by Garry Viner on June 12, 2018 | Google Ads

When looking over a new AdWords account, what are some of the warning signs that indicate wasted spend, or an account in poor health?

In this article, I list 6 things I look that tell me what is working and what isn’t. Some of these are relatively simple concepts, and some are a bit more advanced. Hopefully, you can apply these to your account too and notice an improvement in performance.

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arrow 1. Are location settings configured correctly?

There is nothing worse than wasting budget showing your ads to viewers in the wrong location. And an easy way to do that is to select the wrong Location Option. Let's say you want to show ads for your Australian hotel to international travelers from Singapore. Easy enough, right? You simply make this selection from Location settings.

location example

But wait. What is the recommended option? It's not "People in your targeted locations". It's "People in, or who show interest in, you targeted locations". So, you could be a user in Japan who has previously indicated an interest in Singapore and be served ads aimed at a Singapore market.

location targeting examples

Be careful to ensure that "People in your targeted locations" is your go-to setting for location, unless you specifically want to include users from out of area who might have an interest.

arrow 2. Is ad copy optimal?

To get the most out of your ad copy for search, you should have at least 3 extended text ads in each ad group. You can either let the system decide which one to prioritize based on the data it gathers or choose to show them all equally. Note - if you go with an automated bidding strategy, you can only let the system decide. Each ad should have relevant extensions set up to maximize the screen space taken by the ad and increase the likelihood of a click.

Your ad copy needs to be customized to be relevant to the keywords in each ad group. Often, I will see campaigns divided into ad groups which just regurgitate the same ad copy. This defeats the whole point of having separate ad groups. If you are lazy and want to write generic copy, be my guest, but why not save yourself more time and don't bother creating separate ad groups.

arrow 3. Are keywords competing against each other?

Let's say you have an ad group with the keywords

+best +insurance +sydney
"best insurance sydney"
[best insurance sydney]

Now, why would you do this when they overlap? A search on the exact match keyword will not only trigger ads on that keyword but also on the phrase keyword and the modified broad keyword. If someone searches for best insurance Sydney, these keywords will compete with each other.

The reason is that as you go down the list, each shows a greater level of search intent. A search using the term best insurance Sydney is quite clear in its intent, whereas the modified broad match could apply to a search like "what is the best way to sell insurance in Sydney?". On average you would expect a higher conversion rate on your exact keywords than your phrase keywords, and lower still on broad keywords.

This being the case, it's important that you apply the right tiering to your bids. In an example such as this

- don't give them all the same Max CPC.
- don't give the broad term a higher Max CPC than the phrase keyword
- don’t give the phrase keyword a higher Max CPC than the exact keyword.

Instead, make the exact keyword 5% higher than the phrase, and then this 5% more expensive than the broad. By doing this, you ensure that you are prepared to pay more for higher intent searches and less for longer-tailed searches.

Another problem that occurs when you don't do this correctly is knowing how to analyze your data. Let's say you set up your ad group with the above terms but apply the highest bid to the broadest term. That keyword will get the lion's share of the impressions, meaning you will not have enough data on the other keywords to know if they are any good or not. Only with the right tiering strategy, will you be able to look at your campaigns and know whether a particular keyword is worth persisting with.

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arrow 4. Are keywords still competing against each other?

Following the advice above is important, but there is another scenario that can arise as well. Let's say the same ad group also contains the keyword

+insurance +sydney

Now, what happens when someone types in a search query with the words best, insurance and Sydney in it? Not only will this match one or more of the keywords at the start of this section, but it will also match this one here. The right way to handle this is to do two things:

1. Move this term into a separate ad group, and
2. Add the negative keyword "best" to this ad group.

Using negatives across ad groups means you can create the right ‘funnel’ and ensure that each search term is matched with the right keyword – this should be applied whenever there is a chance that different keywords compete on the same search.

You’ll know if your funnelling is wrong if you look at the search terms report and add the Keyword column to the report. It’s important to look down the page and confirm that when a keyword is matched to a search term, it’s the intended keyword. If this is not happening, you will need to follow the steps above.

arrow 5. Are your quality scores good enough?

A key factor in how a keyword performs is its quality score. Higher quality score means lower cost per click, higher ad position, and greater expected CTR in general. Conversely, keywords with low quality score do not really get a chance to shine. In the same way that the above examples show how a keyword might not be allowed to reach its full potential due to competition, a keyword with a low-quality score will lead to fewer ad impressions for the same bid, and again that makes the decision whether to persist with it or pause it a difficult one.
If you see that you have campaigns with a large number of keywords with quality scores of 6 or lower, you have a problem on your hands and should review this in more detail by adding these columns to your keywords reports in AdWords.

quality score example

These are the three main factors in determining quality score for your keywords and depending on which of these factors is deficient, you could either
- Improve your landing page by adding copy that is more consistent with your ad copy, removing unnecessary clutter above the fold, considering dynamic keyword insertion.
- Review ad copy to ensure it is as engaging as possible and therefore ensuring your expected click through rate is high.
- Make sure that your ad copy is relevant to the particular search term that triggered the ad. This might mean the creation of further ad groups for a more targeted message.

arrow 6. Is automated bidding being used correctly?

Google wants us to automate as much as possible, and there is good reason to follow their guide where appropriate. But the key is to make sure you use the right strategy for your campaign, and to ensure that Google's AI has the right signals on which to base its decisions around how to optimize your bids.

A recommended strategy for new campaigns is to start with Manual CPC, switch over to Enhanced CPC once 5-10 conversions come in and then only after 100 or more conversions, move to full automation. And these conversions should be consistent, not lumpy. Ideally you would have 5+ conversions every day to pass the right signals to the AI. Similarly, if you want to pursue a maximize clicks strategy, don't set that straight away. Build up some click history, and then switch it over.

It's important that you only implement full automation on campaigns that are not limited by budget. For automation to work effectively, the AI needs budget to play with. So, either increase budget if possible, or reduce your targeting to get back under budget before switching to automated bidding.

And a word of advice - during the learning phase of your automated strategy, it is important not to make any dramatic changes. Small alterations such as pausing keywords and modifying ad copy are fine. Larger changes such as adding new keywords or applying a hefty bid adjustment will start the learning process again.

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