Ten Ways to Waste Your PPC Budget

Wasting your PPC (define) search budget may be acceptable if you have a virtually unlimited budget. But few, if any, marketers have an unlimited search budget, buying top position for every word all the time, regardless of cost. Most of us, whether agency side or client side, manage simultaneously to budget and achieve ROI (define), net search profit, click per action (CPA), or return on advertising spend (ROAS).

There are lots of ways to waste your coveted, hard-won budget. Some may seem obvious, while others may have slipped by you. In any case, ’tis the season to tighten belts. So it’s a good time to review your account to identify any budget-wasting settings or structures.

• Don’t measure and manage to your measured objectives. If you have been reading my column and aren’t yet spending your PPC search with clear objectives, shame on you. Survey after survey shows a large percentage of marketers don’t measure post-click behaviors or measure them without managing to them.

  Make sure you’ve established an automated or manual system to manage to your basket of success metrics. Consider broadening your definition of success to include more than just shopping cart abandonment or completed lead-gen forms. Visits to contact pages or other indicators of site stickiness (particularly visits to high-value pages in a B2B (define) or service business) can round out your basket of success metrics. Even Google Analytics can help here, but my personal preference is to use third-party tracking and campaign management systems.
• Set and forget the campaign. Even when using automated campaign management systems, reject the idea of “set it and forget it.” In real-time auctions run by engines, formulas change all the time, and you must be proactive, especially because you often have to change more than just the bid price. For example, the creative and offer landscape may be changing, even as you sit still.
• Let search engines pick your clicks based on a set budget. Each search engine has the ability to set campaign budget caps. Even with the recent addition of automated bidding to a CPA target, taking control of your campaign in some engines still yields higher profit and better overall results, particularly if you’re spending enough to build a good-sized data set.

  If you let the search engine set budgets, even when they’re broken down at the campaign level, you’ll be spending when you shouldn’t and missing opportunities when you should be buying specific clicks or by more accurately bidding high enough to get the impressions for the clicks you really want.

• Ignore elasticity and never do a tradeoff analysis. It’s great when you have a higher reserve price on a listing (keyword, engine, time of day, geography, etc.) and an average position of two or more, enabling you to be more aggressive on that listing. However, unless you (or your technology) have a good idea of the competitive reactions to loss of position or loss of average position, you have a potentially budget-wasting scenario on your hands. And that scenario involves deploying more budget with bid escalation, not position improvement. This is called testing a market’s elasticity. Ignore elasticity, and you may be throwing additional money at a bid that will result in price escalation without any positive positional changes.
• Specify a nonrelevant page (for any engine, especially Google). Many marketers still send traffic from a huge basket of keyword terms directly to the home page or to pages that don’t include the keywords being purchased. That’s an easy way to waste budget. Take a closer look at your account to make sure you’re relevant. Google makes this easier with its recent addition of a Quality Score column that can be activated within the Google AdWords interface.
• Allow incorrect match types. Broad match is the default in the engines, but it drives a mix of highly qualified visitors and those who aren’t as valuable. You need some mix of broad match in your campaign, but running mostly broad match is a waste of money.
• Fail to include negative matches. Make sure you include negative matches — specifying keywords that will result in your ad not being shown — against any reasonably popular keyword listings running either broad match or phrase match.
• Publish ad copy that misses the keyword or close synonyms. Search scent is key. Searchers are scanning the SERP (define) to identify paid and organic listings that match their query. Failure to include the search keyword in the ad copy (title or description) will result in a lower CTR (define) and lower Quality Score, which translates into high costs and wasted budget.
• Leave out Microsoft adCenter. AdCenter may not be big and it’s interface is still improving, but if you spend over $1,000 a month on Google, it probably makes sense to have an adCenter account as well, especially because cloning your account is getting easier.
• Have untrained people run your account. There’s a shortage of trained talent. Don’t compromise by using untrained staffers. Whether you send them to a bunch of conferences or through SEMPO Institute training, do something to fix this.

Search marketing works great during a recession and during boom times. Make sure you use your budget wisely.

Meet Kevin at SES San Jose, August 18-22 at San Jose Convention Center.