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What We Learned from Over 2,500 AdWords Audits

April 24, 2017

After auditing over 2,500 AdWords accounts, the team at Disruptive Advertising identify three factors that lead to PPC success and guide you through the process of making your online advertising efforts more productive.

Over the past three years, the team at Disruptive Advertising, one of the fastest-growing PPC agencies in the world, audited over 2,500 AdWords accounts to determine what works – and what does not – when it comes to AdWords. The data reveals one striking conclusion: AdWords is an easy place to waste a ton of money.

However, the good news is that AdWords doesn’t have to be a dark place where marketing budgets go to die. By analyzing our audit data, we discovered three keys to managing profitable AdWords accounts: setting up high-quality tracking, eliminating wasted ad spend, and regularly monitoring your account.

These three principles are fairly simple, but you’d be surprised by how few companies effectively apply them.

1. Set Up High-Quality Tracking

The foundation of every successful AdWords campaign is an in-depth system for tracking and analyzing conversions, or the amount of ad clicks that result in valuable customer activity.

You may think that creative ad copy, a killer keyword strategy, or a large budget are the biggest predictors of AdWords success, but ultimately, we find that regardless of other factors, when you don’t track your AdWords performance from click-to-close, campaigns are more likely to fail. In fact, HubSpot’s 2016 State of Inbound Report found that 97% of inbound marketing campaigns fail due to a lack of analytics tracking.

At first glance, this figure seems incredibly high, but if you think about it, it makes sense. If you fail to track campaign performance, it’s nearly impossible to understand what’s working and what's not. Without additional analysis, you may spend a lot of money on clicks that never convert.

Unfortunately, 42% of AdWords advertisers spend money on ineffective ads.

Now, you may think, “Okay, so 42% of AdWords advertisers are wasting their money. This means about 60% of AdWords advertisers are fine, right?”

Sadly, though, the remaining 58% of AdWords advertisers who track analytics still may not see the best results.

Only half of the advertisers who track conversions analyze every conversion, which pushes them into the “poor conversion tracking” category.

AdWords implementation pie chart showing no, poor, and adequate conversions.

This means that only 29% of AdWords advertisers use “adequate conversion tracking,” or track and analyze every conversion.

Is it any wonder that so many companies struggle to get good results from their AdWords campaigns?

Next Steps: Use Google Tag Manager to Track AdWords Traffic

Without processes in place to track and analyze your AdWords campaigns, you set yourself up for failure from the beginning. Thankfully, if you are among the 71% of advertisers with “adequate” or “poor” conversion tracking (or none at all) the good news is that effective conversion tracking is simple and free.

First, set up Google Tag Manager, a free service offered by Google that allows you to integrate specific copy into a URL to help you track where traffic is coming from. For example, if you include the tag utm_source=Google&utm_medium=cpc in your ad, you can check source referral traffic in Google Analytics.

To set up Google Tag Manager, follow the step-by-step guidance in the video, “Google Tag Manager Quick Setup Tutorial.”

After setting up Google Tag Manager, connect your Google Analytics and AdWords accounts.

Unfortunately, simply having analytics in place doesn’t guarantee you’ll have a high-performing AdWords account. You actually have to use the data.

2. Eliminate Wasted Ad Spend

On average, AdWords campaigns waste nearly three-quarters of a budget as a result of ill-chosen keywords and poorly researched search terms, according to our audit.

So, although analyzing AdWords analytics is an important first step, it doesn’t guarantee flawless ad performance. You have to use insights from the data you collect to guide your AdWords strategy.

After identifying the 29% of advertisers who fully track ad performance, we took a hard look at where they direct ad budget. Our analysis revealed a big problem: the average AdWords account wastes 76% of its budget.

Productive versus wasteful spending on AdWords via Disruptive Advertising

So, where is all the money going?

It’s being spent on the wrong keywords and search terms.

In a perfect AdWords world, you bid on a keyword that people use to express interest in what your business is selling, such as “women’s socks.”

Google search illustration of using AdWords

Someone types in a search query that triggers your ad, clicks on it, and converts.

In theory, the model seems pretty intuitive, but in reality, picking the right keywords can be a huge challenge. Since your ads don’t display for keywords you don’t select, there’s a temptation to bid on every keyword you can think of. Bidding on too many keywords, however, can backfire. The fact that someone who is interested in your product or offer might use a specific keyword doesn’t mean that everyone who uses that keyword is a potential client.

For example, one of our clients was bidding on the keyword “translate,” which gets 150 million searches per month. Since the client offers translation services, this may seem like a pretty good keyword. However, after spending $60,000 on that keyword, it still hadn’t produced a single sale.

Why? Because most people who use the word “translate” in a search aren’t looking for a translation service. They often are looking to have a word or phrase mechanically translated by Google or a similar service.

You see this sort of problem in almost every AdWords account. In fact, in the average account, only 6% of the keywords actually produce conversions. That’s right, just 6%.

What’s worse is that the other 94% of the keywords aren’t merely useless, they are actually worse than useless. They show ads for the wrong searches, so they get clicks that don’t help you, and ultimately lead to that wasted 76% of your budget.

What to Do: Find Wasted Ad Spend Using AdWords Account

Reducing wasted ad spend isn’t actually that difficult. It takes some time, but with the right approach, you can eliminate a lot of the clicks that cost you money.

Once you have about two or three months of quality conversion data in your AdWords account, open your account and click on:

  • “Keywords”
  • “Details”
  • “Search Terms ––> All”
  • “Filter”
  • “Create Filter”
  • Set new filter for search terms that have “Conversions < 1”
  • “Apply”

Screenshot illustrating how to use AdWords

This series of steps in AdWords pulls up a list of all the search terms in your account that have not produced any conversions over the last several months.

In our research, we found that if a search term hasn’t resulted in conversions in a three-month timeframe, it doesn’t have a very good chance of producing them in the future.

Simply put, either search terms convert, or they don’t.

You can put this knowledge to work by using your data to eliminate useless search terms and keywords. Following this approach, we uncovered some truly bizarre search terms that wasted thousands of dollars of ad spend.

The easiest way to get rid of money-sucking search terms is either to add the search term as a negative keyword or get rid of the keyword at the root of the problem entirely. It’s a fairly simple concept, but we frequently see massive improvements in account performance when we run this exercise with our clients.

3. Pay Attention to Your Account

The third key to managing a successful AdWords account is know...actually manage your account! This may seem fairly obvious, but it’s amazing just how few AdWords accounts receive regular attention.

Of the accounts we audited, we found that 72% did not receive attention in over a month. Larry Kim, Founder of WordStream, a paid search advertising tool, reports that a mere 10% of AdWords accounts are tweaked on a weekly basis. Is it any surprise that those accounts are wasting most of their budget?

What to Do: Determine Amount of Time You Should Spend Maintaining Account

You only have so much time to split among your various marketing channels. So, how much should you devote to your AdWords account?

If you’re spending at least $10,000 a month on AdWords, you should work on your account at least once a week.

For optimal performance, try to check your status and make any necessary changes at least three times a week.

When launching a new campaign, check on it more often: at least three times a day.

Accounts with lower ad spend don’t generate enough clicks and new data to warrant changes three times a week. However, you should still check your account at least every other week, preferably at least once a week.

Out-Perform Competitors With Better AdWords Management

Auditing over 2,500 AdWords accounts made clear what separates the great accounts from the budget black holes. Simply by implementing quality tracking, using that tracking to eliminate wasted ad spend, and giving your campaigns some regular TLC, you can outperform the vast majority of your competitors.

What did you think of this data? Did any of it surprise you? How do you improve the performance of your AdWords account? Share your thoughts by emailing Jake at [email protected].

Jacob Baadsgaard

Jacob is a passionate entrepreneur on a mission to help businesses achieve online marketing success. As the founder and CEO of Disruptive Advertising, Jacob has created an award-winning, world-class organization that has helped over 2,000 businesses grow using pay-per-click advertising and website optimization.