Notepad with words PPC pay per click concept and marker.

These words are most often followed by something to the effect of, “my brother in law says he can do it”, or even better, “I can probably do it just as well myself.” When Google first created Adwords, launching the Pay-Per-Click revolution, they made it so anyone could just create an account, list what keywords they wanted to show up for, set a max bid and budget, set a service area, write a couple lines of ad text and wah-lah! You’re advertising online! Therein lies the beginnings of billions of dollars worth of wasted ad spend.

Where Does Most PPC Waste Come From?

PPC waste comes from many areas of PPC management, but let’s break it down into two categories: things an amateur can probably fix and things best left to a professional.

PPC Waste an average person can fix on their own:

Much of wasted spend comes from poorly managed keyword lists and improper settings on the account, both of which a sensible amateur could fix by digging around or googling how to fix their Google.

First, keywords. Once you put in a business category, Google suggests hundreds of keywords broken down into a dozen or so Adgroups. Blindly hitting “Add All” and thinking why not appear for everything is the first step down the path of waste my money. The list has to be gone through with a fine tooth comb, each adgroup needs to be checked to make sure the grouping makes sense. Geographic target for each adgroup may be different because you might advertise a very small service area for one service but a much larger one for a different service. What page of your website should each adgroup land on? What should the ad text read for each individual keyword? Managing your keywords is a big job, and it’s one thing many put way too little into resulting in massive amounts of wasted spend.

The other area that an amateur could help himself more on is proper settings. Understanding matching settings like Exact Match, Phrase Match, and Broad Match can be the difference between, as I once showed a new client who sold backyard play sets, appearing just for “wood backyard playsets” and “dangerous wood backyard play sets you definitely shouldn’t buy because they will kill your children” (yes, that client’s ad really showed up for the latter search.) Geographic settings are another killer. What kind of setting is best for you? Should the settings be the same for all products and services? Have you set up negative settings, for example, if Arlington, Texas is in your settings, have you made Arlington VA  a negative? What about the search partner network? Should your ads be showing there or is it a big waste of spend that should be directed toward higher quality searches?

Most of the common sense things listed above can be done by anyone with a little common sense. They are all good ways to avoid waste. Don’t get me wrong. A pro will do a MUCH better job at managing your keyword lists, setting negative keywords, and deciding what settings are right for you. However, they are things you could figure out how to do decently.  But when you look at all the ways a pro goes about ensuring an adwords budget provides the best possible return on your investment, you realize Red Adair might have been talking specifically about paid search when he said, “If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur.”

What an AdWords Pro Knows

A real Adwords pro has passed multiple Google certifications and probably has years of experience doing what will take you years to figure out.

Tracking and Attribution:

How do you know exactly what your investment is accomplishing? How do you know what is working and what isn’t? How do you know specifically if a term or a group of terms is sending people to the website who take no action or if it’s sending people to the site who do what you want them to do? A pro will start with setting up tracking. Analytics goals added to contact forms and javascript to transpose phone numbers with tracking numbers when a visitor arrives as a result of a paid search. Whatever result we are trying to achieve, a method must be in place to attribute the result to the investment.

Cost Per Conversion Focus:

A good pro has years of training and experience managing PPC campaigns with a cost per conversion focus. If it costs me $1 to drive one kind of visitor, and one of 10 picks up the phone to call, my cost per conversion is $10. An amateur might think that was a better click than the one he has to pay $2 for,  but the pro sees one of 3 visitors from the $2 click calling and realizes it’s only costing $6 to convert.

Let’s look at that in terms of money. Say your average customer is worth $25.  If you spend $1,000 on Advertising, with a $10 cost per conversion, 100 people call you and you make $2,500. Great, right? That’s a 250% return on your investment! But the pro took the same budget and using a good cost per conversion focus delivered 166 phone calls, and put $4,100 in your pocket. Does that $350 management fee still sound like a lot?

Quality Score Improvement:

There are two ways to get your ad to get better placement on Google. Raise your bid or improve your quality score. If you’re asking “What’s Quality Score and Why it’s So Important?” click that link and start part one of our 3 part series on that subject. The fact of the matter is, the amateur raises the bid. The pro manages the bid, raises it if he needs to, but works mostly on improving quality score. He does this by improving the relevance of the ad text, working on the content on the page the ad is directed to land on, and working on the ad to improve the ad’s click through rate. How important is that? Look at the chart below to see how much quality score impacts Click costs in Adwords:

Let’s look at it in terms of money again. The amateur in the example above was paying $2 for the good click. The pro takes it over and sees a quality score of 2, and quickly works on it to improve the the quality score to a still poor (for a pro) average of 5. Average click cost goes down to $1.36. Average cost per conversion goes down to $4.08. The same $1000 budget as before now delivers 245 phone calls. The business now makes $6,125 off the same budget. Over the course of the next few months, the pro does his real work and gets the quality score to a very respectable 8. Click cost goes down to $.85. Average cost per conversion goes down to $2.55. The same $1,000 budget now delivers 392 phone calls. The pro made this business $9,800 which is $7,300 more than the amateur was originally satisfied with because they didn’t want to pay the $350 management fee.

Suddenly it makes sense, doesn’t it?