I can’t count the number of times I have spoken to people who have tried Google AdWords and were unhappy with the results. When I ask for details on how they implemented Google AdWords, it becomes clear to me why they weren’t successful – improper execution. Below I will tell you how I define success and the 9 most common mistakes with Google AdWords.
Defining success and failure generally depends on what your goals are. I recommend defining success as acquiring new clients at a Cost of Acquisition (COA) that is less than your Average Net Lifetime Value of a Customer (we will review this concept more next week). This assumes that you are using the Google AdWords conversion tracking feature and have the conversion tracking code either on the thank you page for your e-mail marketing sign-up process or the thank you page at the end of your checkout process. This feature allows you to see Cost Per Conversion (CPC) as a column in your Google AdWords campaign reports. (In this case COA and CPC are the same thing.)
The reason that I’m introducing you to the critical concept of Cost Of Acquisition is that almost all the common mistakes below drive up Cost Of Acquisition which lowers ROI and causes people to conclude that Google AdWords doesn’t work for their business.
9 most common mistakes with Google AdWords:
1. Amateurish or no keyword research
2. Poor understanding of what drives costs on google AdWords (competition, match types, keyword breadth)
3. Buying all keywords on broad match only
4. Not using broad match modifiers
5. Not using phrase and exact match
6. Not using geography to bring cost down
7. Not creating multiple campaigns and ad groups to test different segments
8. Not using conversion tracking
9. Not using the proper tools, operating inefficiently
Next week I will go into more detail on the concepts of Cost of Acquisition and Average Net Lifetime Value and why they are critical metrics in implementing Google AdWords.