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AdWords can be an incredibly rewarding marketing strategy that can take your business to new heights, but it can be unforgiving if you’re not proactively preventing extremely easy to make mistakes.

AdWords can be very expensive if not handled correctly, and the goal is to manage your campaigns to get the highest possible return on investment (ROI). Each small mistake chips away at your return and most of the mistakes on this list can cause substantial damage.

There’s often a very fine line between a poorly managed campaign and a well-managed campaign, and the line is drawn by your understanding and execution. Poorly managed campaigns are often much more expensive than the revenue they bring in. Businesses that use AdWords as one of their primary marketing channels are exposed to a huge amount of risk if they aren’t especially careful.

This post goes through the 10 biggest AdWords mistakes you can make with Google AdWords. View the following mistakes within the scope of your business and try to compare them to real-world situations where your business is making or could be making the exact same mistakes.

#1 Mammoth Mistake: Not Understanding Your Customer Lifetime Value (CLV)

One of the biggest mistakes that you can make happens before you even launch a single campaign. Inadequate customer and market research is a poor foundation for any marketing strategy and, so, many business owners build their marketing channels on faulty ground.

One of the most important metrics you need to understand before touching AdWords is your Customer LifeTime Value (CLV). Essentially, how much revenue is each new customer expected to bring into your business over the course of their lifetime?

There’s no reason you should be guessing on this metric. Use a Customer LifeTime Value calculator and nail down the perfect number.

Your Customer LifeTime Value indicates how much you should be willing to spend to recruit customers for the long term. This allows you to bid on strategic keywords and adjust your campaigns to target the right potential customers, instead of playing guessing games and merely hoping they stick around.

If you’re not thinking long term, you’re going to end up spending way more money not retaining customers. One of the biggest reasons startups go out of business is because their Customer Acquisition Cost (CAC) is higher than their Customer Lifetime Value.

For example, if you spend $500 to acquire a new customer, you should have the funnel and infrastructure in place to make more than $500 off that one customer (preferably in less than a year).

#2 Mammoth Mistake: Not Knowing Your Competition

A huge component of AdWords is not only refining your campaigns to get more customers but also beating out your competition.

Information and data, above all else, should guide your big-picture AdWords strategy. You need to know everything about who your competition is, what keywords they’re targeting, and what the landing pages look like to which they’re sending customers.

Approach the search as if you were a customer yourself. Do a Google search—what ads pop up? Which are you most likely to click on? Why? Compare your competitors’ AdWords strategies to yours. What are they doing better, and how can you fix that? What are you doing better that you should optimize further?

  1. First, look at your competitors’ ad copy. How can yours be better?
  2. Then look at their landing pages. What are the designs like? How do they control visitors’ attention? How engaging is their content?
  3. Finally, test your new ad copy and changes in landing pages to see if you get any conversion rate improvements.

#3 Mammoth Mistake: Not Knowing Your Conversion Rates and Profit Margins

Understanding your Conversion Rates and Profit Margins is one of the most fundamental components of running a business, yet many AdWords users aren’t fully utilizing the information.

By tracking your conversions and tracking your profit margins, you are able to understand how much you are getting out of each campaign.

Conversions for inquiries or sales can be set up in the “Tools and Analysis” menu option with the “add new conversion.” With this information, you can see how well your campaigns are performing down to the individual conversion. This will help you to justify the amount you are spending per bid, and what specific type of consumer you are targeting.

#4 Mammoth Mistake: Using the Wrong Keyword Matches

A frequent mistake people make is not using the right keyword match type. You’re able to run your ads in any of the following keyword matches, and it’s on you to decide which one. Picking the wrong one could lead to suboptimal results.

  1. Broad Match: When you use a broad match keyword, your ads show up regardless of the order of the words in the search phrase. So, if you run a broad match campaign for cheap Nike socks, your ads will show up for search terms including cheap Nike socks, socks Nike cheap, cheap socks Nike, etc. While these can be highly effective for certain industries, they fail to capture buyer intent. Some search phrases may not be as buy-ready as others, yet you are still paying for them equally.
  2. Phrase Match: When you use a target phrase match keyword, your ads show up in the exact order you set them. So, if you only want your ads to show up for “cheap Nike socks,” you will have to use the phrase match keyword. The individual words have to be in that certain order, but other keywords may show up as well. For example, you might see your ads pop up for “cheap Nike socks deal” as well.
  3. Exact Match: Exact match keywords are as specific as it gets. This means your ads will only show up when someone searches the exact keyword you intended. So, your “cheap Nike socks” ads will only show up when the search query is “cheap Nike socks.”

So, how does this become a huge mistake? Not using the correct match type can cause you to overspend or under-target and leave a lot of value on the table. Exact match keywords tend to have a much higher conversion rate and a lower search volume. Broad match, on the other hand, has a lower conversion rate and a higher search volume. Be strategic in your decision and get the highest ROI from your campaign.

#5 Mammoth Mistake: Failing to Group Keywords Correctly

This mistake is usually made due to a small oversight or lack of understanding, and it could be huge.

AdWords allows you to create campaign ad groups and manage different types of campaigns and, within each campaign, you can separate your ads and keywords into different ad groups. When you segment your ads into groups based around similar keyword types, you’re able to deliver specific ads for a similar intent.

The more specific your ad is, the more likely it will convert with that certain group. For example, let’s look at Nike.

As a clothing brand, Nike’s got a ton of different products. They sell shoes, socks, shirts, and exercise equipment. If they didn’t break up their ads into different ad groups, then it would limit Nike to only using an ad headline like “Buy Nike Products” instead of an ad tailored to what shoppers are looking for, such as “Buy Nike Socks” or “Buy Nike Golf Clubs.”

Don’t limit yourself to only one ad headline copy. Customize your ads to be a good fit for the search terms for higher conversions. The more segmented your ads and keywords, the better you will be able to optimize and manage them.

#6 Mammoth Mistake: Failing to Use Negative Keywords

Merchants frequently make the mistake of not using negative keywords and spending money to target keywords that bring in absolutely zero return.

Negative keywords allow you to exclude any keywords that aren’t a good match for your product and service. Remember, AdWords is not only about targeting the right keywords, but refining your targets and getting rid of dud keywords that will drain your budget.

Negative keywords give AdWords users more control over their budget, but, unfortunately, many Google advertisers don’t take advantage of this feature. If you’ve been having trouble with converting traffic into customers, and you don’t have a negative keyword list, this is one of the first things you should put together and execute.

For example, let’s say you run a luxury clothing website. Every single one of your keywords should be targeting someone from whom you can expect to earn money back. However, if your ads are showing up for shoppers who are instantly sticker-shocked by your high-end prices, you won’t receive any return on your investment, yet you’re still paying for the click. In this case, you would want to create a negative keyword list with keywords such as “discount, cheap, sale” and any other keyword that would attract poorly converting traffic.

The logic behind negative keywords is simple:

  1. You save money by not paying for clicks that won’t convert. By reducing your costs, you boost your ROI.
  2. Your ads will receive better quality scores and positions and earn higher click-through rates.

#7 Mammoth Mistake: Not Prioritizing the Data

The vast majority of AdWords users understand the importance of making data-based decisions, but we also tend to be pretty stubborn even when the numbers are glaring in our face.

This often happens with ad copy and landing page content. Even if you absolutely love your ad copy and landing page content, if it’s not doing its job of converting, steps must be taken to figure out why. If there aren’t any problems with your ad targeting and you’re not making any of the mistakes on this list, it might be time to change your copy.

While it is good to stray from the normal route and experiment with new and creative possibilities, testing shouldn’t be done with a majority of your budget. You should constantly be testing new iterations of your copy and landing pages, and, thankfully, doing so is fairly easy in AdWords.

For example, simply create two different headline variations, or two same headlines with different body copy, or the same exact copy with different calls to action. The data will objectively guide you to the best end result.

Focus on only testing one single variable at a time until you come up with the perfect ads and landing pages. Savvy merchants are regularly sifting through their campaign results and data, and they have set up several Key Performance Indicators (KPIs) to help them track what’s working and what isn’t.

The best results often come in the form of one or a combination of the following: highest click-through rate, lowest cost per acquisition (CPA), and the highest conversion rate. The beautiful thing about data is that it tells you whether you are headed in the right direction with every iteration you make.

#8 Mammoth Mistake: Not Directing Traffic to a Relevant Product Page or Category Page

Failing to send interested traffic to the correct page is an easy and silly way to lose a potential customer.

If someone is searching for a specific product such as “Men’s Sperry Boat Shoes” or “Casual Shoes,” they’re expecting to be sent to either a product page containing the product in the ad or a category page containing a variety of the search product.

Sending this type of traffic to your home page is very troublesome for your conversion rate. Even if your homepage is absolutely gorgeous, keywords that capture product or category intent must be sent to the appropriate page to maximize the potential to make a sale. Aim for a direct match for what they exactly searched, and your conversion rate will thank you.

#9 Mammoth Mistake: Sending Traffic to a Lackluster Landing Page

For ad campaigns that require the use of a landing page, it’s extremely important to focus on your landing page’s performance.

Merchants often get tripped up with their landing pages because they have to monitor two different fronts: How well are my ads performing? and How well is my landing page doing at converting? It can be relatively difficult to decipher whether the ad or the landing page is the culprit for a low conversion rate, but, by benchmarking your landing page to industry standards, you will help to make this task easier.

A few of the elements that cannot be missed on a landing page include:

  • Crystal clear call to action: What do you want visitors to do?
  • Attention-grabbing headline: You want your headline to reflect the visitor’s intent.
  • Mobile-friendly: This means your landing page must not only be mobile responsive but written in a way that is conducive to being read on mobile.
  • Succinct, natural copy: It’s important you nail down the perfect voice and speak to your visitors in a way that is natural to them.

#10 Mammoth Mistake: Not Taking Advantage of the Arsenal of Tools at Your Disposal

Running a successful AdWords campaign often means juggling a lot of moving parts. It’s not as if tracking your competition, keyword trend fluctuations, changes in consumer purchasing behavior, and conversion rate optimization weren’t enough—now, add in the necessity to constantly be monitoring your ad performance.

AdWords can be a full-time job and can be incredibly stressful. Thankfully, there is a wide variety of tools that can make executing a successful AdWords campaign much easier.

For example, SEMRush helps advertisers find new keywords to add to their campaigns, as well as get information about which keywords their competitors are using. This approach is incredibly data-centric and can eliminate hours spent conducting this research yourself. SEMRush can cost between $99 to $399 a month, based on the features selected.

Another great example is Funnel.io, which makes collecting data from multiple sources much easier and decreases the likelihood of human error. Since it’s automated, it helps merchants get a complete overall picture of their campaign performance without having to spend multiple hours a week tracking it manually. Funnel.io costs at least $199 per month.

There are also some free tools that can equip merchants with the data necessary to prevent any of the above mistakes:

  1. Google Trends: This tool can be used to scope out product seasonality and trends over a specific time period. Additionally, it can be used to discover product trends or provide information to predict new ones.
  2. Google Analytics: This is an absolute must-have for any website. Google Analytics’ robust data is used to determine how effective PPC campaigns are and can be synched up to AdWords for a full-picture analysis.
  3. Canva: This tool helps create graphics for Google display campaigns, newsletters, and social media. Canva has a wide selection of pre-designed templates that can fit into any purpose your business may have.

Final Thoughts

Like anything in life, in the course of your AdWords campaign, you are bound to make a mistake. Making mistakes isn’t the end of the world, but making mistakes due to negligence is something many business owners beat themselves up about. This list is designed to put any potential mistakes on your radar.

However, running a mistake-free AdWords campaign doesn’t guarantee success. Your return on investment is ultimately determined by your ability to recognize patterns and trends, to monitor and execute your campaigns successfully, and to iterate in the search of perfection.