Why Many Businesses LOSE Money With AdWords

/Why Many Businesses LOSE Money With AdWords

Google AdWords search advertising can be one of the best investments for your business for 2 very good reasons:

  1. Highly targeted – Your ad only appears when people are searching for
    your product or service in Google.  So you get in front of your ideal customer
    at the exact time she’s looking to buy.
  2. Low risk – Since you only pay per click, search advertising can be much less risky than other forms of advertising like media buying.  You’re essentially paying for performance.  If you’re ad does not resonate and no one clicks on it, then you don’t pay a penny.  You only pay if your ad attracts prospects, and they click on your ads to go check out your website.

So it’s no wonder why businesses flock to Google AdWords to see if they can make it work. But unfortunately, too many businesses end up LOSING money because they go about advertising with AdWords all wrong.

And part of it is Google’s fault…

Reason #1

You see, one the best things about AdWords is you can get started in a matter of minutes.   Google has made it so brain dead simple to get started that all you need to do is click a few buttons, enter your credit card info, and voilà! Your ads will start to show to your prospects and hopefully you’ll get qualified traffic.

So AdWords is one of the fastest ways to start generating new customers for your business.  However, that is precisely the reason why so many businesses lose money! Unfortunately Google’s default settings almost guarantee you’ll spend MORE money than you need to because that’s what Google wants.  Google is in business to make money from advertisers so of course it’s in their best interest to encourage businesses to spend more.

So that’s the first reason.  Many businesses lose money with AdWords simply because they don’t realize some of the default settings (like advertising in both the Search and Display network in the same campaign) almost guarantee you’ll lose money.

 

Reason #2

The second reason is because many businesses don’t fully understand how successful AdWords campaigns really work.  A lot of people think AdWords success is all about quality scores, bidding tips and tricks, and automation tools.  But success with AdWords really comes down to advertising fundamentals and best practices.

I’ve audited countless Google AdWords accounts where businesses were wasting hundreds and even thousands of dollars because they weren’t following direct response advertising best practices. And usually it’s not specific to AdWords… it’s much more basic than that.

By far the #1 mistake I see over and over again is when businesses send their advertising traffic to their homepage.  One of the most basic principles of advertising is to precisely match your message to your market/prospect.  Your homepage explains everything you do and addresses every single type of prospect that may visit your website.  So by nature, your homepage will never perfectly match your prospect who just typed in a very specific question into Google.

 

Reason #3

The third reason why many businesses lose money with AdWords is because they do not have a checklist.  When I audit AdWords campaigns I go through a very thorough checklist and I’ve never seen an account that was not wasting money because of a very simple account setting.  Here are some basic things to check before turning on your ads:

  • Are you targeting the Search and Display network in the same campaign? This is a mistake because the search network is completely different than the display network, and usually requires different ads and landing pages.  So make sure you’re only targeting one network within a single campaign.
  • Are you sending traffic from your ads to a laser targeted landing page or are you using your homepage?  Per advertising best practices, you never want to use your homepage.  Make sure you precisely match your message to your market.
  • Do you have conversion tracking so you can calculate your return on investment for every campaign, ad group, and keyword in your account?  This brings us to Reason #4…

 

Reason #4

And finally, the fourth reason why most businesses lose money with AdWords is because they do not track leads and sales from their campaigns.  I am always shocked when customers tell me they have no way to measure the effectiveness of their AdWords campaigns.  Or they are measuring the wrong numbers!

For example, a private client I worked with a year ago was only focused on the cost of his ad campaign and he had no way to measure the revenue.  Each keyword was judged solely by the cost.  He would pause high cost keywords and only focus on low cost keywords despite the fact he had no idea which keywords were driving sales!

Think about that for a minute.  Advertising is not an expense where the goal is to drive down costs.  Advertising is an investment.  And the only way to optimize an investment is to accurately calculate the return.  Would you ever compare two investment portfolios purely on how much was invested in each of them?  Obviously not…  You would look at the return and compare the profits!  And that’s how you must treat your AdWords campaign if you want to be successful.

I hope by reading these 4 big AdWords mistakes you can avoid them altogether and start reaping the benefits of Google’s very large market.  When set up correctly, AdWords can generate leads and sales like a vending machine!

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