Over 70% of large pay-per-click (PPC) accounts are infested with budget leaks – where ad spend goes on low-quality clicks and impressions which provide no value. These waste the same budget which could have generated high-quality leads and sales.
Budget leaks slow performance and returns significantly. In accounts which spend over $10,000 per month, leaks can easily result in thousands of avoidable wasted ad spending every year.
Plugging these budget leaks improves conversion rates and enables the account holder to scale spend effectively. Fixing leak problems has been shown to increase return on ad spend by over 20% in the first year in a number of cases.
Diagnosing the Source
There are a few common elements which typically cause budget leaks in large PPC accounts. These include:
- Poorly performing ad groups with high impression or click volume
- Broadly match keywords which generate irrelevant traffic
- Poor device or location targets which attract low-quality traffic
- Outdated tracking not attributing conversions properly
Pinpointing the exact source of budget leaks requires some investigation. However, the place to start is by reviewing account pacing reports, in order to identify ad groups with high spend but low conversions. Bt going through recent change logs you can see what adjustments may have preceded drops in performance.
Checking search term reports will identify query mismatches deriving from broad match keywords. Reviewing location and device reports will identify targets which overspend. Audit tracking will confirm where there is proper attribution at ad group level.
Following these steps will enable you to zero in on the specific areas, keywords, or targets which are causing spend without returns. This informs the development of the correct solutions for these budget leaks.
Inaccurate Keywords Analysis
Budget leaks often derive from broad match keywords triggering irrelevant search queries. By carefully analyzing your search term reports you can identify queries which have no relevance to your products, services or conversion potential. Implementing tools like Google Smart Bidding can further enhance your efforts to focus your budget on high-performing keywords and prevent wastage on irrelevant queries.
For example, a broad match keyword like [steel manufacturing] may be matching to informational queries such as “history of steel manufacturing” which drive no value.
These “rogue keywords” create irrelevant clicks and thus waste budget. They should only be included as exact or phrase negative keywords, whilehigh-value converting keywords should be moved to more restrictive match types like phrase or exact match.
Applying tailored negative keywords prevents wasted spend from rogue search queries which have no chance of creating conversion. Tightening relevancy with match types focuses budget on queries which relate to user intent and business outcomes.
Applying this rigorous search term analysis monthly will continually optimize quality score, improve ROI and plug new sources of budget leaks at the keyword level.
Device and Location Assessment
Evaluating performance by device and location will also uncover wasted spend. Reporting can be reviewed to quantify conversions and conversion rates by device, operating system, country, region and city.
By comparing clicks, impressions and cost you can identify targets which overspend for the conversions they provide.
For example, you may find iOS has a much higher cost per conversion than Android, or that a particular metropolitan area consumes budget but doesn’t convert well.
Adjusting these misaligned location and device bids and targets will curb some budget leaks. You can reduce bids for locations or devices which cost too much per conversion, set tighter radius targets for low-potential regions and turn off poor performing operating systems.
Location and device targets should be continually optimized as data and conversion potential shift over time. By aligning these directly to converting performance, you plug budget leaks deriving from overspending on low-conversion targets.
Refining Campaign Targeting
Take a critical look at your ad group, campaign, and account targeting settings. Over time, these targets can become too broad or outdated and cause budget leaks.
By reviewing previous A/B tests and performance reports you can identify winning combinations of demographic, interest, behavioral and placement targeting. Look here for outdated or irrelevant targets which lack the conversion history to support them.
For example, a custom affinity audience from years ago may no longer be relevant or a placement targeting expansion may now be attracting unsuitable content sites.
Tightening up targeting will remove outdated, irrelevant or too broadly-defined audiences, placements, keywords and other targets. You can then align your targets directly with your best-converting customer segments, informed by performance history and ongoing testing.
Continuous campaign targeting refinement focuses budget on well-defined segments with the highest probability of conversions. This prevents wasted spend from chasing audiences, sites and searches with low relevance.
Dayparting Adjustments
Looking at performance by day of week and hour will identify low-quality periods. Often weekends or late nights see more irrelevant browsing which converts poorly.
Use your account reporting to analyze clicks, spend, conversions, and conversion rate by day and hour. Find underperforming zones with higher than average clicks and spend but lower conversion rates.
For example, if Saturdays cost 20% more per conversion, you could set lower bids and tighter budget rules for ads which display on Saturdays.
Dayparting enables you to optimize your resources for times which drive more qualified traffic and higher converting users. You can then dial back budgets for poor performing days and hours which contribute excessive low-quality clicks and impressions.
You should regularly update your dayparting settings based on the latest performance data from your reports. By continually adjusting for daily and hourly patterns, you can cut budget leaks from low-quality time periods.
Countering the Activities of Bad Actors
Bad actors like click farms and competitors can deliberately drain budgets through generating low-quality clicks. By scanning your IP address reports you can detect suspicious patterns here.
Look for IP addresses associated with repeated single-user actions like searches without conversions. See if any originate from suspicious regions for your business.
If you identify IP blocks generating lots of impressions or clicks without corresponding conversion value, you can then systematically block these low-quality IP addresses via your account exclusions.
For example, a retailer once plugged budget leaks by blocking a single bad actor IP address, responsible for over 35,000 conversions-less clicks per month.
Make weeding out nasty IP addresses part of your regular hygiene system. Continuously scan recent IP histories for evidence of deliberate budget sabotage or waste. By severing access to these through exclusions, you reclaim the budget lost to bad actors.
Ongoing Maintenance
Plugging budget leaks requires diligence over time. By implementing proactive change monitoring, you can catch emerging issues early.
You can review account change history every 2 weeks to identify adjustments preceding performance drops. You should also scan daily for changes made in ad platforms outside your system.
You can set up custom alerts to identify changes in conversion tracking, rapid budget burns and dramatic performance shifts at the campaign and ad group levels. You can also create automatic blocks for common low-quality IPs, suspicious search queries and consistent non-converters.
Make small, iterative changes of this nature consistently to avoid major volatility. Test new targeting cautiously before expanding budget exposure.
Budget leaks can reopen over time, as changes roll out or accounts scale. By maintaining constant vigilance through change monitoring, staged testing and alerts you can prevent new leaks. Ongoing refinement minimizes wasted spend, ensures the scaling budgets driving ROI and generates high-quality clicks and conversions across accounts.
Conclusion
Budget leaks severely hurt performance by wasting crucial spend. Preventing them requires:
- Pinpointing low-quality areas via reports
- Tightening targeting with negatives and exclusions
- Realigning to proven converters
- Change monitoring through alerts
- Incremental testing before committing spend
By taking the actions suggested here, all these steps can be taken. Such ongoing
precision targeting and optimization prevents waste and generates more high-value impressions. This in turn fuels performance momentum through lowering costs and enhancing conversions, and makes accounts sustainable long term.
