I began managing AdWords accounts back in 2005, and over the years I’ve seen many accounts make many mistakes. These have cost advertisers hundreds of thousands, if not millions, in wasted AdWords spend.

The people managing the accounts were far from clueless. But the fact is that AdWords isn’t easy, and this type of waste is bound to happen if you don’t know what you’re doing. 

As cynical or paranoid as it may sound, Google benefit from AdWords being so complex.

Google would tell you that they go to great lengths to explain everything within their online help centre, but the fact is that almost every single aspect of AdWords is skewed heavily in Google’s favour. Aside from anything else, who reads the manual?

So here are three of the most common mistakes. Mistakes that will burn through your budgets without much to show for it.

Mistake #1 – one match to rule them all

Using only broad-match keywords or over using them is a really bad idea.

Google’s definition of broad match is as follows:

“A keyword setting that allows your ad to show when someone searches for that keyword or a variation of it. The broad match keyword “bicycle bell” can cause your ad to show if someone searches for variations like “bicycle bells,” “buy a bell for a bicycle,” and “bell reviews for bikes.”

That sounds nice, doesn’t it? Who wouldn’t want to use broad match?

The problem with broad match is the variations. You might think you’re bidding on “bicycle bell” but Google sneak in searches that have nothing to do with your original keyword.

Google make money from each click, and you waste money when the person who clicked on your ad isn’t interested in what you’re offering.

Broad match can be useful, but you should use it with caution. Try a few broad match terms and then track their performance.

If your account contains broad keywords and you’re not monitoring their performance, you’re definitely wasting money.

Mistake #2 – not enough negativity

Using too few or no negative keywords can be lethal.

If you’ve never heard of negative keywords or you’re not regularly trying to find them, you need to pay close attention to this.

Google’s definition of a negative keyword is as follows:

A type of keyword that prevents your ad from being triggered by a certain word or phrase. It tells Google not to show your ad to anyone who is searching for that phrase.

Imagine you’re selling downloadable photo editing software that only runs on a Windows computer.  When bidding on “photo editing software”, your ads could be displayed for the following searches as well: “free photo editing software”, “mac photo editing software” or “photo editing software for linux”.

Worst of all, you might receive clicks from people looking for something that you don’t offer. Why? Because people searching don’t pay close attention to their clicks. They’re not paying for them – you are.

You can stop this from happening by using negative keywords like –free, mac and linux.

By using negative keywords, you’ll reduce wasted ad spend but even more importantly, it will improve your ROI.

When you limit your ad’s display to only those who are truly interested in what you’re offering, you should see an improvement to your click through rate (CTR). Receiving a higher CTR can lead to a lower average cost per click (CPC) because CTR is an indicator for relevance. Google reward advertisers with lower CPCs when they’re more relevant.

Even if you only use exact match keywords, negative keywords are more important than ever. With exact and phrase match, Google is now allowing close variants the ability to trigger your ads. 

Mistake #3 – trust

You may be giving away too much control to Google, or perhaps just trusting them too much.

Don’t get me wrong. I love Google. I really do. But their agenda is rarely the same as yours or mine.

AdWords advertisers want to pay the lowest price for targeted clicks. Google want people to click on your ads or your competitors ads because this is how Google make money.

Sure, Google want people to find what they’re looking for. But never forget that AdWords is Google’s main source of revenue. It’s safe to assume Google won’t always have your interests at heart.

So it’s strange that so many advertisers allow Google to control where their ads are displayed, what triggers their ads and even how much they’re prepared to pay.

Some advertisers even go as far as allowing Google to set up their AdWords accounts. 

My recommendation is to always be sceptical of Google’s claims and suggestions. You need to question all of Google’s defaults within this massive, complex advertising system.

That’s the safest way to not waste your money on AdWords.

It goes without saying that from an AdWords point of view, having a great product, the best keywords, and fine-tuned landing pages is all pointless without good ads.

Poor ads can cost you enormously in the long run. For example, poor ads might receive impressions that have few clicks or even no clicks at all. When this occurs your click-through rate (CTR) will be low if not zero.

Having a low CTR sends Google a signal that your ads aren’t very good and may even be irrelevant. Remember, Google don’t only want to make money off each click, they also want people to find what they’re looking for. If they’re seeing what they want when your ads are displayed, Google will put your competitor’s ads above yours, or may not even show your ads at all.

Poor ads mean that Google will charge you more per click than other advertisers.

Alternatively, if your ads are relevant, it’s more likely that people will click on them. This will in turn produce a higher CTR which will lower how much you pay per click, which is why it’s vital to constantly to write more effective ads.

Begin with a review of your keywords

Think about the person who’s clicking on your ad. How did they get there?

Someone either performed a search using a keyword or they were on a page that was related to one of your keywords.

To effectively communicate what you’re offering, it’s a good idea to separate keywords into distinct themes. Each keyword theme would then become its own ad group. Once you’ve created these ad groups, you’ll be able to make a better connection between the keyword and ad copy.

For example, imagine you’re selling fruit online; apples, oranges, bananas and so on. Potential customers searching for bananas will be more inclined to click on an ad that mentioned “order bananas online” instead of one that mentioned “order fruit online”.

It can also be a good idea to use some of your keywords within your ads. People are more likely to click on your ads if they see the word or phrases that they just searched for.

But before you begin to stuff your ads with keywords, have a look at your competition to see what they are saying within their ads. Remember, each time your ad is displayed, you’re trying to entice the searcher to click on your ad instead of those of your competition.

So your ad needs to stand out.

If most of your competition pack in too many details, try making your ads short and to the point.  If all your competitors are using the keyword in the headline, try a different related keyword instead.

And don’t forget to use a call to action. While you can’t use “click here” within your ads, you can use things like learn more, try for free, download now, buy now and so on.

Don’t put all your eggs in one basket

Personally I like to experiment with four ads per ad group that are significantly different from one another, so that I can get a better idea as to what works and doesn’t.

I would also recommend setting the ads to “rotate indefinitely” instead of Google’s options of “optimize for clicks”, “optimize for conversions”, or “rotate evenly.

adwords ad rotation settings

You can safely ignore Google’s warnings because you’ll want to determine for yourself which ads work and which ones don’t. I always like to be in control instead of giving it up to Google.

While a high CTR will produce a lower cost per click, CTRs should not be your sole metric. You need to also consider what happens after the click.

For example, if you were to have an ad that said “Free HDTVs”, it’s safe to assume that you would receive a large number of clicks resulting in a high CTR. The only problem is that you’re most likely not giving away free HDTVs.

Striking the right balance between ads that produce high CTRs and good results after people land on your website is a good idea.

Creating effective ads is not easy and can be time consuming. If you’ve created one ad and then copied it to all of your ad groups, it’s unlikely to produce your desired results. 

Creating multiple ads is vital, and the only way to see what works best. Once you have found a winner, delete what doesn’t work and expand on what does.

Keep on experimenting.

Don’t skim this post. It may affect you – if not today or tomorrow, then at some point.

If you sell desktop software through AdWords, you need to be aware of Google’s new stance against your business.

Google recently unveiled a new AdWords policy on desktop software, “Unsupported content: free desktop software”.  

“The AdWords policy on unsupported content will change in April 2015. The policy is changing to prohibit the promotion of free desktop software unless the ad names the specific software being promoted and leads to the site designated as the primary online distribution source. After the new policy goes into effect, the policy description will be updated to reflect this change.”

Companies selling software may think that this doesn’t apply to them, as they don’t offer free software.

They should think again.

Companies who don’t sell software may think that this doesn’t apply to them at all.

They should also think again. See I’m not a software company, I don’t care below.

While it’s still early days for Google enforcing this policy, they appear to be disapproving ads that offer demo/free trial software, and not only ads that are offering free software.

All hope is not lost.

You can still advertise free desktop software through AdWords, you just need to do the following:

  • Your ads must point directly to landing pages on a site designated as the software’s primary distribution source.
  • Your ads must include the promoted software’s name. (Yes, you did just read that correctly.)

In the fine print of this new policy, there’s a form that needs to be filled out in order to set that primary distribution source. It’s the “Application to advertise free desktop software as an authoritative distribution site” form.

Anyone that’s been hit by this new policy will need to fill out that form.  

My main issue is with the second part of the policy: the requirement to name the promoted software within the ad. As advertisers, we have a limited amount of space within our AdWords ads. Being forced to wedge in the name of your software will be at best limiting, at worst disastrous.

You may be thinking: “I’m not a software company, I don’t care.”

Although this recent change only affects software companies, it’s a worrying trend for everybody.

Google’s sudden policy changes are having a dramatic impact on many businesses. They’re not doing anything wrong, they’re not trying to trick the system, and they’re not in any way deceiving the people clicking their ads. Yet they may come into work one morning to find their accounts frozen.

Google are moving the goal posts, changing the rules and redefining legitimacy – both for AdWords and their organic listings. You might well be next. And when it happens, it hurts.

adwords - drops like a stone

Each month, your credit card is charged by Google for all the AdWords clicks you’ve received.

Each month, you question yourself whether it’s worthwhile, yet there’s a good chance that you’re never able to come to a satisfying conclusion.

Google provide some tools for measuring success, such as conversion tracking. But realistically you know that it’s little more than an inaccurate indicator.

In an ideal world, you would be able to see that out of all the people who clicked on your ads, X purchased your product or service.

The problem is that conversion tracking doesn’t paint a complete picture. You don’t know if you are looking at 90% or 5% of tracked conversions. This can render conversion tracking more or less useless.

So how can you tell if you’re wasting money on AdWords?

Start by making sure the right people are clicking on your ads.

It’s pretty obvious that if the wrong people are clicking, you’ll be paying for traffic that isn’t interested in what you’re offering.

I would therefore recommend that you review the following areas within your AdWords account. These are often overlooked and can easily result in irrelevant traffic.

Review the location targeting

Begin with reviewing your location targeting to see where visitors are clicking from. When you setup your campaigns, you picked a location or a group of locations that you wanted to target. The problem is that you might be receiving clicks from locations that you never wanted. This means you might be wasting money.

If you’re interested in the detailed explanation as to why Google are showing your ads to people that you didn’t want to target, please read more about it here. I would recommend you monitor this closely, because even if the clicks appear to be coming from your targeted locations this may change over time.

Review device targeting

In the early days of AdWords, Google allowed advertisers the ability to control the types of devices they wished to target. This meant that an advertiser could turn on or off tablet or mobile according to their needs.

Nowadays you can disable mobile devices, but you can’t disable tablet devices from seeing your ads.

If your website is not mobile or tablet friendly, and you weren’t aware of the device settings, you’re probably presenting a poor experience to your AdWords visitors. This may waste money on clicks that can’t even view your website properly.

Review your keywords

Next, you’ll want to analyze your keywords and ask yourself how targeted they are.

For example, let’s say you’re selling laptop computers. Someone that searches for “low cost laptops”, “buy laptops” or “laptop deals” is probably looking to purchase one. It’s therefore a good idea to have your ads displayed on these types of searches.

If you were to bid on more general terms like “laptops” or “windows laptop”, you’ll probably receive some clicks from those who are interested in buying, but you’ll probably also receive clicks from people with other agendas. In this case it might not be a good idea to have your ads displayed.

Finding the right keywords is far from easy. If you’re too targeted, you tend to see less traffic. And if you’re too broad, you tend to see traffic that’s more off target.

This will be an ongoing struggle which brings me onto my next question: are you using negative keywords? If not, start doing so immediately. Negative keywords tell Google not to show your ads if someone searches with those keywords.

For example, if you’re selling laptops and you’re receiving clicks on searches such as “low cost laptop repair”, it might be a good idea to exclude the term “repair” since you are not offering a laptop repair service.

Negative keywords don’t only save you money, they also improve your performance by reducing your ad impressions. This will increase your CTR which will in turn lower costs.

Review your ads

Take a step back and perform a critical review of your ads, but within the context of your keywords and ad groups. This is something that is often overlooked.

Your ads need to make a direct connection with your keywords. Ad groups allow you to group keywords within common themes, so you can craft ads connected to their keywords.

If your ad groups each contain many different keywords and many different keyword themes, it will be difficult to write ads that communicate to the multitude of keywords and keyword themes.

Most importantly, people are less likely to click on your ads.

After you’ve reviewed your AdWords account for potential leaks or problems with your targeting, you then need to review what happens after the click.

Now make sure that your website is working

If your potential customer just clicked on one of your AdWords ads, do they immediately go back to Google to click on the next? If this is how most of your AdWords visitors behave, you’re almost certainly wasting money.

Now you’ve confirmed that only the right people are clicking on your ads, visitors to your website should be finding what they’re looking for. In other words most should be doing exactly what you wanted them to do after they arrived. That could include filling out a form, downloading your software or purchasing your product.

If they’re not doing what you wanted, there may be a problem with your website, product or service.

Solving these types of issues can be difficult. It can also require a great deal of effort as well as experimentation. I would recommend beginning the process by looking at your website through the eyes of your AdWords visitors.

Remember that when someone arrives on your website from an ad, it should have a clear connection to the page they landed on. You only have a few seconds to capture their attention.

Now you can make sure that your costs are reasonable and not out of control

You’ve just confirmed that the right people are clicking on your ads and they’re doing what you wanted them to do once they arrived on your website. You now need to consider your costs.

Are you paying more than you should, and are you wasting money?

This is one of those questions that’s difficult to answer and will depend on your particular business needs.

To try and answer it, I would recommend that you perform some experiments.

What happens when you decrease your bids or budgets? Do you receive more for less? Did it have a negative or a positive impact on performance?

What about the opposite? What happens when you increase your bids or budgets? Do you receive more targeted traffic that produces the results you were looking for?

These types of experiments will help you make more informed decisions.

Always remember that you’ll never have a complete picture of exactly how many sales AdWords produced. You might see that some sales are attributed to AdWords, but you’ll never be able to tell how representative that data is. Tracking the true ROI will always be problematic and may even be impossible.

In the end, it’s best to focus on what you know and not be bogged down by the unknown. Make sure you’re paying for the right people to click on your ads, that your website is producing the results you want, and experiment with the price you pay for AdWords.

Taking these steps will help produce better results.

If you’re spending on AdWords (or other online ads) then you’re probably paying close attention to conversion rates.

Doing so is understandable but flawed. And it may be hurting you and also Google.

At risk of oversimplifying how conversion tracking works, a person clicks on your ad, a cookie is placed in their browser, and when they buy your product, this registers as a conversion. Voilà.

The problem lies in disconnects – anything that breaks that beautiful chain.

Some examples:

– A person clicks on your ad, but someone else on a different computer pays for your product.

– A person clicks on your ad but doesn’t buy until the cookie has died.

– A person clicks on your ad on their phone, but purchases your product from their desktop computer.

The first scenario can be a big problem if you selling primarily to businesses.

The third scenario can be an even bigger problem for almost everyone.

The obvious reason for this is the growth in the number of multi-device users. A few nights ago I searched for a product on my phone, then bought it the next day from my desktop PC.

What this means is that the gap between the number of actual and recorded conversions is almost certain to widen with each passing month.

For Google this could be disastrous. AdWords customers might see that the number of reported conversions and even recorded sales in their account is slowly declining over time. Yet the actual conversions and conversions value could be increasing.

Google will of course already be aware of this problem, and the enormity of the threat it poses can’t be understated. But it’s not just Google’s problem; it’s yours too.

If, for example, you see that your AdWords ad spend remains the same but the number of conversions steadily declines, wouldn’t you be tempted to reduce your budgets?

My prediction is that this year will see Google rename AdWords conversions to something suitably vague and noncommittal like “recorded conversions” or even “conversion indicators“.

As it stands I suspect they’re caught between providing false information that can hurt both parties, and appearing to take data away from their customers.

Over to Google.

AdWords conversion tracking is dead. No, Google haven’t removed it from AdWords, nor are they phasing it out. Yet.

But if you’re using conversion tracking as your sole gauge of success, you’re doing it wrong!

Why? Because AdWords conversion tracking is a highly inaccurate indicator; but not a reliable metric.

The entire system is based on a cookie, and that cookie might not be present at the time of the conversion. A missing cookie does not mean the conversion was not a direct result of your AdWords efforts. It just means the cookie was not found at the time of the conversion and there are many reasons why this might happen. Someone deleted it, a different device was used, a different user was involved, someone ate the cookie (just kidding) and so on.

Even if you’re able to see some recorded conversions, you can’t accurately use that data. It’s impossible to say how representative the data truly is. Were you able to track 100% or 10% of your AdWords conversions?

No one wants to waste money on AdWords. It is however important to understand the limitations of the current tracking system.

Ask yourself: what can we track?

We all want to know if visitors are arriving on our websites and purchasing our products and services, however we just can’t see this with any level of accuracy.

What we can see is if visitors were engaged with our site. In most situations, someone who arrives and is not interested won’t venture any further. They will leave the website. With AdWords, we want to reduce the number of visitors who aren’t interested and increase those who are.

This can be accomplished by combining the following three systems: Google Tag Manager, Google Analytics and AdWords conversion tracking

How to set up page engagement tracking:

This tutorial will assume that you have already set up the Google Tag Manager across your entire website. For instructions, please visit the Google Tag Manager website.

I like the Google Tag Manager because it makes my life easier. You add a small bit of code to your website much like you do with Google Analytics. Then the Google Tag Manager will dynamically inject tracking codes into your site based on the conditions that you set. With the Google Tag Manager, you no longer need to tag all your pages with AdWords, Analytics or third party tracking codes. You simply log into a web interface and configure your tracking tags as you see fit.

Step 1: Set up a new type of conversion from within Google AdWords.

Page engagement tracking step 1

I would recommend that you set the count to “unique conversions” because the initial page engagement is most important; not all subsequent page engagements.

The conversion window should also be set to “1 week” because page engagement is about that initial visit to the site just after the ad click.

Complete the conversion set up process and save the actual code that Google generate within a text file. You’ll need to reference some of the values in a later step.

Step 2: Listen for page engagement with the Google Tag Manager.

With the Google Tag Manager, you can set up event listeners that can be used to trigger this new page engagement conversion. Currently, the Google Tag Manager offers 6 different event listeners:

  • Click Listener
  • Form Submit Listener
  • Link Click Listener
  • Timer Listener
  • History Listener
  • JavaScript Error Listener

For this tutorial, I am only going to configure page engagement tracking on the Link Click Listener, however other types of events could be used for triggering page engagement conversions as well.

Set up a new tag within the Google Tag Manager called “Link Click Listener”:

Page engagement tracking step 2

The Link Click Listener tag will trigger an event each time a link is clicked.

Step 3: Set up a page engagement rule specific for AdWords traffic:

Page engagement tracking step 3

I only want to track page engagement if the visitor arrived from an AdWords ad and then clicked on a link within the landing page. To accomplish this, I need to create a rule.

The first part of the rule identifies whether or not the user is from AdWords by the gclid= parameter. This parameter is present when using AdWords auto-tagging. By default, most AdWords accounts have it enabled. You can easily be confirm this by following the instructions on this page.

The second part of the rule determines if the event was a link click. Please note the text case within “gtm.linkClick”. It’s important.

Step 4: This is where you tie everything together. Setting up the actual AdWords page engagement tag:

Page engagement-tracking step 4

When setting up this particular tag, you will need to reference the conversion code that Google generated in step 1. In it, you’ll need to pull out the Conversion ID and the Conversion Label and then enter them into this tag.

You then need to select the firing rule for this tag which is the rule you set up in step 3.

I also added a zero for the conversion value because I don’t want these types of conversions to interfere with any possible sales conversion tracking that I may have set up.

Step 5: You must test!

Testing to see if this works could not be easier. From within the Google Tag Manager interface, Google provide an easy to use debugging system. By clicking on the Preview button, you’ll be able to debug what you just configured without actually making it live on your website.

I highly recommend that you test this within each of the major web browsers – Chrome, Firefox and Internet Explorer.

Step 6: Last but not least, you need to make it live.

Once you have thoroughly tested your new page engagement tracking system, press the Publish button to make it live.

Welcome to conversion tracking in 2014.

Most AdWords accounts use some form of conversion tracking as a metric of success, yet this model is flawed to the point of being meaningless.

I’m not going to go into the specifics of why there may be a disconnect between the ad click and the conversion here, but if you want details read Tracking your AdWords return on investment.

I will, however, show an example that illustrates why conversion tracking is meaningless.

The story of Misguided.

We’ll consider the case of Misguided, a company who sell an online solution for tracking productivity. They’ve been using AdWords for many years, and consider it an important part of their overall marketing strategy. Their AdWords account is managed by an inept ad agency, who’ve assigned Fritter to handle their work.

When Fritter began managing their AdWords, he setup conversion tracking to record anyone who creates an account as a conversion.

So a person searches for a productivity solution, clicks on Misguided’s ad, and has a cookie dropped on their system. Assuming they like what they see, they then open an account and, this is recorded as a conversion.

One of their main campaigns (main #1) rather conveniently receives a round 100 conversions a week.

Fritter thinks he’s quite the AdWords expert, and thanks to reading Tracking your AdWords return on investment, knows that 100 conversions a week won’t be all the conversions, but he uses this data as a useful metric.

So if rc is recorded conversions, nc is non-recorded conversions, and ac is actual conversions:

rc + nc = ac

Fritter hasn’t quite understood the implications of this though, and doesn’t understand that nc may actually be more significant than rc. This is a fundamental mistake on his part.

In the main #1 campaign, for example, even though Fritter has no way of knowing this, there are twice as many non-recorded conversions as there are recorded.

In other words:

100 recorded conversions + 200 non-recorded conversions = 300 actual conversions.

Fritter has been trying to optimise this campaign, and in doing so has disabled a large number of countries that were generating a lot of clicks but absolutely no sales. The result of that is that the campaign is now spending more of its budget in the United States.

One of the implications of this is that there are now a greater proportion of searchers using mobile devices and tablets. As a direct consequence, the number of disconnects in the conversion tracking process has increased.

This results in AdWords reporting 75 recorded conversions a week, instead of the previous 100.

Making a big mistake.

However what Fritter can’t see is that although there are less recorded conversions, there are more non-recorded conversions than before:

75 recorded conversions + 275 non-recorded conversions = 350 actual conversions.

Again, Fritter can’t see this. So what does he do? He forgets the significance of the non-recorded conversions, is swayed by the apparent decline in conversions, and cuts the budget to that campaign.

Fritter can’t know that he’s cutting the budget to the most profitable campaign in the account, mainly because he’s being deceived by the perception of accuracy.

In a sense, you could argue that Google make the misinterpretation easy. The screenshot below shows a total of 11 performance-related metrics. Five of them (highlighted in red) are as good as meaningless.

Misleading conversion data

I’m not suggesting that you pay no attention to reported conversions, as under certain circumstances this information can be quite useful.

But don’t rely on it, and don’t use it as the basis of making decisions on running the account.

The obvious question now is what should you use to determine the success of your AdWords account. The next post will deal with that issue, and give you all the answers you need to make meaningful and accurate decisions.

For now:

Don’t Fritter your account budget with Misguided goals. (Sorry, I couldn’t resist that.)

The era of being able to accurately track your online marketing efforts is over. Or more accurately: the era of thinking you could accurately track your online marketing is over.

Only a few years ago, we thought we could track almost every single keyword that was used to find our websites. The reality was that we could track the keywords that were used to click on our websites in the search engine results. If we’d have left it at that, the difference would have been minor, but we didn’t.

Once we could track our keywords, we then wanted to link them to conversions. We wanted to know which keywords resulted in the greatest number of enquiries, signups and sales, and why not? The information was there. Except it wasn’t.

A few years ago we worked with a company who were spending a great deal of money on their AdWords ads. Initially they were confident that the ads were sending targeted visitors to their website, but with time they became accustomed to the smörgåsbord of data that was there for the taking, and started trying to track their ROI more accurately.Precious

After months of implementing an impressive series of steps to track their conversions to previously unheard of levels, they saw their worst fears confirmed. Their AdWords account wasn’t anywhere near as profitable as they’d thought. In order to confirm this they decided to freeze their AdWords account for a seven day experiment to see what impact this had on their sales.

If I remember correctly it was just over 24 hours later that they turned their AdWords ads back on, as the immediate and dramatically negative impact on their sales was all the proof that they needed. Their brief but costly experiment had taught them that conversion data is not to be relied on.

This particular company was fortunate in that they not only had high volumes of fast-converting data to reach this conclusion quickly, but also had the foresight to test their theory before fully committing to it.

I won’t bore you with the variety of different reasons that there may be disconnects in your conversion tracking, but I will ask that you at least consider the idea that your tracking may be dangerously misleading.

Let’s take a step back. If I were to build bird houses and sell them in local markets and craft fairs, I would be able to precisely track my ROI, based on the costs of my time and raw materials, the costs of my selling at each event and the sales from each.

The same rules, however, do not apply online – at least not for most businesses. And this goes far beyond the issue of which attribution model you choose to work with. You simply cannot track all your sources, and more importantly you have no idea how representative this data may be.

When a person fills out one of the forms on the SoftwarePromotions website, we can see where that person came from as a referral source.

In days gone by we used to also ask people where they heard about us, and the disconnect between what people said and where they actually came from was enormous.

So even when you can track, you can’t necessarily rely on the data produced.

We also recently started working with a company that I first met at a conference many years ago. When they filled out the form on our website I could see that they “found us” through Google. This was in fact true, but also quite incorrect.

I can only imagine how many businesses close their AdWords accounts in error because of incorrectly calculating a poor ROI.

I assume that this is significantly less than the number of businesses who spend far too much on their accounts but never realise.

The house, in this case Google, always wins. And they don’t even need to rely on statistical probability – they can weight the system as they see fit.

Conversion tracking is an extremely useful indicator. Using it as anything more can be deadly.

When it comes to AdWords, what works for some may not work for others.

One account’s goals may be different from another. I might want to show my ads to a large number of people, while you might only want to show your ads to those who are at a specific point in the purchase process.

We each have different agendas and how each of our accounts perform will be fundamentally different. We will also gauge success differently.

Begin by taking a step back.

Ask yourself, what do you hope to achieve by using AdWords, and how realistic are those goals?Goals Concept

AdWords provides you with the ability to precisely target your prospective customers as well as the analytics to back it up. The problem is that most people don’t know how to correctly interpret the analytics.

You should know that conversion tracking as well as Google Analytics are integral to understanding how your account has been performing. Clicks, impressions, CTR, cost and average position will only tell you one side of the story.

You want to understand what happened after the ad click.

What most people don’t realise is that conversion tracking is not accurate. You’re able to track some data but you won’t be able to tell how accurate it was. You won’t know if it was 10%, 90% or 100% of the actual conversions.

If you concluded that success is down to ROI, you’ll need to identify all the people who clicked on your AdWords ads and paid for your product or service. The problem is that you might not be able to see that occur every time.

In my years of AdWords experience, I have dealt with a wide range of AdWords account types. Accounts that advertised pregnancy classes, luxury resort rentals, real estate, enterprise level software and more. They all had one thing in common: Tracking success within AdWords is a problem.

Each of those accounts received sales, however they weren’t always attributed back to AdWords. Understanding this lack of accuracy with conversion tracking is critical when interpreting your account’s performance.

Determine what you can track.

If you’re just tracking sales and you’re not seeing many conversions, you won’t be able to act on that data. And you need data in order to make decisions.

Think in terms of what people do once they arrive on your website, starting with what you want them to do once they arrive on your website.

Most probably don’t arrive and then enter their credit card details. Your potential customers are more likely to read a few pages, fill out a form, download your software prior to purchasing or simply leave.

Track them all. The more data you have, the easier it will be when making decisions that impact your account.

Keep in mind that once you begin tracking more than one type of conversion, you’ll have to weigh them differently. Someone that clicks on your AdWords ad and then purchases your product will be more valuable than someone who just downloads a PDF whitepaper.

At this time, Google don’t look at them differently. To Google, a conversion is a conversion. Meaning you have to be careful when using Google’s conversion optimization tools.

Sometimes, you need to look beyond the conversion.

Let’s assume for whatever reason, that you can’t track sales back to AdWords. You’ve proceed to setup conversion tracking for various actions across your website, all of which indicate an interest in what you’re offering, and it’s producing plenty of data.

Just because you’re seeing large numbers of conversions doesn’t in itself mean anything.

To put it bluntly, people are strange! You might find a situation where a website or search term results in a large number of conversions that has nothing to do with your product or service.

These people are clicking on your descriptive ads, traversing your website, and ultimately performing those conversions.

Everything indicates that these people are interested in what you’re offering, however you’ll need to put the conversion tracking data aside and try to understand what is truly happening.

Conversions tracking will only take you so far.

Don’t let it lead you to the wrong conclusions. Understanding its limitations will help you determine if AdWords is working or not.

Start by reviewing your search terms report. This report provides you with the exact searches people performed in order to trigger your ads. If they seem overwhelmingly off-topic, then you’re not targeting the right keywords or you’re allowing irrelevant traffic to somehow enter the cycle.

Review your CTR (click-through rate). How has it been trending over time? If you’re seeing that it’s rising, that’s a good sign because it means that you’re delivering relevant ads. Google will reward you for relevance by showing your relevant ads more often and at higher positions. If you’re seeing that your CTR is declining, that’s not a good sign because it means you’re not showing relevant ads. In turn, lower CTRs could result in your ads being shown less often and possibly costing more per click.  

Review your bids and your average CPC (cost per click). If your bids are set too low, your keywords won’t trigger your ads. Setting your bids too high, will result in wasted spend. You wouldn’t want to pay more for something that you can get for less.  

Review your average positions. If your ads are shown predominantly in lower positions, they will be clicked on less often or not clicked on at all. That will impact your CTR as well as your cost per click.     

Review your Analytics data. Once people click on your ads, you need to understand what they do after they arrived on your website. If they leave immediately (bounce rate), then your landing page might not be the best fit. If people are arriving and then viewing a few pages (pages / visit), that could be a good indication, however you need to make sure they’re visiting the right pages. If most visitors are not finding what they’re looking for, that’s not good.

Review your conversion data. Once again, you need to be careful when analyzing your conversion data. Understand that the absence of conversion data does not necessarily mean that it’s a bad thing.

Last but not least, never look at just one metric. A high CTR is pointless if most visitors leave your website within a few seconds of arriving.

On their own, each metric is meaningless. Combined they carry power and authority.

As a service provider, who would you think is our biggest competitor? It’s not another SEO agency, and it’s not an AdWords agency. It’s the firm based near where you work, who can walk, drive or commute to where your business is run. This is ludicrous.

Historically it made a great deal of sense. Our parents and grandparents did business in a world where phone communication might be too limiting and travel was expensive. My Dad, for example, was a self-employed Optician who needed to meet quite regularly with his accountant. He couldn’t have considered someone who was based an hour away, let alone someone in a different country. More importantly, there were an abundance of people to choose from within his local community, so choosing from a set of local options made perfect sense.

Today we live in a world with a more diverse set of skills, many of which didn’t exist in our own childhood – if you’re as old as me anyway. And the internet has provided us with possibilities that were only considered in science fiction even one generation ago.

Which is why I am baffled when a company reaches out to us, likes what we say and admires our reputation, yet chooses instead to work with a local company. (Note: I’m only baffled when the main reason for doing so is their proximity.)

It's 2014 already

Don’t get me wrong – there’s no bitterness. Our company is generating enough profit to feed ourselves quite nicely, thank you. And I certainly don’t expect every sales quote I send out to be accepted.

Yet I find it difficult to understand when we lose to a local company. If you’re based in Silicon Valley, then there’s a reasonable chance that by choosing a local option you’re not limiting yourself too dramatically. Everyone else, however, are limiting their options to the services based within a small radius of where they happen to be located. If you insist on your SEO agency being located within an hour of your offices, how many options do you have to choose from? Five? Ten? Fifty? No matter where you’re based,I guarantee it’s less than the whole world.

Limiting the companies you work with means limiting your chances of growth and success. And all of this so that you can indulge in the formality of a handshake? Perhaps you also insist that they wear a suit and tie while optimising your content, or maybe even a three piece suit?

This is 2014. Our company has worked with more than 500 companies from more than 40 different countries. We communicate regularly with our clients using email, Basecamp, Google Hangouts, Skype, GoToMeeting, the phone and yes, occasionally we even get on a plane to see them.

The price you pay for confining your options around the conventions of yesteryear might be enormous.