Mistake #1: Not Grouping Keywords Correctly

AdWords is set up so that you can create campaign ad groups to manage different types of campaigns. (If you have a product campaign and a content campaign, each of them can be managed separately.) Within each campaign, you can break down your ads and keywords into ad groups.

Not using ad groups is one of the biggest mistakes people make. Instead of segmenting their ads into groups based around similar types of keywords, they lump all of their keywords into one ad group and show everyone the same ad.

If you don’t break up your keywords into different ad groups, then you’ll lump everything together underneath one ad copy. This doesn’t allow you to customize the ad to be a good fit for the term being searched for. The more you break up your ads and keywords into themes, the easier your campaigns will be to monitor and optimize.

 Mistake #2: Not Using the Right Keyword Matches

The next biggest mistake people make is not using the right broad match, phrase match, or exact match keywords.

An exact match keyword works just like it sounds. The term being searched needs to exactly match the keyword that you entered in AdWords. Thus, if you have “Nike running shoes” as an exact match, it will show up only when someone searches for “Nike running shoes” and won’t show up even if someone searches for “Nike running shoes for sale.”

This may seem too narrow, but as you can imagine, it also makes your keywords and ads more precise. To add an exact match keyword in AdWords, you enter it with brackets around it like this: [nike running shoes].

So why does all of this matter? It matters because the type of match you use will have a big impact on your ads. A broad match will deliver more impressions, but it will be more imprecise since it will show up for terms that aren’t a tight fit for your products or the ad.

On the flip side, phrase and exact matches often provide a higher conversion rate, but they can deliver significantly fewer impressions, which means you may not reach as many people as you need to reach.

In some niches, the number of people looking for what you’re selling is low, so if you limit too much with exact matches, then you’re not going to get very much traffic. On the other hand, if you have too many broad match terms, then you may not get a high enough ROI on your ad campaign. The best scenario is to tweak your matches to find what works best for your business.

Mistake #3: Not Using Negative Keywords

Another mistake people make is not using negative keywords. AdWords allows you to use negative keywords as a way to exclude keywords that are not a good match for your product.

For example, if you own an e-retail store that sells designer women’s shoes but not athletic shoes, then you won’t want your ads to show up on searches for “women’s running shoes” but do want them to show up on searches for “women’s shoes.” Thus, you can add “running” as a negative keyword, and your ads won’t be shown for any searches that include the word “running.”

Negative keywords can be added at both the campaign and the ad group level. Thus, if a word should be excluded from only one particular ad group, then you can exclude it at the group level, but if you want it excluded from the entire campaign, then you can do that as well.

Mistake #4: Not Trusting Numbers More than Your Creativity

Falling in love with your ad copy can be a problem. You may write some copy and think, “I love this ad!” That’s fine, unless the numbers tell you otherwise.

You should always be testing your copy. You can try two different headline variations, the same headlines but different body copy, or the same copy but a different call to action. Testing different variations will help you to know what works best. Sometimes mentioning a benefit will increase click-throughs and/or conversions. Other times, a different headline will improve your results. You’ll never know until you test.

And once you do start testing, don’t fall in love with any version of your copy. Once you have between 20 to 40 clicks, choose the one that’s getting the best results, which means the highest click-through rate, the highest conversion rate, or the lowest cost per acquisition (CPA), depending on what makes the most sense for your business. Don’t make the mistake of loving your clever copy more than the results you’re getting.

  Mistake #5: Not Bidding on Your Own Brand

A lot of people make the mistake of not bidding on their own brand. They assume that since they already rank for their own brand, they don’t need to advertise for it. That’s one way to look at it.

Another way is to realize that if you aren’t advertising for your brand, other companies will. They’ll use your brand name for an ad group and target your visitors. Yes, you’ll rank first for the organic term, but your competitor may be advertising directly above that result.

 Mistake #6: Not Knowing the Lifetime Value (LTV) of Customers

Have you ever calculated the LTV for your customers? If not, there’s no way to know how much you can spend on AdWords per acquisition.

Let’s say your LTV is $10. This means that you’ll earn $10 on average over the lifetime of doing business with your customers. If you’re paying $6 per acquisition, then you’re ok, because you’re making more per customer than you’re spending. But if your LTV is $4 and you’re spending $6 per acquisition, eventually you’ll go out of business.

A lot of companies don’t know their LTV so they don’t know what a good CPA is. If customers stay with you an average of six months and pay $30 per month, then your LTV is $180. In this scenario, you’ll be doing ok even if your Google CPA is $100. It all depends on what you’re selling and what the LTV is for your business.

As an e-commerce business, you may lose money at the beginning, but make it back over the lifetime of doing business with your customer. Amazon likely knows how many people reorder and the average size per order. Based on that, they know how much they can pay per acquisition.

 Mistake #7: Not Testing the Optimal Ad Position

If your goal is to improve branding, then it’s a good idea to be in one of the top two ad positions, but if your goal is to get the best results, sometimes it’s better to be in position 3-5.

Can this really be true? Can it be possible that it’s better to be in a lower position than first or second? The answer is yes, and it’s because people tend to be click happy with the top two positions. They may click whether they’re seriously interested or not. But if your ad is in position 3-5 (or possibly lower), then it’s not the first thing people see.

People have to look at the side of their screen, which usually is something they do only after they’re not able to find what they’re looking for. Thus, being on the side acts as a filter. Only people who really are looking for a better result will click on your ad and visit your site.

Without testing, there’s no way to know which ad position is the best for your business. Sometimes being in one of the top two positions works great, but other times, positions 3-4 provide a better return.

 Mistake #8: Not Knowing Who You’re Competing Against

Another mistake is not knowing which ads your competitors are using. You need to know who you’re competing against, what keywords they’re using, and what their landing pages look like.

Specifically, you want to put yourself in your customers’ shoes and see which ad you’re most likely to click on. Then, once you do click (although it’s recommended to find ways to do it without actually clicking on your competitors’ ads and making them pay for it), pay attention to their landing pages, and compare theirs with yours.

Which one is the most appealing? Which one would you rather go to if you were the customer? Take some notes and figure out what you can improve on your landing pages. Do you need a better design, a cleaner look and feel, security factors, testimonials, social proof, authority, or something else? Create a checklist based on the things you find.

Mistake #9: Expecting Too Much from AdWords

Have you ever considered whether you expect too much from AdWords?

A lot of people have a really small budget and expect to launch the next big business with that tiny budget. They want to get in front of a large audience but have only $100 to $200 to spend per month. That’s not going to get you very far.

If your budget is too small, you won’t have enough to test your ads until they start performing well. Rarely does anyone nail a campaign right off the bat. It takes time to run and optimize your campaign to improve your return.

A small budget also means you’re going to burn through your campaign and will have to wait until more money is available. That gets frustrating. You’ll feel like, “This doesn’t work for me. I’m going to try something else.”

Mistake #10: (Specifically for E-commerce Businesses), Not Directing Visitors to the Appropriate Product or Category Page

Possibly, the biggest mistake of all that people make with AdWords is not directing customers to an appropriate product or category page. Instead, they direct everyone to their homepage.

Even if you have a pretty homepage, you don’t want to take people there directly, especially on e-commerce sites where you have category and product pages. It’s better to take people to a landing page or a product or category page where people will see a direct match to the ad they clicked.

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