Are you wasting money with Google Ads?.. #59
- Adrian Dionisio - business737 owner
- Mar 13, 2022
- 5 min read
Updated: Apr 10, 2024
Google AdWords is a pay-per-click (PPC) service
PPC ads cost money only when someone clicks on your ad
You can - Measure the success of your ads
You can - Calculate the return on investment of ads
You can - Monitor the statistics in your account
You can - Refine your advertising campaigns for better performance.
How effective are your Google Ads? Is it worth the money? Should you be investing more? Should you stop? Are they living up to their potential? What should you change?
You may see some changes from your digital marketing initiatives, but how do you really know the precise impact? Here you will find out everything you need to know.
How to - Measure your digital marketing initiatives
Return on investment
Cost per click
Click through rates
Quality Score
Ad Strength
Landing Page experience
1. Return on investment (ROI)
ROI = Profit (sales revenue - ad costs) ÷ ad costs x 100%
Shows if your ads are making more money than you’re spending on them, and if they’re worth the time, effort, and budget you’re putting into them.
For example:
Tom spends £200 on ads for his business.
He makes £800 from sales via his ads.
Total revenue (£800) minus the cost of ads (£200) = £600 in profit.
(£800-£200) ÷ £200 x 100% = 300%
ROI was £300%.
For every £1 spent, he made an extra £3 in profit.
A positive ROI means your ads are generating profit. The higher your ROI percentage, the greater the profit.
2. Cost-per-click (CPC)
CPC = Total amount spent on your ads ÷ number of clicks
This measures how much you’re spending for each individual click on your ads.
For example:
Roger spends £500 on ads for his dental practice.
His ads drive 1000 clicks to his website.
500 ÷ 1000 = 0.5.
Cost per click is £0.5.
Google Ads Smart campaigns shows your CPC per ad in the campaign dashboard.
3. Click- through rate (CTR)
This you if your ads are appealing to the people who are seeing them.
CTR shows how often people click on your ad after seeing it. Ads with high CTRs should be retained, whereas ads with low CTRs should be removed or modified. Compare your click-through rate to these averages within your industry.
4. Quality Score
An estimate of how relevant your ads, keywords and landing page are to a person seeing your ad. It helps you understand how your ad quality compares to other advertisers.
It is measured on a scale between 1 and 10, and includes three different components:
expected click-through rate
ad relevance - how well your ad lines up with the searcher’s intent
landing page experience - how relevant and useful is your landing page
Google scores these as “below average,” “average,” and “above average” by comparing your ads to those of other advertisers who used similar keywords in the last 90 days.
The combination of these scores gives you a Quality Score of 1 through 10.
The higher the score, the better, and the lower your cost per click (CPC). Ads with high scores should be retained, whereas ads with low scores should be removed or modified.
You can check out your Quality Score at any time on Google Ads. Try to improve it by making changes to each of the three components.
5. Ad Strength
Focus on providing the right messages to your target audience. Ad strength ranges from “incomplete” to “excellent” and indicates the relevance, quality, and diversity of your ad combinations.
Having more relevant and unique content can help you get the right ad in front of your customers and improve your ad’s performance.
6. Landing Page Quality
You want the clicks you get to lead to a meaningful action
the person making a purchase,
taking a survey
signing up for something
or some other action.
The conversion rate Conversion Rate (CvR) shows how often someone's click on your ad resulted in a conversion.
Conversion rate = total conversions ÷ number of ad clicks
This is the percentage of people who complete a desired action on your landing page. Use the Conversion Tracking tool to measure your conversion rates.
The landing page experience score indicates your page’s relevance to visitors.
For a higher score, ensure your keywords are relevant to your ads, keyword list, and the user’s search. Provide original and useful content, and make the page easy to navigate.
Google offers the Quality Score tool down to the keyword level as well so you can find high-quality keywords to utilize in your ads and landing pages.
Optimise your ads - Quick List
Monitor your ads on a regular basis to see how they are performing
Make adjustments as needed
Confirm your keyword themes and search phrases
Check the locations where your ads are running
Check the times your ads are running
Liven up your ads with interesting copy or visuals
Make sure your website is up to date and easy to navigate
How to - Manage your ads
impressions,
clicks
conversions
keywords
Google Analytics
wasted spend
1. Impressions
Impressions (views) can decline because of keyword or budget reasons.
Update keyword pool to match the current relevant autofill data with Google Search.
Maybe increase your budget to compete with others advertising for the same keywords.
Use Auction Insights to look into your daily spend and check your competition’s bidding
2. Clicks
If click numbers fall, but your impressions remain constant, it could be that you need some new and compelling ad content.
While potential clients might see your ads, they aren’t interested enough to click on them. Try redesigning your ads. Test what works.
3. Conversions
Conversions are dependent on impressions and clicks. This is why all 3 must be evaluated together.
Less impressions = less clicks = less conversions.
Possible reasons for decline in conversions;
test both landing page functionality and tracking code implementations to make sure everything is in working order.
If conversions and clicks decrease, but impressions remain constant, you will want to revisit your clicks and try to revamp your ads by creating more compelling content.
If conversions, clicks, and impressions all decrease, you will want to revisit your impressions and see if the issue lies in your keywords or budget, explained above.
The Conversion Tracking tool is another free AdWords tool for monitoring account performance. With Conversion Tracking, you can see the effectiveness of your ad campaigns, as evidenced by which clicks convert into meaningful actions.
3. Keywords
Keywords describe your product or service. You use keywords to determine when and where your ad appears.
Regularly monitor your keywords' performance to determine which ones are meeting your goals for your ad campaigns. To do so, view your keyword performance for a specific time period, or customize your AdWords statistics to track keyword performance by match type. You can also run a keyword diagnosis to check your keyword Quality Score.
4. Google Analytics
Shows data from inside your AdWords account about visitors to your site –
how they found your site
what pages they're viewing
how long they're staying
You can get information about which ads, keywords and campaigns bring you business.
5. Wasted Spend
Wasted spend is a measure of how much money you’re wasting by paying for clicks that don’t convert. This eats away at your profit and ROI.
Reduce your wasted spend by using negative keywords. Negative keywords allow you to filter out traffic that is irrelevant to your business and unlikely to convert.
By creating a negative keyword, you’re preventing your ads from displaying for search queries that contain that keyword. Bidding on non-converting keywords is a waste of your marketing budget.
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