You're Likely Spending Too Much on Google Ads: Search Edition

At Pennies to Bills, we deal with Google on a daily basis, focusing on Technical SEO and Advertising. While Google Search, Advertising, and Analytics can be confusing to navigate, it’s an important piece for a business’s awareness, growth, and ROI measurement. In this article, we’ll be focusing on Google Advertising and the settings to look out for when creating a Search Campaign.

We’ve spent the last few months looking at dozens of accounts with millions of dollars of spend. While Google tries to make it as easy as possible to set up search campaigns, a lot of times, the provided defaults can lead to wasted spend and missed opportunities. This list is not exhaustive, but these are the first things we look out for when auditing an account. Note that most of these also apply to Microsoft.

Search and Display Networks

We usually like to stay away from Google’s Display and Search Networks. Your impressions will decrease and CPC (cost per click) will increase, but the quality of traffic will be significantly better. Search Network tailors more to consumer sites like Ask.com and product pages on Amazon, Walmart, etc. If you’re advertising to other businesses, this usually doesn’t bring in quality leads.

Similar to the Search Network, selecting Display Network adds too many variables to your search campaign. We suggest creating dedicated display campaigns so that you’ll have more control over ad placements, images, format, etc.

Note: For Microsoft Search Ads, you’ll need to turn the Search Networks off at the Ad Group level

Location and Language Settings

Similar to Search and Display Networks, it’s important to understand how Google treats location targeting. The default when setting up a campaign is “all countries and territories”. The best practice is to break the territories up into regions for easier management and reporting. If you opt for this setting, you’ll likely miss out on certain areas because Google charges your account when people click on your ads. Your budget will be exhausted by the time it reaches later time zones. It’s also easier to keep track of where you’re spending and knowing when to adjust budget for new or existing regions.

Another thing to keep in mind with locations, is in the options setting — only select “Presence”. If you have “Presence or interest” selected, Google will show your ad to people that search for your keyword but aren’t necessarily living in your target location. We’ve seen accounts use up to 40% of their budget outside of their target location because this setting was turned on.

Note: For Microsoft Search Ads, make sure you’re using Campaign Settings for Location Targeting

Audience Demographics and Device Targeting

At P2B, we like to take Audience Demographics with a grain of salt, but it’s still important if you’re trying to optimize spend to drive conversions. Google does its best to guess who is clicking on your ad in terms of age, income, and other life events. If you’re advertising to business executives, it’s best to turn off ages 18-25 and 65+. This ensures that most people that see your ads will be decision makers. We also recommend turning off income brackets lower than 50%. While income is harder to pin down, we usually see a much lower conversion rate in this bracket.

Device targeting is where a lot of budget is wasted. More often than not, mobile phones, tablets, and TV’s have the lowest conversion rates and highest cost per conversion. As a general rule of thumb, we like to look at the Google Analytics device breakdown report. If 20% of your website traffic comes from devices other than desktop, set bid adjustments to -80%. This will ensure that your search ad is shown to people that are more likely to convert.

Tip: Make sure audience targeting is set to Observation. This will help optimize targeting for your display ads.

Keyword Targeting 

Another area where wasted budget occurs is with Keyword Targeting. Google’s default for keywords is Broad Match, which ends up pulling in a lot of non-related keywords and can also hurt impression share due to a lower Ad Rank score. Start with Phrase Match and make sure you’re updating negative keywords at least once every two weeks. It’s also important to make sure keywords are unique to each campaign. If you have the same keyword in multiple campaigns, it can drive up the cost-per-click and ultimately increase your spend.

Tip: Use the Duplicate Keyword Tool in Google Ads Editor to find and remove keywords that appear in multiple campaigns and ad groups

Bid Strategies and Conversions

One of the first things that Google asks when you’re creating a campaign is “What do you want to focus on?” A few years ago, we would have steered away from automated bidding, but Google has made a lot of improvements to their algorithms and learning; Maximize Conversions and Enhanced CPC is the way to go. Setting up campaigns that guarantee conversions (think Branded campaigns) can train Google on how to find the right people that are more likely to convert on your site. This ends up benefiting all of your campaigns.

This is more of an account setting, but It’s important to keep in mind how you’re measuring conversions for your business. The biggest mistake we’ve seen folks make is creating too many conversions ie. page views and button clicks. This can dilute Google’s effectiveness in maximizing conversions. Start with conversions for “Contact Us” or “Demo Requests” (and make sure they’re firing correctly!). Once you have a good baseline for conversions that drive value to your business, you can start adding additional things like “Free Signups” or “Subscribers”. Make sure you’re giving these conversions the correct dollar value as Google uses this information to improve and maximize ROI.

Tip: Once you have Cost per Conversion set up, experiment with the bid strategies Target CPA and Target ROAS

Edit: Enhanced CPC is depreciating in October ‘24. Consider Manual CPC.

Conclusion

There are a lot of techniques to improve performance and increase conversions in Google Ads, but these are usually the first things we look out for when auditing accounts (big and small). In the next post, we’ll explore some of the default settings to be aware of when setting up display campaigns.