I’m a huge fan of advertising. We’ve used advertising to generate thousand of leads and millions in sales for our clients over the years.
Advertising is our preferred method of marketing, because you have total control over it. When it’s working, you put the money in and you get customers back.
Lots of people are afraid of advertising because they think it’s risky. They think it’s like gambling. But as Dean Jackson of ILoveMarketing.com points out, effective advertising is less like a slot machine and more like a vending machine that provides predictable, reliable results, day in and day out.
Our favorite ad outlet, by far, is Google AdWords. When small business owners ask us where they should be advertising, we always recommend AdWords as our #1 choice.
But before you put money in your AdWords account and turn on your ads, be forewarned…
As much as we love AdWords, it’s actually incredibly EASY to lose money!
And I want to make sure you avoid costly mistakes, too. That’s why I’m sharing my top money-losing mistakes to avoid…
Money Loser #1. Using The Wrong Settings
If you’re using the wrong settings, you’ll waste money… guaranteed.
Here’s an example of a setting to watch out for: keyword settings.
If you choose Broad keyword match instead of Exact or Phrase, you can waste lots of money on irrelevant clicks. Always start with Exact or Phrase match.
Here’s a checklist of 8 other settings to watch out for: Google Adwords CheckList
Money Loser #2. Using The Wrong Definition of Success
If you aren’t clear about how to measure success, you’re destined to fail. Here’s an example of what I’m talking about…
I’ve spoken to more than a few business owners about AdWords, and when I asked how their campaigns were going they said “Great!”
But when I asked, “How do you know?”
And they say, “I’m getting a lot of clicks.”
Listen up, this is critical…
Clicks are the WRONG definition of success. Clicks do NOT equal customers!
If you’re getting lots of clicks but no leads or sales, you’re losing money hand over fist. The only one profiting from that situation is Google.
Instead of aiming for clicks, your goal is to attract new paying customers, clients, and patients… and to earn a healthy return on investment (ROI) from your advertising.
Which leads us to money loser #3…
Money Loser #3. NOT Tracking
From what I’ve heard by speaking to hundreds of business owners over the past several years, the vast majority of people are NOT tracking the results of their advertising.
If you’re not tracking, you’re flying blind. You have no idea whether your ads are profitable or unprofitable… And most likely, you’re tossing money down the drain by the hundreds or thousands – each and every month!
…and that’s a shame, because setting up proper tracking isn’t hard.
(Here are some tips to get you started: How to Track Offline Sales)
You should always track your advertising. Even if your ads are generating an ROI, you should be tracking so you can improve your ROI.
Money Loser #4. Being Afraid of Click Fraud.
Imagine you’ve got a budget of $100/day and you’re bidding $4 per click… and one of your competitors comes along and clicks on your ad 25 times?
Now your budget is totally depleted – wasted – and you didn’t get any customers!
This is called click fraud. We get questions all the time about click fraud from business owners who are worried about losing their money to bogus clicks.
Yes, competitors can still click on your ads, but Google will detect this and you will not pay for these fraudulent clicks. Today, Google has sophisticated tools to identify which clicks are fraudulent and which are real. So in every account you’ll still see “invalid” clicks which are clicks Google determined were fraudulent — and you don’t pay for those clicks.
Don”t let concerns about click fraud stop you from using AdWords to grow your business.
Money Loser #5. Delegating Too Early.
Another big reason why people lose money with AdWords is that they give up control too early.
Let’s say you decide you want to advertise in AdWords. But you’re too busy to manage it yourself.
So, you hand it off to one of your employees, or you hire an online marketing company to do it for you…
If you delegate the management of your AdWords campaign before you fully understand how it works, you’re taking a big gamble…
We know you’re busy. But our recommendation is to learn how AdWords works before you hand it off. That way, you’ll know whether your campaign is being managed properly or not.
Otherwise, you’re really putting yourself at risk to lose lots of money.
From time to time, people come to us and ask us to audit their AdWords campaigns. And very often, we quickly identify major mistakes that are costing the company hundreds or even thousands of dollars per month.
You can easily avoid wasting money if you just invest a little time to understand how AdWords works.
If you’d like to get a quick primer on how Google AdWords really works, including the keys to creating a profitable ad campaign, grab a copy of our new free report: