AdWords Rot

Adwords RotAn AdWords account that starts off making a worthwhile profit for the owner is often neglected and, within a year or two, is losing money. Potentially a lot of money. I have seen it happen again and again. If you are running a Google AdWords campaign, you have to at least monitor it. Better still, actively maintain it. Otherwise the rot will soon set in.

Here is an example of an AdWords campaign that was professionally set up and then left to coast, unmanaged. You can see that the cost per converted click (blue) rose, while the number of conversions (orange) fell a little. The average cost per conversion (trial) rose by a factor of 3 in just 4 years. What was once a profitable account was now wasting a lot of money. Ouch.

adwords conversion graph 2

The main reason for the rot is that Google are continually changing AdWords, and they may opt you in to new features without asking you. For example they automatically opted display advertisers into showing ads in free-to-play AppStore games. B2B business owners were paying thousands of dollars for clicks made by bored children in Flappy Bird and the like. I have seen accounts where thousands of dollars have been spent on these worthless clicks. And these were  small companies. Other reasons include:

  • Your display ads might start showing on a new website where they convert badly.
  • Poor targeting. Perhaps a new product, film or band has appeared with a name similar to your product.
  • Increased competition and bid price inflation can reduce a healthy amount of traffic to a trickle, reducing profitability.
  • Click fraud.

So you really need to keep an eye on your AdWords account. At an absolute minimum you should monitor the number of conversions and the cost per conversion and investigate any unfavourable changes. To keep your account in good shape over time you need to actively maintain it, e.g.:

  • Delete any keywords with poor click through rates (typically I delete keywords with a CTR of 0.5% or less after 200 or more impressions).
  • Delete any keywords with poor quality scores (typically I delete keywords with a QS of 3 or less).
  • Delete any keywords or ads with poor conversion rates.
  • Examine the dimensions>search terms report for negative keywords to add.

You can easily set up filters and get automated reports sent to you to make this fairly painless. These checks should be done perhaps once a week for a new or high budget campaign and perhaps once a month for a mature or low budget campaign. You can also make your life easier by setting up AdWords so that Google is doing most of the heavy lifting for you. For example you can use CPA bidding and you can set the ad rotation setting to Optimize for conversions: Show ads expected to provide more conversions.

A mature account that has been well set-up and has a budget of around $1k per month, probably only needs an hour a month to maintain. Alternatively, if you can’t spare an hour or two a month to manage your AdWords campaign, do yourself a favour and shut it down. Now.

3 thoughts on “AdWords Rot

  1. KPhillips

    This is the best information I’ve read today (I read a lot). I’m just beginning my campaign now & with the amount of projects I always have in front of me, I could have been in danger of doing exactly this. Your refresher post will hopefully stay in my mind long enough to remember to constantly monitor my Adwords once i start. Great post. Thank you

  2. Dave Collins

    Great advice Andy, A few thoughts though:

    – Low CTR isn’t always a bad sign, as ad texts may be used as a filter for the wrong sort of clicks.

    – I don’t really trust quality score, and instead prefer to judge by performance. Quality Score is often little more than Google’s “hey this is low, you should probably spend more” ickiness.

    – Conversion rates can be very misleading, depending on how they’re set up. We’re moving towards using engagement as a more meaningful metric than the standard options. There are simply too many disconnects in conventional tracking.

  3. Andy Brice Post author

    I would worry that low CTR keywords would be poisoning my overall ranking.

    I think downloads are a fairly good measure of engagement for my product (but not perfect, obviously). Also it allows me to do CPA bidding.

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