Google’s AdWords provides almost unbeatable return on investment (ROI) when used properly. Coupled with Google Analytics (GA), it provides marketing feedback to finely hone your campaigns.

However, there are many cases of people incorrectly setting up Adwords campaigns, relying on default settings, meaning that it could be providing a poor ROI.

Below is a non-exhaustive list of the most common reasons why people are wasting money on AdWords:

1. You’re not Using Google Analytics (GA)
   GA allows you to monitor which campaigns, ads & keywords  are attracting the better performing visitors to your site.
2. Bidding Too Broad
   AdWords default match is ‘broad’. This means that if your keyword is ‘red tennis shoes’, AdWords may be matching your keywords against ‘tennis bags’ and ‘designer shoes’ which is a waste of revenue. Try to use phrase or exact match where possible. If you really must use broad match, use the + modifier to narrow the search.
3. You’re not Using Negative Keywords
   E.g. Unless you’re in the discount end of the market, you’ll need to exclude searches containing ‘cheap’, ‘budget’ or ‘discount’ and so on.
4. Poor Quality Score
   Your ad position is based on a) your bid and b) its quality score. A poor quality score can mean you having to pay 400% more. Quality score is calculated by Google based on a number of factors such as quality and relevance.
5. You’re not using conversion trackingThis allows you to monitor what happens after a visitor clicks on one of your ads – whether they purchase, contact or leave.
6. You’re not Separating the Search & Display Networks
   Whilst the display network used to provide poor ROI in the past, it just needs to be treated differently to get the best out of it.
7. You’re not Sending visitors to a dedicated landing page and instead sending them to your home page (and hoping they will find what they want)
   .. which results in a high bounce rate
8. You’re not using Mobile Bid Modifiers
   If you’re business does noticeably better (or worse) on mobile devices, then you’ll need to modify how much you’re prepared to bid on mobile devices
9. You’re not using Location Targeting
   Unless your business is global, you want to advertise in your target regions – whether that be the whole of the UK, the South East or Greater London instead of wasting money advertising in areas you cannot service.

Find out more about managed AdWords services here.

References & External Links:

1. Google Analytics (GA) http://www.google.com/analytics/
2. Negative Keywords https://support.google.com/adwords/answer/105671?hl=en-GB
3. Conversion tracking https://support.google.com/adwords/answer/1722054?hl=en-GB
4. Separating the Search & Display Networks https://support.google.com/adwords/answer/3025907?hl=en-GB
5. Understanding landing page experience https://support.google.com/adwords/answer/2404197?hl=en-GB
6. Making it easier to manage bid adjustments in enhanced campaigns http://adwords.blogspot.co.uk/2013/05/manage-bid-adjustments-more-easily.html
7. Complete Guide to AdWords Geotargeting & Local PPC http://www.wordstream.com/blog/ws/2013/11/13/adwords-geotargeting-local-ppc-guide