Small Business PPC – 26 Mistakes That Cost You Money

by Jennifer Osborne June 9th, 2008 

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You've decided it's time to get online and what easier way than by starting a PPC campaign? Google has made it so simple that with a few clicks you are well on your way to Digital Marketing Success.

except

you seem to be spending a lot of money.

and

you're not really sure if it's making you money.

Here are the most common mistakes that I see when we take over a Small Business PPC Campaign:

1. Setting up your campaign as per Google's Default settings. I love Google. Their interface is awesome and their customer service rocks. But let's face it. The defaults are set up to maximize revenue for Google. Sometimes that means that you'll make a lot of money too. But sometimes it means that you will not be running as efficient a campaign as you could be.

2. Trying to Stretch your Budget too far. I don't care what kind of PPC genius you are, there is no way that you can stretch a $5.00 per day budget across North America.

I didn't make this up. I've someone try this. Twice.

Think about your cost per click and your budget. If you're averaging $1.00 per click then that gives you roughly 5 clicks per day. You need to make those clicks as targeted as possible.

3. Content Network. Google has the content network set up as a default that you have to opt out of. But the content network is not right for everyone. I've seen many situations where the content network has eaten a significant portion of the budget with a very low conversion rate. The Content Network can be hugely successful for some businesses. But it's not a "set and forget" type of campaign.

4. Geographical Targeting too Broad. There is a distinction between where you want to do business and where your target market is. Just because you could conceivably ship your widget anywhere in the world does not mean that a guy in Istanbul wants to buy it from your Iowa business.

By not focusing your PPC Budget to the geographical area where you're most likely to convert, you're wasting budget that could be used to increase your bids, broaden your keywords, keep you in the market longer, etc, etc.

5. Geographical Targeting too Narrow. This mistake is less common but I still see it a lot. There are many businesses that only sell within a small geographic area (less than 5 miles) . Think Local Businesses like Dry Cleaners, Tutors, Vets, etc. You definitely need to narrow down where your ads are served (as per #4 above) but Google isn't that precise. So if 1 mile is your geographic radius, try setting your geographical radius to 10 miles.

6. Launching with a very complex an account structure. The more complex your account the more difficult it will be to to determine what's working and what isn't. You can always build out ad groups and keyword lists after you have a better sense of what's working and what isn't.

7. Running your entire account under one campaign / one budget. Just as too complex is a problem too simple can be problematic too.

Geographical targeting is set at the campaign level so is your daily budget. You may have some high ROI products that you want to target broader geographically or High Performing keywords that should get more allocation of budget. Setting up more than one campaign will allow you to do this.

8. Not employing Day Parting. If you have a large budget and can afford to be in the market 24/7 then great! But for those that have to make budget decisions, Day Parting can be your best friend. If you're a B to B industry it's likely that you can maximize budget by only running ads 9-5 Monday to Friday.

Keep in mind that time of day targeting is set by your timezone so if you're on EST but California is a big market for you then you're going to have to take Time Zone differences into consideration.

9. Not enough ad groups. Ads are differentiated at the Ad Group level. By segmenting your keyword list into themed groups of keywords and then writing ads that specifically target those themes, you can have a huge impact on both your Click Through Rates (CTR) and Conversion Rates.

10. Not enough Ads in your Ad Groups. Writing targeted ads for each ad group can be a difficult task (it can be a little boring too). But think about it. Customers will click on the most compelling ad. If your ad is less compelling than your competitors, then you won't sell any widgets.

You know your customer and you know what sells…so why write more than one ad per ad group?

Because if you don't then you can't test different messaging. Trust me when I tell you that you will be surprised by the results and you will learn something new about your customers.

11. Using very Broad keywords. Broad keywords tend to be used by people early in the buying cycle. Think about the difference between "Vacation", "All Inclusive Vacation" and "Bermuda All Inclusive Vacation". Generally we find that people using very broad keyword queries are very early in the buying cycle, in the Learning Phase. As a result, conversion rates for these types of keywords are very low. Yet broad keywords tend to cost the most.

Narrower, more specific keywords tend to be used by people who know what they want and are closer to the Purchase Phase of the Buying Cycle.

I've seen Broad keywords eat 50% of a Small Business budget without any conversions. In this scenario, by not bidding on those expensive keywords the client reduced their spend by half while maintaining the same # of Conversions and Doubling their ROI.

12. Only utilizing Broad Match. Broad match is another default in Google. It allows Google to display your ads for variations, plurals, related words etc. If you are only using broad match, you may find that your ads are buying you low quality clicks.

13. Not using Negative Keywords. Negative keywords can help you to make those broad match keywords more effective by telling the search engines not to display your ads for irrelevant searches. Think about our vacation example above. A cruise line may wish to go after the keyword "cruise" but put a negative on "Tom" and "Penelope" i.e. not "Tom Cruise" or "Penelope Cruise".

14. Not Bidding on Your Brand Name. You may think that you don't need to bid on your name because your customers "should know" to type .com beside your name in their browser and go directly to your site.

Don't count on it. People will type www.companyname.com into their search query. You don't want to miss those clicks. Unless your company name is "Dell" or "Sony" chances are your branded terms will have a very low Cost per Click. They'll also be your highest converting keywords.

15. Not Bidding on Misspellings of your Brand Name. If branding is important to you then it's really going to hurt to bid on misspellings of your name. But remember that only the guy spelling it wrong is going to see that ad. They're not going to know any better anyway.

Consider this, if someone hears your ad on the radio you can't be sure that they'll know how to spell your company name. Bidding on misspellings increases the effectiveness of your offline advertising too.

16. Dynamic Insertion. Dynamic insertion puts the keyword that the searcher used into your ad title. If you do it well then dynamic insertion can increase your CTR significantly. For example, if someone does a search for "Kids Duvet covers" and they find your ad that says "kids duvet covers"; the average searcher is going to think "wow! these guys have exactly what I'm looking for" and click on your ad.

But a word of warning. Dynamic Insertion can go horribly wrong too. Make sure that you test your dynamic insertion ads with some of your own searches to see how they're showing up.

17. Maximum Bids. If you set your maximum bids too high you will pay more per click than you need to, especially if you're using broad match. If you are the only one bidding for a keyword, you should not be paying $1.00 per click for it. Try $0.10 an see what happens.

18. Bidding for the #1 Spot. There is little question that the number 1 spot does garner the most clicks. But Volume of Clicks is not your objective – it's sales. If people are comparison shopping you may find that a lower position, but still above the fold (like #3) will cost less and have a higher conversion rate . It's important to test the ROI on various positions.

19. Boring Ad Copy. Do a few keyword searches and most of the time you will find really boring ad copy. Your ad is what compels people to click. Make sure you give them a reason to click. Look at how your ad reads versus the competition. Would you click on it?

20. No Clear Call to Action. It's psychological. You need to tell people what you want them to do next. Numerous studies show that clear calls to action increase both CTR's and Conversion Rates.

21. Not testing small changes to the same ad. Writing a few different iterations of the same ad and measuring the results of those changes can have a huge impact on conversion rates. According to MSN, "Buy Now" will perform 171% better than "click here" in the education sector.

22. Testing too much at once. When you set up your PPC test you need to think of how many clicks you need to get before the test is statistically significant. If the 99th person clicks on an ad, you will have a 1% ctr. It is entirely possible that the 100th person could click your ad too, giving you a 2% ctr.

That's pretty straight forward. But now let's pretend that you want to do some multi-variant testing of 3 titles, with 3 first lines and 3 different second lines. That's 27 different tests. To even allow for 100 clicks to each of the tests that will take 2,700 clicks. If you are in a low volume high ROI industry then it's possible that this test could take months.

23. Sending all of your traffic to your home page. Home pages are typically not your highest converting page. If you're sending people to your homepage chances are they're going to have to search for what they're looking for. With every click you make your traffic take, you will lose people. Why not send them to what they told you they were looking for in the first place?

24. Ignoring Quality Score – Quality Score has a huge impact on your campaign's performance. An improved quality score can increase sales while reducing costs. It can take time to improve your quality score (i.e. by setting up individual landing pages) but it's usually well worth it.

25. Not finding a way to track conversions. If you don't do e-commerce on your site it can be difficult to figure out how to track conversions. But whether it's through a online inquiry form or a unique phone number, tracking conversions is critical.

Your highest CTR keywords may never convert. If you can't measure conversions, you could be wasting a ton of money.

26. Measuring Success through the wrong Metrics. Which would you rather have? A 10% CTR and a 2% Conversion Rate or a 5% CTR and a 3% Conversion Rate?

Let's do the math. Let's assume 1000 impressions per day at $1.00 per click and $50.00 value per conversion.

a) Scenario number one would cost us $100 and make us $100 for a break even ROI

b) Scenario number two would cost us $50 and make us $75 for a 50% ROI

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27 Responses to “Small Business PPC – 26 Mistakes That Cost You Money”

  1. Wii Boy says:

    I keep getting messages in my Google Analytics dashboard suggesting that I ought to use the data to run an Adsense campaign.

    Would there be any benefit from targetting keywords where I already rank first in Google? Does 1 + 1 = 2, or could it extend to equal 3?

  2. Hi Jennifer

    Brilliant post, it covers it all. Clients that need to save money so they will do it themselves. This is not something you can learn in a day, its a profession.

  3. Utah SEO says:

    Tip: turn off "automatic match" :)

  4. [...] Osborne at SearchEnginePeople wrote a good article on the 26 Mistakes That Cost You Money in a small business PPC campaign. The article is a little lengthy (26!) but some of the points she [...]

  5. forumistan says:

    Thank you jennifer, I always like your posts.

  6. Great list Jennifer!

    May I suggest #27: Not using a website analytics solution to understand how the traffic from different PPC keywords behaves once on the site.

  7. [...] 26 Mistakes That Cost You [Search Engine People] "Here are the most common mistakes that I see when we take over a Small Business PPC Campaign." [...]

  8. Okay, brain over load. This was great information but it will take some time to sink in 100% where I can do this without coming back every minute.

  9. Regarding #26. Setting a) can be desirable as well if it helps you to gain a userbase that you can, in the future, build upon. And it has a greater volume of searches that setting b).

  10. This is an exhaustive post, vitally important for someone like me. Thank you. I am saving this for posterity.

  11. Wii Boy – that's a great question! The studies usually say that your Conversion Rate will go up if you own more positions.

    But really there are so many variables involved in this calculation – I strongly recommend just testing it.

    Turn the PPC on for a week (or month – whatever it takes to get enough clicks to be statistically significant), measure results then turn it off for a week and measure the results.

    I'm currently working on a case study on this topic and will be blogging about the results in a few weeks.

  12. SEO Utah and Martin – thanks so much for the additional tips!

    I'd love to see if anyone else has any more tips I didn't think of :)

    Martin – I totally agree! I often see a big difference between the behaviour of traffic coming from SEO versus PPC.

  13. Tool Belts says:

    I thought the post was great, this is the kind of info you would get out of those adsense books that cost 25 bucks. So thank you.

  14. Nice post, Jennifer! I'm sure incredibily useful for many people.

    Do you think it's funny that CPM is the pricing model for all the new blog networks currently making noise? It may be 2.0 media, but it's the same old branding story.

  15. Paul Lee says:

    Very Good List. If most businesses just listened to some of these simple pointers they would save quite a bit.

  16. Eva White says:

    Amazing list. I didn't even realise that I was making some of these mistakes till I read this.

  17. Great post! I had to learn the hard way how to make my $$$'s work better. Wish I had read your post first.

  18. [...] Jennifer Osborne/Search Engine People: Small Business PPC – 26 Mistakes That Cost You Money [...]

  19. my nightmare using Adwords is..'click fraud'..esp from competitors..it really hurt….

  20. skyline says:

    excellent article!
    This should be the PPC Bible for the beginners!

  21. There is of course the argument whether you need to bid on brand terms if you clearly dominate the first page of the SERPs and no one else is bidding on your brand term – not sure where I sit on this one…

  22. [...] 26 Mistakes That Cost You [Search Engine People] "Here are the most common mistakes that I see when we take over a Small Business PPC Campaign." [...]

  23. [...] read all 26 common small business PPC mistakes from Jennifer Osborne, check out her article. And remember, if you’re overwhelmed by all that is involved to produce a successful PPC campaign [...]