20 AdWords Mistakes eCommerce Owners Need to Stop Making Now
Pay per click advertising is one of the quickest ways that you can get targeted traffic to your eCommerce store and start generating sales.
It’s also one of the quickest ways you can flush money down the toilet.
Google AdWords remains one of the mainstays in the eCommerce pay per click landscape. But it’s not always peaches and cream.
The lure of thousands of visitors per month tempts many new eCommerce businesses into rushing into Google AdWords without proper knowledge, strategy or optimization.
I know, I’ve been there. I learned the hard way. In my first eCommerce expedition, I literally threw tens of thousands of dollars down the AdWords vortex with little result.
The unfortunate result for many business owners is that when they lose initial money on a traffic source they write it off with comments like “I tried that and it didn’t work for MY business” as if their business is special or unique.
Google AdWords works for all eCommerce businesses. It can and will work for your eCommerce business.
If you are in the same place that I was years ago, unhappy with your return on ad spend, the first step is making an assessment of where you are at and identifying the steps needed to get the good ship AdWords back on course for your business.
This post is going to help you work out where you are potentially falling down and start you on the road to where you want to be.
For a more comprehensive, step-by-step guide on using AdWords for eCommerce, be sure to check out our AdWords for eCommerce Training course!
Here’s where to start.
1. Know your numbers
eCommerce business owners often overspend on AdWords because they don’t have a good understanding of their businesses numbers and how this relates to AdWords budgets and bids.
Can you answer these questions easily;
- What is your average order value?
- What is your average profit margin
- What is your website’s conversion rate?
- What is your customer lifetime value?
- How much are you currently paying for a click on AdWords?
- What is your target cost per click (CPC) for a profitable sale?
- What is your target return on ad spend (ROAS)?
How did you go?
If you don’t know the answer to all of these questions (and don’t feel bad if you don’t) then you have a little bit of work to do.
For more help knowing your eCommerce numbers, feel free to check out our Data Analytics for eCommerce course. It’s a fantastic resource to help you learn more about your eCommerce business and begin scaling your numbers in every stage of the buyer’s journey.
Knowing and understanding these numbers and how they relate to your AdWords bidding and budgeting is key to success with AdWords (and any PPC platform to be honest).
Consider the following scenario;
I know that my average order value is $500 and my average net profit before ad spend on that sale is $200.
If traffic from my Google campaigns converts 2% (more about this later) then I know that I need to pay for 50 visitors to my site to get 1x $500 sale with a net profit of $200 before ad spend.
If I am prepared to pay up to $50 of my $200 net profit to make that sale I know that I have $50 to spend to get the 50 visitors to my site to produce that 1 sale.
So if I divide 50 visitors by $50 I know that I can spend $1 to put a customer on my website. Therefore my target CPC is $1.
If I spend more than this I will miss my target, if I spend less…happy days.
This is a simple model to get started. The picture becomes a little more complicated/more accurate when you consider customer lifetime value but we’ll get to that in point 19 of this post.
2. You aren’t using Google Shopping
Ok so this may seem like a no-brainer on the surface but we do come into contact with a lot of eCommerce store owners who aren’t currently utilizing Google Shopping Ads.
The most common reason I have heard goes back to “I tried that and it didn’t work for MY business”.
Avoiding Google Shopping is a mistake. Yes, there are exceptions but for the vast majority of eCommerce businesses, Google Shopping provides an excellent avenue for getting your product in front of a group of relevant potential customers.
The reason most people don’t find success with Google Shopping is that they are not running campaigns that are optimized to their potential customer’s behavior.
And that’s not surprising as it’s not as obvious how to optimise Google Shopping as search text ads.
The AdWords side of Google Shopping appears relatively easy at first glance, Google does most of the work for you and you don’t need to worry about setting keywords or ads etc.
The downside of this is that it’s easy to fall into a false sense of security and it’s not as obvious as to how you go about optimizing the ads.
The good news is however that once you possess the right knowledge and have a bit of practice, optimizing Google Shopping is not difficult at all and can, in fact, produce stellar outcomes.
Points 4, 5, 6, 7, 8, and 17 will give you further insights into how you can improve your Google Shopping results.
3. You aren’t using Remarketing
The average eCommerce customer will visit up to 9 times before they make their first purchase. Very few first-time customers will purchase one their first visit to your site.
The number of visits and time elapsed from the first visit to purchase increases as the value of the purchase increases with high ticket items $1000+ almost always requiring multiple visits before the first purchase is completed.
What this means is that you need to stay top of your customer’s mind while they are considering their purchase.
You need to remember that your customer is considering not just which product to buy next but also WHO to buy it from.
Remarketing is the solution to the WHO part of that equation.
Effective remarketing is the key to your business staying top of your prospective customer’s minds until they are ready to make a purchase. Remarketing gives you an opportunity to get in front of your competitors.
Google AdWords provides a suite of retargeting options that all eCommerce stores should use. You may well be familiar with retargeting on the Google Display Network but did you also know that you can retarget past visitors using Search Text Ads?
At a minimum you should be using the following Google remarketing options;
- Dynamic Remarketing (Display network)
- Remarketing Lists for Search Ads (RLSAs)
- Display Network Remarketing (not Dynamic)
You can use these options to target the following;
- Cart/Checkout Abandoners
- People who visited specific pages but didn’t purchase
- Previous customers (using customer email list)
- Customers who have just made their first purchase
- People who have interacted with your Youtube videos
We won’t go into how to set up each of these types of remarketing in this post (it would turn into a book) but your first step is to check your account to see what remarketing you currently have set up.
4. You aren’t using negative keywords in Google Shopping
Google Shopping ads differ from search text ads in that you don’t actively set target keywords for Google to show your ads to.
Instead, Google matches your products with search terms that they believe are relevant when their searchers make them. Generally, Google does a good job of this but sometimes they miss the mark.
Negative keywords are our way of guiding Google and making sure that our ads are only showing for relevant search traffic.
If you don’t have any negative keywords set in your Google Shopping campaigns it is almost 100% likely that your ads are showing to some traffic that will either never click your ads or never buy from you.
This is a problem as low CTRs affect your overall performance and a low conversion rate means you could be losing money.
Check your negative keyword lists today and make sure that you are a) using them and b) that they are up to date.
Keyword targeting for Google Shopping
Did you know that you can actually target keywords in Google Shopping?
This piece of knowledge is a breakthrough for many eCommerce business owners.
Keyword targeting is one of the most significant ways to reduce costs, increase CTRs and increase ROAS for Google Shopping ads.
But you don’t do it in the same direct way that you do for search text ads. You don’t actually “set” target keywords.
Instead, you reverse target keywords by telling Google which search terms you don’t want to show for. Using Negative Keywords.
If you tell Google what keywords you don’t want your ads to display to then you are effectively telling them which search terms you do want your ads to display to.
Having this level of control over your Shopping ads can drastically reduce your costs and increase your return on ad spend.
5. You aren’t using a funnel method for Google Shopping
Once you have been exploring the search term report for your Google Shopping campaigns you will notice that there are a broad range of different search terms that your ads are showing for. Some will seem very relevant and others will be broader and less relevant.
You could easily group search terms into the following categories;
- Generic. E.g. coffee table
- Product specific. E.g. brown wooden coffee table
- Brand specific. E.g. Freedom Furniture coffee table
- Brand & Product specific. E.g. Freedom Furniture brown wooden coffee table
If I sell coffee tables then each of these categories is going to be relevant to my business. But are they all as relevant as each other?
Is each of these categories as likely to convert to sales as each other?
If was selling coffee tables would I be prepared to pay the same amount for someone searching “coffee table” to come to my site and someone who is searching “Freedom Furniture brown wooden coffee table”?
Well, if I’m selling a brown wooden coffee table made by Freedom Furniture then I definitely want to make sure that I get as many people making the last search as possible. I would be prepared to pay the maximum I can profitably do to get that person to my site
On the flip side, while “coffee table” is still relevant to me, there are a lot of coffee tables on the market and maybe that person isn’t interested in the type of coffee tables that I have. They might convert but the chance is much lower than the Brand & Product specific term. So, therefore, I don’t want to spend as much to get them to my site because I will need more of those visitors to make a sale.
If you are running a single campaign, single ad group strategy with Google Shopping it isn’t really possible to prioritize one type of relevant search term over another.
Nor can you choose to bid more for one type of relevant search term over another.
You can just choose the binary option of yes/no for your ads to display for individual search terms.
It is possible however in Google Shopping to develop a multi-campaign, multi-ad group “funnel” to prioritize one type of relevant search term over another.
The benefits of doing so can be;
- Lower cost per acquisition (CPA)
- Advantage over competitors via lower CPA
- Higher search impression shares
- Higher overall CTRs
- Improved profit
There are different Shopping funnel methods that you could implement depending on your market and the search behavior of your visitors.
What is important is that you start implementing a Shopping funnel today.
6. You aren’t using Google Analytics to help you measure your results
Google AdWords has a pretty good reporting interface compared to most PPC platforms. You can get a lot out of it.
It does, however, pale into insignificance next to Google Analytics.
While most people know that Analytics provides the complete view of all of your websites traffic many people are unaware of the specific AdWords and eCommerce data that it can provide.
Effective use of Analytics alongside the data provided by AdWords will enable you to make the most informed decisions and assumptions about what is working possible. This, in turn, will help you decide where and how much to spend to get the best possible result.
Analytics can be overwhelming but even if you only use a quarter of its potential regularly you will be in a much better place than if you don’t use it at all.
Want to know where to get started? Check out this great video we put together to help you get started. In the description, you will find a link to a Bonus FREE AdWords Campaign Report download that you can use in your account. It’s the same one that we use in our own stores!
Also be sure to check out our Data Analytics for eCommerce course for even more great reports, tactics, and strategies on using data to scale your eCommerce business.
7. You don’t understand your competition
Google AdWords and Google Shopping in particular are at their heart comparison engines for consumers.
Searchers will see your ads directly next to those of your competitors. They will be comparing your message at the same time and in the case of Google Shopping will be comparing your price, shipping cost, reviews, and promotions on the same page.
If you don’t know what your competitors are doing you are already losing.
Either you or one of your employees needs to be regularly checking what your competitors are up to on whatever platform you are competing on.
If you are running Shopping ads a great way to do this is to search for your ads in the wild as a customer would (this works best if you are selling the same product as other people).
Cut and paste one of your product titles into the Google search bar and see what results are shown in the Google Shopping box.
Find your products and see who they are being compared against. Click down to see the more detailed comparison and using your customer’s eyes think about how your ad presents.
Are you prices competitive? Is your shipping cost in the right place? Do your competitors have far more reviews than you?
Being behind on any one of these factors can significantly reduce your performance on Google Shopping.
Identify the areas that you are lagging on and get to work on those.
If you are running search text ads, have a search for some of the main keywords that you are targeting. Pay attention to the text ads being run by your competitors. Once again try to put yourself in your customers position.
Are they using ad extensions and what are these? Is their ad copy more enticing than yours and how? Are they offering a specific promotion?
Once again if you can find areas that you feel your are lagging behind your competitors start thinking about how you can improve your ads based on this knowledge.
Here’s a helpful video we put together on why your offer and your website could be holding your PPC ads back.
8. You have a website conversion issue
Ok, I get it. As eCommerce store owners we all have a conversion issue…In that, we always want more!
Lame marketing jokes aside, I often hear people say “I ran ads but they didn’t convert”.
It’s easy to form this impression but often the focus is in the wrong area. In my experience more often than not the ads are on target (or close to it) but the website sucks.
This can be harder to admit, particularly if you build your own website.
Remember, the purpose of any traffic channel is to get the right traffic to your website at the right time (when they are ready to buy or close to it) for the right price.
If you have the right traffic coming to your website the rest is up to your website and/or your customer service to convert that visitor into a customer.
If the right customer gets to your website and has a bad experience it wouldn’t have mattered how great your ad was.
Have a look at our Perfect eCommerce Product Page System to learn more about increasing your website’s conversions.
9. Single Campaign. Single Ad Group. Single Ad. Many Keywords
If you are running search text ads (and you should be) there is a good chance that you have fallen into the trap of having too many keywords in each ad group with a single ad. It’s where many people start and it is costing you money.
The emphasis here is on “many keywords”. There is a time and place for having Single Keyword Ad Groups (SKAGs) which we will touch on at number X.
Search text ads work best and are at their most cost-effective when there is a high congruency between the ad, the keyword targeted and the landing page that the ad leads to.
If you have a lot of different keywords targeted by a single ad and leading to a single landing page then it is unlikely that for most of those keywords you will have a satisfactory level of congruency.
The result of a low level of congruency will be a low-quality score and you will pay more per click than you need to.
Here is what a high keyword to ad group ratio will produce;
- Low-quality scores for many keywords
- Higher than necessary CPCs
- Depending on bidding lower ad position
- Low Click through Rates (CTR) for many keywords
The above 4 points are things that you definitely want to avoid and will have a negative impact on your return on ad spend.
A similar effect will be caused in Google Shopping if you are running a single campaign, single ad group, single product group model (with the exception being if you sell a single or small number of products).
Here’s a few more things you can consider to lower your CPA.
10. You aren’t split testing
If you are running text ads, display ads (including remarketing) or Youtube ads, you need to be constantly testing different ad content.
Even slight differences in the copy of a search text ad can have a dramatic impact on CTRs, conversion rates and CPCs.
I like to look at split testing as a game where you are constantly trying to beat yourself. Yes, split testing is more time consuming but the results are worth it.
Here’s the basic approach to split testing;
- For a new ad group set at least two ads
- Each ad should be the same except for one area. E.g Different headlines.
- Make sure that your ad rotation settings are set to rotate indefinitely (Google tries to discourage this, ignore them). This means that both ads will get more or less the same number of impressions. This is essential for a test.
- Let the ads run for a few days at least.
- Check the results over that time period.
- Pick a winner. The winner will usually be the ad that drove the most conversions at the lowest cost but you may take into account things like CTRs as well.
- Delete the loser(s)
- Write a new ad to test something different.
- Rinse and Repeat.
Two key aspects of successful split testing in Adwords are;
- Split test 1 change at a time. E.g. Don’t split test a heading change and a description change at the same time. How will you know what impact each change had? Just test the Headline change, then test the description change.
- Give your test time to play out. You need to get a decent amount of eyeballs on your tested ads to make a call. 100 impressions aren’t enough. Aim for at least 1000 before you make a call.
11. You aren’t using Ad Extensions
Ad extensions are additional chunks of information about your business that can display below the main body of search text ads.
There are different types of extensions to encourage the viewer to take different actions. Here’s the current list;
- Sitelink Extensions. Adds a description and link to a specific part of your website. You can display up to four at once.
- Call-out extensions. Adds a short call to action for viewers. E.g. “Free Shipping”
- Structured Snippet extensions
- Price extensions. Adds category or product pricing info to your ads so shoppers can see your products directly in your ad
- App Extensions. Encourage people to download your app if you have one.
- Message Extensions. Encourage people to send you a text message straight from the ad
- Call Extensions. Lists your business phone number in a clickable fashion so that people can call you directly when viewing the ad.
- Location Extensions. Shows your business location and a link to your Google Business page where people can see your hours, phone number etc.
- Affiliate Extensions. Shows other places where people can buy your products if you wholesale.
Not all extensions are available in all countries and not all extensions will be relevant to your business.
At a minimum, you should be using;
- Sitelink Extensions
- Call-out Extensions
- Call Extensions
Ad Extensions are a must for a few great reasons;
- They are shown to increase click through rates by up to 30%.
- They allow you to take up more space on the results page. This is a huge advantage if your other competitors aren’t using extensions. Your ads will look bigger.
- It gives customers additional ways to get to what they really want quicker. This, in turn, can increase your conversion rates.
Setting up Ad Extensions is pretty straight forward. When you start a new text ad campaign you will be given the option to add them in the setup process.
If you want to modify or add extensions to an existing campaign simply navigate to that campaign and click the “Ad extensions” tab.
You’ll notice here that Google give you individual stats for each extension. This is great as it gives you the ability to test extensions and see what works best.
Now once you’ve set your extensions don’t freak out if you don’t see them appearing with your ad.
Having extensions set doesn’t make them automatically appear. Google will choose when to show them and which ones to show based on their understanding of the individual searchers behaviour. For example they will usually show call extensions to mobile searchers because it is easier for them to click on and use that extension. Whereas showing the full list of site link extensions is more likely on a desktop search.
12. You are sending traffic to your home page
There are very few occasions where it is appropriate for any of your ads to land your visitors on your home page.
One exception is covered in the next point (13) but if you are running ads that promote products or categories of products you should never land people on your homepage.
The goal of your ads and your website is to get the right person to your checkout page in the fewest amount of steps possible.
Every step you place in the way will reduce the number of people who follow through to checkout.
So go ahead and double check all of your ad to make sure that no one is landing on your homepage. Your visitors should be landing on the page of your website that is the most directly relevant to their search query. The majority of the time this will be a collection, product or blog page.
13. You don’t have a Trademark Campaign
Following on from our last point, there is one situation where you should definitely be sending people to your home page.
We call this a Trademark Campaign. It is basically where you are advertising on your own name. This becomes important as you grow and your customers become more familiar with your brand.
People will start searching for your business name. Yes they should be shown and organic listing for your website but there is still space above that for a search text ad or two. You want to be filling the top spot.
Why? Because if you don’t someone else may. There is nothing to stop one of your competitors targeting your brand as a keyword to try to divert customers away from your website with text ads.
Yes, Google does have trademark rules in place that can prevent some from using your brand name in ad copy but this only applies if you have trademarked your brand name and Google won’t stop people from using your brand name as a keyword.
At the end of the day it’s also nice to take up as much of the first page as you can. Never underestimate the chances for customers to get distracted. Get in peoples face as much as you can.
Here’s an example of a trademark campaign in action.
You can see the trademark ad at the top sitting above the organic listing for the same site.
Setting up these campaigns is very straight forward. They are just a regular search text ad with your brand name as exact match keywords. Make sure you use ad extensions and call outs to send people to the relevant sections of your website.
14. You haven’t checked your ad account in a month
Ok so this is a simple but it happens. Many people think that Google ads are “set and forget” advertising. It’s not.
Not keeping a regular eye on how your ads are performing is a recipe for you to be paying Google far more than you should be and most likely missing out on sales along the way.
15. High SKU numbers but no Dynamic Search Ads
Having a search text ad for every product in your inventory would be nice but what if you have 3000 products? It’s rarely going to be feasible to get that granular and take individual ads to the individual product level.
Dynamic Search Ads (DSAs) provide somewhat of a solution to this problem.
DSAs appear as search text ads but how they are generated is somewhat different.
There are no keywords set for DSAs and nor do you set an ad headline.
Google takes a feed of the pages on your website and then matches these to search queries made by searches. In this way, DSAs are more similar to Google Shopping ads.
When a close match is found Google will show an ad with a dynamically generated (meaning that Google generates it) headline that matches the search term and the relevant page.
So if you have 1000s or even 100s of product pages DSAs provide a way for individual product pages to be linked to an ad and shown to very specific search queries without having to go through the work of setting up 1000s of ads.
To get started with DSAs all you need to do is start a new search text campaign and select Dynamic Search Ads on the first setup page.
You then need to choose whether to use the Google index of your page as the source or whether to set your own url feed.
If your site is well indexed by Google then using this as an option is fine. If your site is very new however and hasn’t yet been fully crawled and indexed you may want to submit a feed to get up and running quicker. Here are Google’s instructions on how to do that.
16. You aren’t adding urgency to your text ads
Adding urgency to your text ads is a sure fire way to increase CTRs and conversions.
One of the best ways to do this is through the combined use of an offer (e.g. a discount) and a countdown timer.
Did you know that you could add a countdown timer to a text ad? You can and they are really cool, here’s what one looks like.
To get this happening in your search text ads you will need to use an AdWords Script (outlined in point 17).
Sales, promotions and offers aren’t usually things you want to have in every ad all the time. They should be used strategically for maximum affect. But you should use them, used correctly they can make a huge difference to your bottom line over time.
As an added bonus, most of your competitors are doing this so it’s another way that you can grab a competitive advantage. We doesn’t love that!
17. AdWords Scripts?
Ok, I admit that this one is a bit more of an advanced topic.
Many advertisers that use Google AdWords are not aware of the AdWords Scripts feature.
A script is like a little program that you can set to carry out a helpful task for you that would otherwise be repetitious or take up time that you could be spend doing other things.
Sounds good, but what can you actually do with Scripts? There are so many things that you can do with Scripts but here’s a little taster;
- Analyze your accounts Quality Score in detail and track your historical Quality Score over time
- Track your competitors performance over time
- Allow you to set hour by hour bid modifiers throughout the day (Adwords only allows 6 bid buckets per day).
- Set keywords for your Google Shopping campaigns to show for (Yes you read that right).
- Adjust your bids based on the weather (Yes I’m not joking and shopping behaviour does change based on the weather)
To set a Script all you have to do is visit the Bulk Operations option in the left side navigation (down the bottom of the nav) and click “Scripts”
Scripts aren’t necessary for new AdWords accounts with a low spend but as your accounts grow they become more important to help manage the increase workload. I think it’s worth getting familiar with them early and have a little fun along the way.
18. You aren’t using SKAGs
Sexy acronym hey? Single Keyword Ad Groups refers to using a search text ad group with two ads (split test) to target a single keyword.
There are some great reasons why you should do this;
- You ads will be highly targeted to the keyword which will result in much higher CTRs
- You will be able to select a landing page that is also super targeted to your ad and keyword which will result in an increase in conversions
- Finally putting the two points above together you will be able to maintain a high quality score for that keyword which will help you get great ad position and a lower cost per click, which increases your profit.
Ideally, you would have an ad group for every search term that could possibly be relevant to your products but that would be crazy overkill.
I recommend you identify that top 5% of keywords for your website when looking at conversions and clicks and start by implementing SKAGs for those.
If you have an existing active account you will already have a wealth of keyword data from your existing Shopping or Text Ad campaigns. Start with that.
If you are starting up a new store a little bit of keyword research will put you in the direction of a handful of keywords to start this approach with.
19. Taking a short term view and ignoring CLV
It’s very easy when analysing your efforts on AdWords to only consider the first conversion per customer that your ads have generated.
An equation like “I spent $X dollars in X days and it resulted in X sales in that timeframe”.
That’s an important set of data to be considering but it does miss the bigger picture.
As RJMetrics found 32% of buyers will make a second purchase from you within 12 months and 5.48% will purchase from you 6 times.
Often with repeat purchases, there is not a direct marketing cost. You might reach people via emails to your customer list or your customers may come directly to your website. Once you’ve paid to acquire a customer you don’t have to pay the same amount to sell to them again.
If you’ve been in business for some time you should be able to consider your average Customer Lifetime Value (CLV) and use this to also measure the effectiveness of your marketing budget.
Consider this; if I pay $20 on AdWords to make a sale of $300 with a margin before ad spend of $50 it looks ok.
But if I know that I will sell to that person twice in 12 months without them clicking on an ad again the margin might look like I paid $20 on Adwords to make sales of $600 with a margin before ad spend of $100.
That’s a much prettier picture. And I would evaluate the effects of my advertising efforts in a different light when viewing them in this way rather than just the first direct conversions from my ad.
20. No YouTube Ads
YouTube is the second largest search engine behind Google. Over 100 hours of new video is uploaded to YouTube every minute and the social platform has over 1 billion users.
It’s no secret that video is huge at the moment. Are you taking advantage of it?
Here are a few great reasons in favor of advertising on YouTube;
- The barrier to entry is seen as high by many eCommerce businesses. People think it’s hard to develop the ads. This is an opportunity for you. The field is still more open than other AdWords options.
- The CPCs are usually significantly lower than say search text ads.
- There are a number of targeting methods available outside of plain keywords. For example, you can target based on a topic.
Developing video ads for YouTube is definitely more involved than running a Shopping campaign or setting a few search text ads. But don’t let that put you off, with a little perseverance you can get a great outcome.
Remember, you aren’t producing Game of Thrones here. You can record a great video ad on an iPhone, or, you can just outsource it.
Here’s are few content ideas to help get you started;
- A how-to video that demonstrates a problem that your product(s) solves.
- A demo video of your product in action
- A testimonial video of someone who uses and loves your product
If you haven’t tested YouTube ads yet I strongly encourage you to. Just get started and improve as you go.
How did you stack up?
Don’t worry if you are missing out on a lot of our 20 points above. These are all things that can be implemented relatively easily and with a little testing can dramatically improve the performance of your AdWords account.
For a more comprehensive, step-by-step approach to learning Adwords for eCommerce, be sure to check out our AdWords for eCommerce Training course.
Having issues we did not address in this post? Share it below in the comments and we’ll all pitch in to help you out.