10 Common Signs You Are Spending Too Much On PPC Ads

10 Common Signs You Are Spending Too Much On PPC Ads
measuring your results

If you are inexperienced or lack extensive knowledge about running PPC ads campaigns, then it may be difficult to determine if you are spending too much on PPC ads or not. Afterall, you cannot exactly share your ad spend and results with competitors. Eventually, you convince yourself that you are paying an efficient price for ads.

Learning that you are spending too much money ads can be difficult to take. Especially when you factor in how long your ads have been on and how much you have spent over the years.

Fortunately, there are many signs to help you determine whether you are spending too much on Ads. These signs will help you revisit your ad campaigns and dig into deeper detail on how to run your ads more cost-effectively and efficiently.

Overview: Signs of Overpaying for PPC Ad Spend

  1. You Are Not Measuring Conversions
  2. Using Broad Match Keywords
  3. Your Losing Money
  4. Low Quality Score
  5. Your Landing Page is Poor
  6. Not Using Ad Extensions
  7. Lack Of Testing
  8. Your Business Goals Do Not Align With Your Campaigns
  9. Ad Copy Doesn’t Attract or Interest Your Target Audience
  10. Not Adding Negative Keyword

You Are Not Measuring Conversions

Conversions are a main key indicator on whether your ads are performing well or not. This is key in determining whether you are wasting money for poor results or if you are actually pay for the best optimal outcome.

Depending on the type of business you have, may determine how you measure conversions. For example, if you are a service-based business or do not have an ecommerce site, then you will probably measure results whenever a user submits contact information to your company. This can be either a newsletter sign-up, phone call, direct email, or a contact form submission. If you have an ecommerce site, then you will be able to track your results more accurately through website sales.

Ultimately, it is essential for you to set up ad conversion tracking so you can have a better idea on your return on investment. Be sure to test and continuously improve your ads. Overtime, you will notice that your ads will become more cost efficient for better results.

If you are unsure on how to set up conversions on your website, then contact a PPC ad specialist today, or visit Google’s tutorial on setting up Ad Conversions.

measuring your results

Using Broad Match Keywords

One of the biggest cause of overspending on ads is broad match keywords. Many businesses unknowingly utilize broad match keywords for lead generation. However, these types of keywords are not practical or recommended for lead generation.

Ultimately, each match type keyword has different purposes and outcomes. Each has their own strengths and weaknesses and should be used based off your goals. Below are descriptions of the 3 main match type keywords and when you should use them.

Broad Match

This type of keyword match type will show your ad to a very broad audience. Basically, it will show your ad for anything in the search query that is similar or any form of variation to your keyword. This includes phrases and exact match.

For example, if your keyword was “cardboard box,” then your ad can show for “moving boxes,” “packaging boxes,” “cheap cardboard boxes for sale,” and a lot more.

Broad match keywords should be used only if are trying to build brand awareness. However, if you do manage to use broad match terms for lead generation, then you better monitor your ads carefully.

Phrase Match

Phrase match keywords are probably the most practical form of keywords. They are not broad nor to specific. They will generate a fair amount of relevant traffic to your site.

For example, if your keyword was “cake”, then your ad can show for “hot cakes,” “how to start a cake blog for beginners,” or “cake recipes.”

If you are looking for lead generation, then we definitely recommend phrase match keywords. However, you should stick to broad match if you are looking for brand building.

Exact Match

It is exactly how it sounds; exact match type keywords are the keywords themselves with vary minor variations.

For example, if your keyword was “coffee cake,” then your ad will show for “coffee cakes.”

Exact keywords are extremely specific, you basically need to know exactly what your target audience is typing in the search queries to trigger your ads. These keywords provide marketers the highest relevancy and as a result the highest click through rate. However, the amount of traffic and clicks you will receive will be fairly low.

Ultimately, by knowing the keywords and their strength and weaknesses, you can be better managing your ad spend. But more than likely if you are using broad match keywords you are overspending.

Your Losing Money

The most obvious way of knowing whether you are spending to much on ads is if you are losing money. If ads are no longer profitable then it does not make sense to continue with them. Unless you want to dig and find solutions to your ads. If you are still unsure, then we recommend you partner with experienced PPC ad professionals.

However, here are some key metrics you can look at to determine whether you are spending to much on ads. The first metric is cost per conversion. Find out how much it is costing you to pay for a conversion. Rule of thumb, if it is eating up too much of your profit margin, then your ads probably need work.

The other metrics are the return on ad spend (ROAS) or your return on investment (ROI). ROAS is the total income from ads divided by ad spend. ROI is calculated by revenue – cost divided by cost.

Ultimately, these formulas will guide you on how profitable and efficient your ads are operating. If its barely profitable or your losing money, then the odds of you overspending on ads is almost certain.

profit loss

Low Quality Score

A quality score reflects on the overall quality of your landing page and ad in regard to a user’s search query or keyword. The higher the quality score the cheaper and easier it will be to rank on Google Ads. The lower the quality score, the more difficult and costly it will be to rank.

If you have a low-quality score then, you are overspending on ads. Which means you need to revisit your keywords, landing page, and ad to pinpoint the relevancy and value it delivers for your target market.

Your Landing Page is Poor

Landing Page

Your Ads and keywords can be spot on! However, if you have a poor landing page, then you can expect to be overpaying for poor results. Essentially, your landing page and your website play a huge role in your PPC ad success.

For your website or landing page to be successful and cost efficient, you will have to provide your target audience with relevant and valuable content. This can include videos, product/service information, company contact information, helpful tips, and solutions, ultimately whatever your audience is looking for.

Secondly, your website needs to provide a great user experience. Your website should be easy to navigate. Content should be readable, accessible, and easily understood. Website should be well designed which can help build credibility. Basically, the better developed and managed your website is the better it will reflect on your PPC ads.

Finally, you should trial and error on your landing page to learn what works and what doesn’t. An alternative is A/B testing where you test two variations of a landing page. Ultimately, the goal here is to continuously learn and improve your overall ad experience.

Not Using Ad Extensions

Ad extensions improve the quality of your ad. It provides users with more relevant and valuable options when interacting with your ad. Here are the different types of ad extensions: call out, sitelink, structure snippet, call, and location.

Lack Of Testing

PPC ads are not something you just set up and walk away from. You need to test your ads overtime and make necessary improvements. Eventually, your ads will become more effective and cost efficient.

However, do not get comfortable. Your competition can always be one step behind you. In addition, consumer trends and preferences may change so it is best to be on your toes when managing ad campaigns.

Your Business Goals Do Not Align With Your Campaigns

One common mistake many business owners and amateur marketers make is not sticking to their goals. Working against your goals can help eat up your PPC ad budget. It’s like running in the opposite direction that you are supposed to.

For example, if you are looking for lead generation, then your campaign goals should be tailored to lead generation and not brand awareness/reach. Be consistent with your company’s goals, they should reflect upon all of your marketing efforts.

Business goals

Ad Copy Doesn’t Attract or Interest Your Target Audience

If you noticed a very low engagement or poor quality of leads generated from your ads, then you are probably not attracting the right audience. Usually, this is because you wrote that ad with your very own bias point of view. However, you audience does not think like you, they are not experts in what you do or sell. As a result, you need to step into your audience shoes.

To avoid or fix this common mistake, you will have to write your ad copy to be relevant and valuable to your target audience. Often, this can be a product, service, or solution you can provide your audience. Remember to test your ad’s performance and to adjust them appropriately.

Not Adding Negative Keywords

If you are not adding negative keywords, then you are overspending on ads by paying for irrelevant keyword search terms. Eliminate your margin for error or the chance of having your ad show up to an irrelevant customer or search. To do this you need to add negative keywords.

Negative keywords prevent your ad for showing for specific words and phrases. For example, if you have a negative keyword for the phrase “Los Angeles,” then your ad will no longer show up if Los Angeles is mentioned.

Key Takeaways: Why You’re Spending Too Much On PPC Ads

There can be multiple factors that contribute to why you are spending too much on PPC ads. Its very common actually, usually because people do not know they are making mistakes.

The best rule of thumb or takeaway you should take from this blog post, is that everything needs to relevant to your goals, business, and target audience. Stick to your business goals as they should reflect in your PPC ads. Remember why you are in business, your ads should include your products, services, and solutions. Be specific with your ads by targeting your customers and not everyone.

These simple tips can be essential for the success and results of your PPC ad campaigns. If you need any assistance with PPC ads or website designing, then partner with JMF Digital Marketing today.

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