top of it, the rewards are there too if your competitors don’t.

I hope you have found my take on the top 10 mistakes interesting. I’d be interested to know if there are any mistakes you see that I’ve missed or should flag more prominently.

Make sure your AdWords account is fully optimised to drive the best results for your campaign by conducting an AdWords Audit. Download our free eBook The Best Practice Guide to AdWords Audits and discover our 22-step audit process.

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About the author:

An acknowledged expert on digital marketing, Dave was recognised in 2004 by the Chartered Institute of Marketing as one of “50 marketing ‘gurus’ worldwide who have shaped the future of Marketing“. Dave is also author of five best-selling books including Internet Marketing: Strategy, Implementation and Practice; and eMarketing eXcellence.