Eliminating Wasteful PPC Spend
Ideally, your AdWords budget should be buying you clicks that are likely to convert — that’s the point, right? If your campaigns are running effectively, your ads should show up when people are searching for what you have to offer. As a result, when they click on your ad, they should be taken to a landing page that meets their needs and convert. In concept, it sounds great. In practice, though, it rarely works out that smoothly.
Across thousands of AdWords accounts, we discovered that the median AdWords account wastes 76 percent of its budget on search terms that never convert. That means the average AdWords account is wasting 76 percent of its budget.
Fortunately, wasted ad spend is a very easy problem to fix. You control your keywords, which gives you control of your search terms. So, if a search term isn’t converting, you can stop paying for it!
After discovering how much ad spend is wasted, we made eliminating wasted ad spend a key part of how we manage our clients’ AdWords accounts. The results have been astonishing.
This advice shouldn't come as a revelation but it's something we see time and time again when onboarding clients. For small to medium-sized AdWords accounts, it's very easy to run analysis on your AdWords campaigns down to the keyword level. Once you have a statistically significant amount of data you can then start pruning high-spend keywords that don't convert while further optimizing the ones that do convert for an even better return on ad spend.
It's also worth including assisted revenue data in analyses like this to ensure that you're not pausing keywords that do drive some amount of meaningful conversions, but don't receive the "last click" credit prior to conversion. Utilizing last-click revenue data from Analytics plus assisted revenue data gives you the full look at what's working and what's not. Assisted revenue data is particularly helpful in assessing profitability of Remarketing campaigns, since they tend to drive a lot of impression touch points before the final conversion usually happens.
So what's the moral of the story? Leverage the data available to you and ensure that your AdWords account minimizes wasteful spend. Set reasonable thresholds for your conversion expectations. If certain keywords don't meet those expectations, either optimize your landing pages or pause them and move the spend to better converting keywords - or even test new keywords. Continual improvement will keep your return on ad spend moving in the right direction.