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The Single Biggest Reason People Lose Money With AdWords

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Andy Black

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The Single Biggest Reason People Lose Money With AdWords

The trick to winning with AdWords is to increase your ad click-through-rate (CTR), and the conversion rates throughout your sales funnel.

You don’t win by blindly following Google’s canned response to increase bids, have 8-20 keywords per ad group, or worry incessantly about your quality score.

With paid search, you win when you give people what they are already looking for.


An Example

When someone searches for “dublin plumbers”:


Your ad should echo back what they searched:


And so should your landing page:



Your Mistake

You probably call what people type into Google a “keyword”.

In this case, you would say that the keyword was dublin plumbers.

That’s ok… if you’re doing keyword research or search engine optimisation.

But if you are doing AdWords,

Calling what people typed into Google a “keyword” is probably
the single biggest reason you’re losing money with AdWords.


In AdWords, what people type into Google is called a “search term”.

In this case, the search term was dublin plumbers.

In AdWords paid search, a “keyword” is what we bid on, and it can match a *set* of search terms.

The only time that a keyword is the same as a search term is when we’re using exact match keywords, and have the campaign settings to disallow plurals and close variants.

Keywords match SETS of search terms:



Why It's Killing You

One of the main reasons people fail with AdWords paid search is that they use too much broad match.

By bidding in broad match, our ad for Dublin Plumbers can show for people searching for plumbers in locations within Dublin, e.g. “rathmines plumbers” or “blackrock plumbers”.

To these searchers, our ad is quite relevant, but not as relevant as ads for “Rathmines Plumbers” and “Blackrock Plumbers”.

Everyone knows this intuitively, but they sabotage themselves by using too much broad match, and having too many keywords per adgroup.

When you bid on a broad or phrase match keyword, you don’t know exactly what search terms Google will show your ad for.

You therefore don’t know if you have the best ad possible for that search term.

And the best landing page.


What You Need To Do

To win at lead generation with AdWords paid search, you need to ensure that your search term, ad, and landing page work as one unit, in harmony.

The ad needs to be relevant to the search term, and echo back the words in the search term.

Looking for the best results on the Google search page is a painful experience. People just want to find what they are looking for, and are scanning the page quickly to find the most relevant results.

Google knows that people scan rather than read each sentence fully, and even bold the words in the search term:



So you ideally echo back the words in the search term in the ad headline, and in the body of the ad.

If you get someone to click on your ad, then you need to quickly let them know that they are in the right place when they hit your landing page.

This is going to be performed with a big headline that also echoes back words in the search term.

If your landing page isn’t relevant, then the visitor will click the back button and you’ve just wasted money buying their click.


A Wide Funnel

If you are bidding on keyword dublin plumbers in broad match, then you’ve got a wide neck at the top of your funnel.

Your ad can appear for many different search terms, some intended and some unintended.

The top of your wide AdWords funnel:


Your ad is showing for lots of unintended searches.

You’re not going to get any work from people looking for search term plumber jobs dublin. You are wasting money on clicks for people using this search term.

You’re also not going to get any work from people looking for search term plumbing supplies, since they are probably other plumbers, or people who want to fix their own problems. Again, you are probably wasting money on clicks for people using this search term.

You cover the areas Rathmines and Blackrock within Dublin, but your ad CTR is not going to be as good as if your ad specifically mentioned those areas.

And your ad likely shows for many different search terms that are even less relevant and are just increasing your impressions and reducing your ad CTR.

If you ad CTR is lower than your competitors, then your cost per click (CPC) will start rising, and your impression share will start falling.

Meaning your ads show less often, you get less clicks, and each click costs you more.

Oh, and your landing page won’t convert as well since people were searching for lots of things other than “Dublin Plumbing Services”.

Many of these visitors are just going to hit the back button, so you have wasted money.

Which means your cost-per-conversion is climbing, so you have to reduce your bid prices to remain profitable.

Which means you lose traffic, until you get none at all, and your AdWords campaign has crashed and burned.


Lots of Narrow Funnels

The alternative is to create many small funnels that only show for search terms you want to show for, and where your ad is hyper relevant, and where your landing page promises them what they are looking for.

The top of your narrow AdWords funnels:


You now don’t have unwanted impressions or clicks from searches that are unrelated.

This improves your CTR, and reduces wasted spend.

Your ads are now much more relevant because they are tailored to each search term.

So your overall CTR improves even more.

If you can perform better than your competitors, then Google will reward you with a lower cost-per-click, and a higher impression share.

So your ads are showing more often, more people are clicking on them, and each click is costing less.

Your conversion rates improve since you’re now sending people to a landing page offering what they were looking for.

So your conversions increase, and your cost-per-conversion drops.

You can increase your bids and get exponentially more traffic. (Doubling your bid price typically results in 4x your click volume, so doubling your conversion rate can result in 8x your click volume.)

Your campaign is now up and running, and it’s a case of getting into a continuous cycle of optimising ad CTR, landing page conversion rates, repeat business and referral rates.

Ultimately, you are trying to increase your visitor life time value.

And every time you do it, you increase up your bids and your ads rise in position.

Volumes increase each time you increase your bids and conversion rates, and your campaign is going through the roof, instead of through the floor.

AdWords paid search can be real knife edge stuff.

New campaigns can keep dying off, no matter how much you push your bids.

But if you get it right, your campaign can hum and you can get into your continuous cycle of improvement.


Conclusion

When you’re using AdWords for paid search, stop calling what people typed in a “keyword”.

A keyword is what you bid on, and a search term is what they typed in.

Understand that when you bid on anything but exact match keywords, you are bidding on sets of search terms, and a lot of them are unintended, and a lot of them could have better ads.

Stop bidding on keywords, and bid on search terms instead.

This means that you bid in exact match (and set the campaign parameter to not allow close variants).

This will keep you out of trouble if you are getting started.

And is the start of optimising if you are already running.

If you can, create a separate ad group for each search term.

Be extremely careful of broad and phrase match keywords, as you are giving Google permission to show your ad for many different search terms.

Using broad and phrase match also gives Google permission to send your traffic to a choice of different ad groups within your campaigns. This can cloud any analysis you are trying to do, and can have unintended results when you amend bids or ad copy.

There is a place for broad and phrase match keywords, and for lead generation it’s mostly to find more search terms to bid on.

With the one-exact-match-keyword-per-adgroup structure, you’ll not only increase your ad CTR and conversion rates, but you’ll also be sending your traffic to the ads and landing pages you intended to send it to.


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Tiago

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Thank you Andy for the help you're giving. I've been following your threads lately and can see that you know your stuff.
 

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Bump. Rep transferred.
 
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Andy Black

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JimClark

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Hi Andy,
Thank you for all the adwords knowledge you've been sharing with us.
I've noticed recently that whenever I create a new ad, my ad displays in position 4 on the right side even though I know I'm the top bidder. With my previous ad I held the top position. If I activate my previous ad, it goes back to No1. My new ad seems to always stay in position 4 no matter how high I bid until someone clicks it. It's been happening for a few weeks now. Do you know what I mean? Any way around this?
 
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Hi Andy,
Thank you for all the adwords knowledge you've been sharing with us.
I've noticed recently that whenever I create a new ad, my ad displays in position 4 on the right side even though I know I'm the top bidder. With my previous ad I held the top position. If I activate my previous ad, it goes back to No1. My new ad seems to always stay in position 4 no matter how high I bid until someone clicks it. It's been happening for a few weeks now. Do you know what I mean? Any way around this?
Hard to tell what's happening without looking at the account.

Make sure you're comparing apples with apples.

I'd segment by "Network (with search partners)" by "Top vs Other" and by "Device".

Here's a quick video on how to segment by more than one dimension:
https://www.thefastlaneforum.com/community/threads/segmenting-adwords-data-by-more-than-one-dimension.52787/
 
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Your posts on Adwords are INSANE @Andy Black , thanks for that value.

Is the bottom line: Use Exact Match for keywords instead of using the broad match? I know I've been guilty of banking on broad match because if I see impressions I feel my ad is working [which isn't true of course]. I thought any boob could do fine with adwords, but after reading your posts, I've been doing them like a sucker flushing money would :D

Thanks Andy!
 
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Use Exact Match for keywords instead of using the broad match?
Kinda, but not really.

Forget keywords, forget match types.

Think about what search terms you want to show for, and why.

Then use keywords and match types to ensure you show for them. They are just tools.

---

Say you owned a hotel in Kings Cross, London.

Exact Match:

You could bid on an exact match keyword such as:
[hotels london]

If you had the campaign settings to disallow close variants, then that exact match keyword would match the search term:
hotels london

This search term has a LOT of search volume.

(Modified) Broad Match:

You could bid on modified broad match keyword:
+hotels +kings +cross +london

That keyword would match several search terms:
hotel near kings cross in london
london hotels kings cross
etc...


In this case, the modified broad match keyword matches search terms that are more relevant for your business.

... and their total search volume is a lot less than the exact match keyword.


You can't say one match type is better than another. It depends how you use them, and what your goals are (lead gen requires well qualified visitors, arbitrage less so).

Keywords and match types are just tools. You need to think about what search terms you want your ads to show for, and bid on those accordingly.


Hope that helps!
 
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Kinda, but not really.

Forget keywords, forget match types.

Think about what search terms you want to show for, and why.

Then use keywords and match types to ensure you show for them. They are just tools.

---

Say you owned a hotel in Kings Cross, London.

Exact Match:

You could bid on an exact match keyword such as:
[hotels london]

If you had the campaign settings to disallow close variants, then that exact match keyword would match the search term:
hotels london

This search term has a LOT of search volume.

(Modified) Broad Match:

You could bid on modified broad match keyword:
+hotels +kings +cross +london

That keyword would match several search terms:
hotel near kings cross in london
london hotels kings cross
etc...


In this case, the modified broad match keyword matches search terms that are more relevant for your business.

... and their total search volume is a lot less than the exact match keyword.


You can't say one match type is better than another. It depends how you use them, and what your goals are (lead gen requires well qualified visitors, arbitrage less so).

Keywords and match types are just tools. You need to think about what search terms you want your ads to show for, and bid on those accordingly.


Hope that helps!
Yeah! That does make more sense, thanks Andy! Rep$$$

Side Note: I lived in Ireland for a year to do volunteer work [Dublin], beautiful country :D
 

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If you can, create a separate ad group for each search term.
Andy, it's a challenge following all your posts/threads but - just the same.

I used to do this. But it was so hard to track progress on 200 terms!

Also, choosing the terms themselves - when you are just starting out w/a new business and new campaign...is a huge challenge. I put together a list of 3K terms - 90-97% are likely not gonna click or - if they do - they're not going to convert (I'm going for a sale, not a sign up).

If you've addressed this in one of your posts - pls point me to the link.

Otherwise...love to hear your input.
 

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Hmmm... I might create a thread to brain dump into and keep stuff in one place? It would help me too. Lol.

Start with buyer keywords. Watch the video about the online buying lifecycle (linked to in my master thread in my signature).

EDIT: Brain dump created on the inside.
 
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Do you feel that this info is just as applicable to say, Bing? I got banned from Adwords a few years back. My guess is that they didn't like my fitness related copy and thought the product promise was unrealistic (it wasn't, I'm as honest as the day is long)

And thank you for all this... Rep sent
 
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Do you feel that this info is just as applicable to say, Bing? I got banned from Adwords a few years back. My guess is that they didn't like my fitness related copy and thought the product promise was unrealistic (it wasn't, I'm as honest as the day is long)

And thank you for all this... Rep sent
Yes, applicable exactly the same for Bing.

Thanks for the rep sir.
 

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Thanks for eye-opening posts, I've learned a lot.
(and set the campaign parameter to not allow close variants).
Seems like this option is no longer available, or at least I can't find it. Did your strategy change? Maybe it would make sense to use dynamic keyword insertion since we don't have 100% control over the phrases.
 
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Seems like this option is no longer available, or at least I can't find it. Did your strategy change?
Yep, good old Google got rid of the option to opt out of exact match allowing close variants - last year in September I think.

Rather annoying, and it only affects people who're bidding in exact match (i.e. the small % who know what they're doing). IMO, all they did was make it harder for people to control their traffic, and thereby level the playing field. Oh, and add a bit more Google "bleed" to our AdWords accounts.

Just this week I saw in an account that the keyword with the highest spend for the previous week was [travelling insurance]. wtf? Looking at the search terms that were going to that keyword though showed that it was mostly people searching for "travel insurance" - which is in the account but getting no traffic. Because of the volume for that search term, I'll put it into it's own campaign, and add [travel insurance] as a campaign negative for all other campaigns. This way I know where the traffic is going, and can split test the ad and adjust bids without worrying about it squirting off somewhere else.

So I guess I'll turn this annoyance into a benefit by doing what others are unwilling to do.


Maybe it would make sense to use dynamic keyword insertion since we don't have 100% control over the phrases.
Firstly, Dynamic Keyword Insertion (DKI) puts the keyword you're bidding on into the ad copy, NOT the search term. We have 100% control over our keywords, but not quite the control over search terms that Google would have us believe.

DKI is often used by people/teams with some technical knowledge who are trying to bulk upload keywords and ads and try and make the keyword and ad match.

They're easy to beat if you use common sense and had an ounce of a marketing brain.


Say your ad headline uses dynamic keyword insertion and is:
Find {KeyWord:London Hotels}
Someone searches with search term "london hotels" and your keyword [london hotels] wins the auction in your account. Your ad headline would become:
Find London Hotels​

(since this fits into the allowed 25 characters).


Now let's say that the searcher decided this wasn't specific enough and appended "kings cross" to the end of their first search (they likely to append to the end since it's easier than changing words in their previous search term).

So their search term is "london hotels kings cross".

Keyword [london hotels kings cross] wins the auction this time.

Again your ad headline uses dynamic keyword insertion and is:
Find {KeyWord:London Hotels}​

But "Find London Hotels Kings Cross" won't fit into the ad headline, so it becomes:
Find London Hotels​

As humans with a marketing brain, we know that Kings Cross is a location within London, so a better headline would have been:
Find Kings Cross Hotels
WE know that the London is now redundant in the headline since the searcher used Kings Cross.

So if we're smart, we'd write a better ad using the information the searcher gave us in their search term.



Another reason I don't like DKI is just looking at all your ads and trying to work out what the ad copy would be. You've got to look at the keywords and try to mentally put them into your ad to work out what it looks like.


If you're going to use brute force and bulk upload, then go a step further than DKI and use intelligence to create the best ad you can, BEFORE you upload. (Hint: it's easy with Excel and the len and if functions.)


TL;DR? Don't use Dynamic Keyword Insertion (DKI).
 
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Great posts @Andy Black

SKAGs with exact match and negative keywords at the ad group level are where it's at!
 

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The Single Biggest Reason People Lose Money With AdWords

The trick to winning with AdWords is to increase your ad click-through-rate (CTR), and the conversion rates throughout your sales funnel.

You don’t win by blindly following Google’s canned response to increase bids, have 8-20 keywords per ad group, or worry incessantly about your quality score.

With paid search, you win when you give people what they are already looking for.


An Example

When someone searches for “dublin plumbers”:


Your ad should echo back what they searched:


And so should your landing page:



Your Mistake

You probably call what people type into Google a “keyword”.

In this case, you would say that the keyword was dublin plumbers.

That’s ok… if you’re doing keyword research or search engine optimisation.

But if you are doing AdWords,

Calling what people typed into Google a “keyword” is probably
the single biggest reason you’re losing money with AdWords.


In AdWords, what people type into Google is called a “search term”.

In this case, the search term was dublin plumbers.

In AdWords paid search, a “keyword” is what we bid on, and it can match a *set* of search terms.

The only time that a keyword is the same as a search term is when we’re using exact match keywords, and have the campaign settings to disallow plurals and close variants.

Keywords match SETS of search terms:



Why It's Killing You

One of the main reasons people fail with AdWords paid search is that they use too much broad match.

By bidding in broad match, our ad for Dublin Plumbers can show for people searching for plumbers in locations within Dublin, e.g. “rathmines plumbers” or “blackrock plumbers”.

To these searchers, our ad is quite relevant, but not as relevant as ads for “Rathmines Plumbers” and “Blackrock Plumbers”.

Everyone knows this intuitively, but they sabotage themselves by using too much broad match, and having too many keywords per adgroup.

When you bid on a broad or phrase match keyword, you don’t know exactly what search terms Google will show your ad for.

You therefore don’t know if you have the best ad possible for that search term.

And the best landing page.


What You Need To Do

To win at lead generation with AdWords paid search, you need to ensure that your search term, ad, and landing page work as one unit, in harmony.

The ad needs to be relevant to the search term, and echo back the words in the search term.

Looking for the best results on the Google search page is a painful experience. People just want to find what they are looking for, and are scanning the page quickly to find the most relevant results.

Google knows that people scan rather than read each sentence fully, and even bold the words in the search term:



So you ideally echo back the words in the search term in the ad headline, and in the body of the ad.

If you get someone to click on your ad, then you need to quickly let them know that they are in the right place when they hit your landing page.

This is going to be performed with a big headline that also echoes back words in the search term.

If your landing page isn’t relevant, then the visitor will click the back button and you’ve just wasted money buying their click.


A Wide Funnel

If you are bidding on keyword dublin plumbers in broad match, then you’ve got a wide neck at the top of your funnel.

Your ad can appear for many different search terms, some intended and some unintended.

The top of your wide AdWords funnel:


Your ad is showing for lots of unintended searches.

You’re not going to get any work from people looking for search term plumber jobs dublin. You are wasting money on clicks for people using this search term.

You’re also not going to get any work from people looking for search term plumbing supplies, since they are probably other plumbers, or people who want to fix their own problems. Again, you are probably wasting money on clicks for people using this search term.

You cover the areas Rathmines and Blackrock within Dublin, but your ad CTR is not going to be as good as if your ad specifically mentioned those areas.

And your ad likely shows for many different search terms that are even less relevant and are just increasing your impressions and reducing your ad CTR.

If you ad CTR is lower than your competitors, then your cost per click (CPC) will start rising, and your impression share will start falling.

Meaning your ads show less often, you get less clicks, and each click costs you more.

Oh, and your landing page won’t convert as well since people were searching for lots of things other than “Dublin Plumbing Services”.

Many of these visitors are just going to hit the back button, so you have wasted money.

Which means your cost-per-conversion is climbing, so you have to reduce your bid prices to remain profitable.

Which means you lose traffic, until you get none at all, and your AdWords campaign has crashed and burned.


Lots of Narrow Funnels

The alternative is to create many small funnels that only show for search terms you want to show for, and where your ad is hyper relevant, and where your landing page promises them what they are looking for.

The top of your narrow AdWords funnels:


You now don’t have unwanted impressions or clicks from searches that are unrelated.

This improves your CTR, and reduces wasted spend.

Your ads are now much more relevant because they are tailored to each search term.

So your overall CTR improves even more.

If you can perform better than your competitors, then Google will reward you with a lower cost-per-click, and a higher impression share.

So your ads are showing more often, more people are clicking on them, and each click is costing less.

Your conversion rates improve since you’re now sending people to a landing page offering what they were looking for.

So your conversions increase, and your cost-per-conversion drops.

You can increase your bids and get exponentially more traffic. (Doubling your bid price typically results in 4x your click volume, so doubling your conversion rate can result in 8x your click volume.)

Your campaign is now up and running, and it’s a case of getting into a continuous cycle of optimising ad CTR, landing page conversion rates, repeat business and referral rates.

Ultimately, you are trying to increase your visitor life time value.

And every time you do it, you increase up your bids and your ads rise in position.

Volumes increase each time you increase your bids and conversion rates, and your campaign is going through the roof, instead of through the floor.

AdWords paid search can be real knife edge stuff.

New campaigns can keep dying off, no matter how much you push your bids.

But if you get it right, your campaign can hum and you can get into your continuous cycle of improvement.


Conclusion

When you’re using AdWords for paid search, stop calling what people typed in a “keyword”.

A keyword is what you bid on, and a search term is what they typed in.

Understand that when you bid on anything but exact match keywords, you are bidding on sets of search terms, and a lot of them are unintended, and a lot of them could have better ads.

Stop bidding on keywords, and bid on search terms instead.

This means that you bid in exact match (and set the campaign parameter to not allow close variants).

This will keep you out of trouble if you are getting started.

And is the start of optimising if you are already running.

If you can, create a separate ad group for each search term.

Be extremely careful of broad and phrase match keywords, as you are giving Google permission to show your ad for many different search terms.

Using broad and phrase match also gives Google permission to send your traffic to a choice of different ad groups within your campaigns. This can cloud any analysis you are trying to do, and can have unintended results when you amend bids or ad copy.

There is a place for broad and phrase match keywords, and for lead generation it’s mostly to find more search terms to bid on.

With the one-exact-match-keyword-per-adgroup structure, you’ll not only increase your ad CTR and conversion rates, but you’ll also be sending your traffic to the ads and landing pages you intended to send it to.


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Want to go further down the rabbit hole?

Read the next post.
You just turn the light on into my mind. Thanks a lot!
 
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Andy if you gave a tutorial on how to exploit excel to make intelligent bulk changes I'd pay for it
There's a couple of videos posted in my Brain Dump (4th link in my signature). I know that Vimeo isn't showing the "full screen" button... I'll work out how to fix that.

Once upon a time I had domain excelwithadwords.com, but I figured I should work on people's mindset first, before working on their skillset.

Sigh... So many "shut up and take my money" moments in this forum...
 

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There's a couple of videos posted in my Brain Dump (4th link in my signature). I know that Vimeo isn't showing the "full screen" button... I'll work out how to fix that.

Once upon a time I had domain excelwithadwords.com, but I figured I should work on people's mindset first, before working on their skillset.

Sigh... So many "shut up and take my money" moments in this forum...
I admit i lost money with Adwords. Until i discovered that the best ads are ads on google search not banners. Banners can be abused or have invalid clicks to get more money for the Adsense owners while google search ads are more safe.

But now with your advice things will go even better when i will start my add campaign.
 

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IGP

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I admit i lost money with Adwords. Until i discovered that the best ads are ads on google search not banners. Banners can be abused or have invalid clicks to get more money for the Adsense owners while google search ads are more safe.

But now with your advice things will go even better when i will start my add campaign.
You should always have 2 separate campaigns... one for the display network and one for search. Never put them in the same campaign!
 

Panamera Turbo S

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You should always have 2 separate campaigns... one for the display network and one for search. Never put them in the same campaign!
While is true what you say, the best advertising still remains S.U.C.S. when customers actually sell for you because you violate their expectations in the positive.
 
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Andy Black

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I really needed to read this. Thanks for the great info!
Thanks for reading and your feedback @Dat Le.

I talk about this common common mistake in the 70 min interview I did (linked to in my signature).
 

TheDillon__

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I'm just going to go ahead and give you all 800 rep I have.

What about when we're starting off and data mining, looking for the best search terms.

Again, take this back to the 1-hour/$10 test.

Should I run that with broad-match keywords, or choose my own exact-match terms?

My guess is to use broad match to screen for unforeseen terms like "electrician Kildare."


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Andy Black

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I'm just going to go ahead and give you all 800 rep I have.

What about when we're starting off and data mining, looking for the best search terms.

Again, take this back to the 1-hour/$10 test.

Should I run that with broad-match keywords, or choose my own exact-match terms?

My guess is to use broad match to screen for unforeseen terms like "electrician Kildare."


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Broad match is dangerous.

At least use modified broad match.

At the end of the day, try not to think in terms of keywords and match types, but in terms of sets of search terms.

Can you learn from the set of search terms? Is it tight enough?


I may add some lessons to my course on how to use AdWords to do real-time market research...

(Thanks for the rep.)
 

Brindas Andrei

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Great post @Andy Black.

This has just given me an idea.

Search for specific search terms, like "plumbing supplies (city)" and check out all the plumbers that use broad search.

After this, contact and let them know they are losing money on their ads. Of course, don't forget to tell them that you can fix their problem for them :D

Or, even simpler (or more complicated?), look for badly optimized ads, whatever that would be (bad copy, bad landing page, wrong search terms etc.), contact the owner, tell him he is losing money and let him know you can fix that.

Don't know how it would work out, but I'll try.
 

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