Search advertising, for many years now, has been one of the best ways to bring businesses of any size quality leads and sales. Statistics indicate that businesses utilising Google Ads make an average of $2 for every $1 they spend on the platform.

The clear benefits of search advertising is that it is highly targeted, you can set your own budget and it’s a low risk investment.

So, why do businesses keep losing money with Google Ads?

Here's how:

1. Google's default settings

Default settings on Google Ads is a key area that causes issues for businesses. The platform provides a very easy process to get people started, however easy does not necessarily mean best.

With Google’s “Smart Ads”, your search campaign will be up and running within minutes and sending traffic to your site.

While this might work for some businesses, the majority will find that default settings end up spending your budget very quickly without a great result. Remember, Google is in the business of making money and their advertising revenue is 70.9% of their total earnings, so their default settings are designed to be broad and volume focused. This is a recipe for high cost and low quality traffic. It’s also one of the reasons many businesses drop out after only a few months of using the platform.

Adjusting targeting, bidding and budgets are just some of the things you can do to get more targeted traffic at the right budget. 

2. It is a robust platform, with plenty of levers and options.

A lack of understanding and knowledge of the Google Ads platform ties in with the first point about taking the easy options provided in the Google default settings and fast tracking your campaign to spend more without much result.

I have seen businesses waste hundreds, even thousands of dollars by not being aware of best advertising practices and additional facets to ensure a high performing campaign.

New users to the platform tend to jump into poor campaign structure, having too many or too few search terms, using broad keywords and poor ad extensions. There is also a reliance on automated tools that are great. However, knowing when and how to use them takes time and practice.

A common mistake a lot of users make is sending all ads to the same page (often, the homepage). There are many benefits for sending your ad links to pages that better reflect the advertising message. This will help quality score and ad rank as it addresses Google’s relevancy test. It’s also sound marketing practice to allow your user to get straight to the information on a specific landing page without navigating from the home page, or run the risk of increasing bounce rate and wasting your ad click.

3. More on landing pages

Google Ads give you a lot more control on what and where you can direct users to on your website. Dedicated landing pages allow you to create a streamlined experience for your user from the moment they run their search query, to clicking on the ad and arriving on your landing page. They are seeing the same consistent messaging and receiving the answers straight away without having to navigate from the home page.

The most effective landing pages focus on reiterating what was in the ad, focusing on a single call to action that encourages the searcher to convert.

There should be little distraction and the user shouldn't have to deal with any confusing navigational issues to find what they clicked on the ad for. 

4. Monitoring and optimising

We have established that turning on Google Ads and using the default settings can be detrimental to your budget and the performance of your campaign. Setting it up and leaving the campaign to run for itself is an even bigger mistake that will lead to great dissatisfaction with the service.

Monitoring your keywords should be one of the first things you do to find the terms you are chasing that cost you a lot with little to no result. Or, you might find terms that are getting clicks to your landing page but not converting. By not addressing this, and having an effective negative keyword strategy, you are going to go through your budget very quickly.

Staying focused on refining your keywords is an important practice to follow in order to reduce any loss of budget.

Keywords are only one aspect of monitoring. There are hundreds of ways to review and improve campaign performance. 

5. Insufficient tracking

Another reason businesses lose money on Google Ads is because they're failing to track their leads substantially.

Tracking conversions is an integral part of figuring out whether your paid campaigns  are successful or not, as well as which sales and leads are coming from which campaigns.

Any sort of advertising is an investment and in order to calculate whether you're achieving a return or calculating profits, you have to be able to measure the results of your investment.

If you want to be successful with Google Ads, you have to be able to analyse results in order to make any necessary adjustments, change strategies when needed and record the outcomes.

While all these risks do exist and are all very easy traps to fall into, it's not all bad news when working with Google Ads. Having worked with the platform for 11 years, I have made all the mistakes and learnt from them. I have been able to work with large budgets across a range of industries across B2b and ecommerce. I have long term clients that continue to grow their results and improve on their ROI and marketing goals.

With constant review and optimising, we can quickly turn a poor performing campaign into one that can provide both short and long term results.

So, what are the benefits of Google Ads?

  • It gives you more control over your ad budget and how, when and where your ads will be displayed.

  • Faster, more instantaneous results compared to SEO.

  • Campaigns can be designed for brand awareness, lead generation and sales.

  • Re-market your ads to visitors who've seen them but didn't follow through with an initial purchase.

  • Compiles a large source of data and insight about your performance and audiences.

  • In some instances, you can outperform your competitors who aren't involved in pay-per-click advertising.

Overall, Google Ads is a worthwhile investment if you're looking to generate more leads to your business. Combined with traditional marketing methods and organic SEO, you can maximise your search engine exposure over your competitors.

Written By

Glenn Cooper

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