All posts by Tom Bukevicius

3 Ways You Could be Unknowingly Wasting Ad Budget

Today’s ad platforms can have even the most experienced PPC marketers spending more than intended.

Campaign settings, rules and other factors change over time, which can have substantial impact on your campaigns. For example, starting October 4th, 2017 Google announced they could spend up to two times your daily budget. If you’d been sitting calm with $1,000/day budget, not wanting to spend a penny more, you could have been surprised.

There are many unpredictable reasons you can wind up with traffic or spend you didn’t plan for (and may not even know) — which is why it’s useful to consider intended vs. actual traffic.

Here’s what I mean:

  • Intended traffic: Is the traffic you planned on acquiring in your strategy as a result of the keywords, geographies, and networks you defined.
  • Actual traffic: Is traffic you actually get from your ad platforms, in spite of your strategy. Sometimes you’ll see traffic that was not intended due to campaign settings, mistakes or platform changes.

In short, the gap between intended and actual traffic is wasted ad budget. But, fortunately, you can identify and fix this to save money.

are you wasting ad budget?
Wasted budget is like wasting pizza, only worse. (via Giphy)

In this post I’ll cover three ways you might be wasting your PPC spend and how to ensure you’re both aware, and can turn things around with quick fixes.

Mistake 1. Accidentally spending on bad search terms

Wasted budget on the wrong keywords is fairly common. As Melissa Mackey of B2B agency Gyro sees often:

“advertisers [bid] on keywords that they shouldn’t be bidding on. For example, novice advertisers selling shoes try to bid on ‘shoes.’ Overly broad keywords eat up budget and do not perform well for the advertiser.”

But the bigger problem here is that some marketers believe that keywords and search terms are the same thing. The terms are commonly used interchangeably, but they’re very different. Here’s how I define each:

  • What’s a search term? This is the exact word or phrase a person uses on the search engine to find what they were looking for (how buyers search). See the “Search Term” column in the example below.
  • What is a keyword? This is the word you use to target search terms on paid search platforms (how marketers target buyers). See the “Keyword” column in the example below.

If you misunderstand or accidentally misapply keyword match types (broad, broad modified, phrase, exact match), you can have a gap between search terms and keywords causing you to spend unknowingly.

For example, a client in the continued medical education space was targeting medical professionals who need Pediatric Advanced Life Support (PALS) certification. Here’s what happened:

  • Intended traffic in this case included people searching ‘Pediatric Advanced Life Support’ or ‘PALS certification’.
  • Actual traffic ended up including Pediatric Advanced Life Support certification and PALS certification. However, because of poor keyword match types (and the acronym in this case), the company ended up with traffic from search terms such as “penpals online,” “free kids online pen pals,” and “senior pen pals.”

See the Search Terms Report as an example:

Click above to see larger image of how intended medical certification traffic turned into pen pals traffic (via SCUBE Marketing).

Traffic that attracted anyone looking for “pen pals” wasn’t intended, leading to wasted spend. The root cause of this was confusion over the difference between search terms, keywords, and their match types.

Action item: Take a closer look at search terms

To avoid this scenario yourself, run a Search Term report discussed above to identify which search terms (triggered by your keywords) are not relevant.

Then exclude irrelevant terms with negative keywords at ad group, campaign, or account level. From there, use keyword match types to better control your exclusions. For example:

  • Exact Match Negative to exclude just the exact term that was irrelevant. Example: -[penpals online]
  • Phrase Match Negative to exclude an irrelevant phrase pattern you noticed in your search terms. Example: -“penpals online”, which will exclude ‘California penpals online’, ‘penpals online’, and ‘penpals online for seniors’.
  • Broad Match Negative to exclude search terms containing irrelevant words. Example: -penpals, which will automatically exclude all search terms with penpals.

Once you’ve eliminated any obvious waste, reevaluate your keyword match type strategy. If you skip this step, you will continue to trigger lots of irrelevant search terms.

Your match types will range from exact match (with a close correlation), to broad match (with far correlation) between your keywords and search terms.

Ideally, break your broad match keywords into more specific keywords with broad match modified, phrase or exact match types. They will give you more control and trigger search terms you intend to target.

Mistake 2. Wasting spend on unintended locations

Similar to keyword match types, incorrect location settings in AdWords can trigger ads in locations you don’t want to serve and amount to wasted budget.

When we look at the reality of the situation, your location settings can trigger three types of geographies:

  1. Physical location. Your ads appear to people physically located in your target geography. This is the option we usually expect when selecting locations to target, in that it’s very direct. This is our intended traffic insofar as geography.
  2. Location of interest. Your ads appear to people searching for (or indicating interest in) your targeted location. With this option, physical location doesn’t matter. As long as people have your target location in their search terms, the ad is triggered. This can result in out-of-country traffic that appears to be relevant, but perhaps isn’t for a myriad of reasons. (i.e. Perhaps you don’t ship to a given location, for example and your ads would thereby be irrelevant to those in that area).
  3. Both. This setting combines both targeting options. Your ads appear to people who are physically located in your target geography, or are searching for (or indicating interest in) your targeted location. This is the broadest option.

To see how you can waste spend this way, here’s an example of how unintended location targeting affected a client in the industrial machinery space:

With respect to intended traffic, this client wanted to target people physically located in the United States. However, they ended up with traffic from Nigeria, India, Canada, United Kingdom, Mexico, and the Philippines. Unfortunately, the client doesn’t do business internationally, so their budget was spent on targeting the wrong locations.

In this case, the client kept the default AdWords setting of ‘Both’, which triggered the traffic from physical location and location of interest, causing the unintended international traffic. Fairly simple mistake to make.

Action item: Stop Wasted Ad Budget on Unintended Locations

Get a list of locations where your ads have triggered by running the User Locations Report in AdWords. See an example below with multiple unintended international locations for the same client I described above.

Incorrect Location Settings causing wasted ad budget
Click above to see a larger, clearer image.(via SCUBE Marketing)

Once identified, exclude irrelevant locations from within your campaign settings. After your locations have been excluded they will appear next to targeted locations. See an example below.

Exclude Locations In Campaign Settings To Stop Wasting Ad Budget
Exclude locations in campaign settings to stop wasting ad budget

Once you have identified any unintended locations, check how these locations were triggered by reviewing a Geographic Report. In our example, the ‘location of interest’ setting caused the traffic the client did not want.

Location of Interest Targeting Setting
Click above to see a larger, clearer image.

To avoid this, simply change the setting to ‘people in my targeted location’:

Mistake 3. Using the default regarding unintended networks

Network targeting has similar quirks as location targeting. The devil is in the details and wasted budget often lies in the settings. AdWords has different campaign types. If you’re not careful, and you stick with the default settings, your targeting can (and probably will) be off.

To clarify, here’s an example from the intended vs. actual traffic angle for a new client we audited recently.

They’d wanted to target people using Google Search on, but ended up with traffic from the Search Network, Search Partners Network, and Display Network. Obviously this was unintended, and they didn’t know. As it turns out, they didn’t execute their targeting properly and their campaign settings had a default setting: ‘Search Network with Display Select’.

Click above to see larger image of default campaign network settings you may want to avoid (via SCUBE Marketing).

This resulted in the client targeting three unintended networks in one campaign. Prepared only for the Search, they didn’t have targeting and ads for Display, and ended up with automatic placements from irrelevant websites. Overall, 53% of their PPC budget went to the Search Partners Network and Display, but the traffic had zero conversions, and was a waste.

Click above to see larger image of Surprise Traffic Coming From Search Partners and Google Display Network (via SCUBE Marketing).
Action item: Stop Wasted Ad Budget on Unintended Networks.

How can you check if you are unintentionally targeting networks without your knowledge?

Segment your campaigns by network. See an example below. Once segmented, you can figure out the right settings, and can plan the action items for further optimization.

If you see traffic from unintended networks, simply change your network settings from the default.

Don’t drain your ad budget

Because of fine details, even the best marketers can fall into traps and overspend unintentionally. Paid campaigns can be difficult beasts to manage, and a campaign that hasn’t been optimized to eliminate waste is a ship with leaks in it, destined to sink.

Take a good look at your data for the above, scrub it against what you’ve learned here today, and see what you can save.

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3 Ways You Could be Unknowingly Wasting Ad Budget

Seeing Diminishing Returns in AdWords? Here Are 5 Advanced Optimization Tactics

Being a modern-day Paid Media Manager can make you feel a bit like Sisyphus.

Your VP of Marketing has charged you with rolling a boulder uphill (continuously optimizing your AdWords campaigns even when you’ve reached your quarterly objectives).

Image via Shutterstock.

This becomes especially painful when you’re getting diminishing returns out of your optimization efforts. There are many tactics to choose from, but many of them may be a waste of time and may leave you with minimal impact.

When the going gets tough, you need to get creative and find cost/time-effective ways to keep optimizing your campaigns as granularly as possible.

Here are five advanced strategies for getting big optimization wins in AdWords.

1. Reach people who ignored you due to your budget

Before investing time into extensive research, ask yourself:

Am I getting the full value out of my existing target market?

Chances are, you’re losing market share for your target keywords (and locations) due to budget caps.

To grow your campaigns, reduce the market share loss due to budget caps.

Reality check: Are you losing market share due to budget?

Check the “Search Lost IS (Budget)” metric in Google AdWords. You’ll find it in the Competitive Metrics category.

So what’s your number? 2%, 12% or 32%?

Here’s an example: our client’s account was losing up to 32% of market share due to budget by week four. That means they were pacing stronger at the beginning of the month, but needed to slow down towards the end of the month to meet the monthly budget goal.

Search lost due to budget chart (via SCUBE Marketing)

Once you know how much market share you lost at account level, you can dig deeper into the campaign level data. You’ll know exactly which campaigns contribute to the loss. Those gems are your growth opportunities.

Search lost due to budget by campaign (via SCUBE Marketing)

Action plan: Increase daily budgets… with performance in mind

One path you can take here is to increase the daily budgets based on performance. Use three performance buckets to make decisions:

  • Great. Your CPL is healthy. Get more of it. Increase budgets.
  • Poor. Your CPL is high. You’ll spread the poor performance wider by increasing the budget. You won’t make it up by volume. Reduce budgets so you can allocate more spend to the performing campaigns.
  • Borderline. Your CPL needs work. Work on reducing the wasted ad spend and start raising your daily budgets — slowly.

Shared Budgets will help you manage your campaign budgets easier. Here’s how to prioritize your campaigns and group them into Shared Budgets:

  1. Sort campaigns by Conversions and CPL.
  2. Group campaigns into Shared Budgets based on performance. We like to have four groups — B1 through B4 — based on importance, where B1 has no budget constraints, and B4 has the most budget constraints.
  3. Calculate required monthly spend. Sum each campaign category by cost for the month. Make sure all campaigns fit in your monthly budget.
  4. Allocate respectively. Use maximum required budget for B1 first, then B2, B3, B4.

Here’s something else you can do to grow your AdWords campaign.

2. Improve market share lost due to low Ad Rank

Another great way to grow your AdWords campaigns is to reduce lost market share due to low Ad Rank. If you’re not familiar, I’ll give you a quick, practical overview.

Ad Rank is like MTV Top 40 (and if you remember Scatman, I will give you a high five). Instead of rank being based on sales of audiocassettes, vinyl and other formats across a seven day period, Ad Rank is based on three variables for each search query:

  • Your bid
  • Your Quality Score
  • Your ad extensions
Scatman (via Giphy)

I will skip ad extensions, as most serious advertisers use them already (and I hope you’re one of them).

The two variables that matter are your bids and your Quality Score. If they stay constant in your account, but your competitors keep increasing theirs, your Ad Rank relative to competitors decreases and your market share (impression share) is lost due to Ad Rank increases.

Reality check: Are you losing market share due to Ad Rank?

Just as you did with your budget, check the “Search Lost IS (Rank)” metric in Google AdWords. It’s in the Competitive Metrics category.

Search lost due to Ad Rank metric (via SCUBE Marketing)

Once again, find your number for both the account and campaign levels. Once you know, you’ll know what direction to take things in.

Your growth menu is limited to two options:

  • Bid increase
  • Quality Score improvement

Action plan: Increase your bids

If your Quality Score is high already (attempts at improving it may result in diminishing returns or a negative impact on your conversion rate), and your CPLs are healthy, you have no other choice but to increase the bids. Your CPL will go up, but you can gain a lot more conversions.

Action plan: Improve your Quality Score

If your Quality Score is low, work on improving it. You can affect your Quality Score with three factors (directly from Google):

  • Your ad’s expected click-through rate: This is based, in part, on your ad’s historical clicks and impressions. You can think of this as an estimate as to how well your ads might perform, after factoring in things like extensions, and other various bells and whistles that impact performance.
  • Your ad’s relevance to the search: How relevant your ad text is to what a person searches for.
  • The quality of your landing page: How relevant and user-friendly is your landing page?

Recently, Google has improved its Quality Score reporting. You can see the makeup of your score using historical data. This helps you to evaluate how the previous account changes affected your score.

New Quality Score reporting (via SCUBE Marketing)

The problem: you can’t take your Quality Score to the bank. It’s not a KPI.

Given that, if your conversion rates are healthy, don’t sacrifice your results for the sake of Quality Score. Yes, you may improve your Quality Score a bit, but if your conversion rate tanks, cheap clicks won’t matter.

If your conversion rates are not healthy, you can either:

  • Write more relevant ads (with focus on improving CTR and CVR)
  • Improve your landing page (with focus on improving CVR). I recommend using Unbounce to create highly relevant landing pages focused on conversions. You can improve their relevancy with Dynamic Text Replacement, responsive design and fast loading times.

Once you’re satisfied with the conversion rate, go back to increasing the bids. On to the next move you can make to strengthen your campaigns.

3. Expand into a new buyer stage

Buyers have different stages in their journey. You need to understand the buying stages for your customers, understand their differences and finally adapt your marketing to them.

To illustrate the difference between them, I’ll use an example that revolves around unicorns. Let’s say you kept your unicorn enclosed in a submarine for a few years. Your unicorn was exposed to asbestos and got a sick with mesothelioma. You decided to sue the owner of the submarine and you started looking for a lawyer. A good one. Someone like Saul Goodman.

Saul Goodman can sue anyone (via YouTube)

You may be going through any one of three different stages:

  • Awareness – early in the process. Looking for ideas or trying to identify the problem. Far from making a decision. Example: looking for symptoms or treatment options.
  • Consideration – considering potential options. Not ready to make a decision. Example: looking to find out how the settlement amount for getting your poor unicorn sick.
  • Decision – ready to make a decision. Looking for a solution. Example: looking for a lawyer.

In fact, we used this approach for real law firms. One law firm had their eyes set on the strategy behind the decision stage. We identified opportunities to expand into the consideration and awareness stages. New stages helped to double the leads. Let me visualize it:

Double your leads by expanding into new buyer’s journey stages (via SCUBE Marketing)

Reality check: Are your campaigns assigned to specific buyer stages?

Go through your campaigns and map them to the appropriate buyer stages. If you’re not deliberate on your buyer stages, your conversion rate may be affected due to poor matching between the offer and the intent of the buyer stage.

Think of the traffic temperature concept covered by Molly Pittman and Johnathan Dane. Then, review your offer and make sure it matches the intent of the buyer stage.

Offers matched to traffic temperature, with cold leads (awareness) on the left and warm leads (decision stage) on the right. (via KlientBoost)

Action plan: Identify gaps and expand into new buyer stages

Once you map your campaigns to specific buyer stages, identify the opportunities to expand.

Expand into the stages that you haven’t covered. For example, if you’re focusing on the decision and consideration stages, expand into the awareness stage.

Once you identify the missing stage(s), do the following:

  1. Perform keyword research for the new campaigns within the missing stage.
  2. Develop offers that represent the intent of the buyer stage.
  3. Create the ads and landing pages that reflect the offer.

Let’s take a look at the next step you can take toward growing your AdWords campaigns.

4. Expand into new locations

Locations may be an overlooked avenue in which to expand.

Let’s say you own a unicorn breeding business and are targeting locations within a certain radius of your office. You assume you should be targeting people living near your business.

Unicorn breeding farm (via Giphy)

Think about it again. You may be missing your opportunity. Take these two facts into consideration:

If you don’t have these in your targeted locations, you’re missing out. For example, one client, selling custom kitchen cabinets, provided us with a recommended list of locations with a wealthy population. We ran ads at those locations and the traction was small. We didn’t use the whole budget.

Then, we identified a new set of geographies — where the target audience may be working — and tested again. The leads went up by 155% in month 1 (after the change) and 30% more in month 2.

Location targeting (via SCUBE Marketing)

Reality check: Are you targeting all possible locations?

Check your target locations. Are you targeting based on where people live, commute and work?

If you’re missing any location categories, identify them.

Action plan: Expand into new location categories

Once you identified the gaps, do your research and expand. You can expand based on the following scenarios:

  1. Commuter locations. People within the existing market commuting.
  2. Work locations for existing market. People within the existing market at work.
  3. New locations for new market. New locations to reach a new audience, provided your business can operate in them.

5. Expand your offer

New customer acquisition matters — a lot. It doesn’t matter if you acquire them selling the core product or a loss leader. (If you’re not familiar with the loss leader concept, here is the rundown. A loss leader is a product that opens doors for new client acquisition.)

Once you get a customer, your goal is to increase their lifetime value. I’ve covered customer lifetime value extensively in another article.

Let’s take Starbucks, for example. There’s a reason why they’re one of the unicorns of the industry. Their marketing isn’t focused on selling a five-dollar Unicorn Frappuccino (they actually exist), it’s about acquiring a loyal customer who will generate $14,099 over the lifetime.

Starbucks Unicorn Frappuccino (via Starbucks)

Reality check: Do you have a unique offer you could sell to acquire new customers?

Consider cell phone companies. Their core product is not the cell phone. It’s the subscription service. See what happens when I search for “cell phones” — I get ads from the cell phone companies.

Cell Phone Offers (via Google)

What does that mean?

These companies expanded their offers to include additional products that serve as new entry points for new customers and growth.

My question to you is this — do you have a new offer you can use to acquire new customers?

Action plan: Expand your offers

Executing this is easier than it seems. Follow these four steps to expand your offer:

  1. Research your customers to understand their expectations. I’ve covered four research methods in a separate article.
  2. Create your offer tied to the core product first.
  3. Perform keyword research representing new offer.
  4. Create the ads and landing pages that reflect the offer.

Final thoughts

You made it! Now, you have five different ways to grow your AdWords campaigns. Remember, start with the analysis first, and take action second.

Once launched, don’t forget to evaluate often, and revise. Your analysis isn’t always right. You need to try, try, and try again — until you find success.

What effective ways have you found to grow your AdWords campaigns? Share in the comments below.

See more here:

Seeing Diminishing Returns in AdWords? Here Are 5 Advanced Optimization Tactics