By Robbie Deighan on 4 Sep 2017
Limited budget. That word sends chills down the spines of digital marketers because budget, after oxygen, is our most valuable finite resource.
Even so, digital marketers are throwing away copious amounts of budget to show ads to people likely to click, but unlikely to convert. We optimise the performance of every cent of budget we’re allocated because we know that every cent drives performance.
Here are four ways you can reduce your wasted ad spend:
You’ve probably experienced that moment when you’ve searched for something and see a competitor ad or an ad for your own business. In the first case, it’s tempting to cost them a few cent. For the latter, you might click and only realise the terrible thing you’ve done as the page loads. You’ve just cost your own business 40 cent. That’s how easily wasted ad spend happens.
The best thing for it? If there are people or organisations you don’t want clicking your ads, simply don’t show them ads.
We recently created a campaign for an Irish third-level institution. After some forensic digging through their AdWords account, we uncovered where they were leaking budget. Using the college’s AdWords search terms report, we discovered people were clicking ads when searching for terms like “moodle portal” or searching for the student login page.
Students on the college WiFi were being served ads for years when trying to log into college resources and of course, they were clicking. Why wouldn’t they? It was the fastest way to access what they needed.
Everyone one of those clicks was contributing to wasted spend in AdWords when a free click just below would have done the same thing. The simple fix? IP Exclusions.
What is an IP Exclusion?
First of all, IP addresses are like fingerprints for internet connections. The example we’re going to give is a college WiFi network, but wired networks also have IP addresses. One physical location, like a college, could have several IP addresses.
An IP exclusion instructs AdWords not to serve ads on certain IP addresses. Two popular IP addresses to exclude are:
- Your business IP address (accidental or “lazy” clicks)
- Competitors’ IP address (malicious clicks)
Excluding your own business IP address has two key benefits. The first is eliminating accidental internal clicks. These are the ones where you click faster than your brain can process whether it’s an ad or a standard SERP result you’re clicking on. Blocking ads to your business IP also has the added benefit of not showing ads to employees who are likely to take the fastest route to your website. This route will often be through an ad, whether they know what they’re doing or not. This is a particularly good idea if you have a customer care team.
Google has taken huge towards eradicating illegitimate ad clicks which contribute to AdWords’ wasted spend and also offer an Invalid Click Report in AdWords. If this report is showing high volumes of legitimate click on your ads, it might be worth supporting Google’s efforts with a second layer of redundancy, excluding your competitors’ IP addresses too.
Pro-tip for IP Exclusions
After we uncovered evidence that students were clicking ads, we sprung into action. We asked our contact in the college to get the IP addresses of WiFi connections available for student use.
Here’s how to find out your IP address:
- Connect to the WiFi/wired network
- Google search for “what’s my IP address”
It’s that simple.
The college had four WiFi networks so the steps were repeated for each network, giving us four different IP addresses to exclude.
While not a key metric, here’s one KPI which indicates this method is working to solve a problem. Once we implemented the IP exclusions, Click Through Rate dropped by 9.5% parallel to an increase to conversions. This is largely down to the removal of student clicks.
Other Areas To Optimise
IP exclusions were the stand out success from our early days with the account, but remembering how valuable every cent is, we're not done yet.
It might sound obvious, but it’s critical that a starting point for your campaign is spending some time on negative keywords. By adding negative keywords you can remove searches including keywords that indicate a low likelihood of converting or in the case of the college, indicate a high likelihood they are a student.
The college’s Search term report was showing terms like “student portal” triggered Search ads and was another area where the college was wasting their AdWords budget. By adding terms like “student portal” as negative keywords, we eliminated additional sources of wasted ad spend.
Typically, there are two things a digital marketer will immediately think of when they hear of a new targeting feature in AdWords:
- Use it for targeting an audience likely to convert
- Use it for excluding an audience unlikely to convert
When you hear Customer Match, of course, the first thing you’ll think of is being able to target potential leads. This feature lets you upload email addresses to AdWords and then target these users as an audience. If you have an existing mailing list, that’s a great audience to create.
But what if we use the same methodology to exclude people?
With a list of student email addresses, we were able to remove them from advertising campaigns. This further reduced the likelihood of existing students seeing ads, even when they weren’t using the college WiFi network.
Cookie Based Exclusions
As we work to improve the immediate performance of the account, we also have one eye on the next optimisation that we’ll make. Each individual component of our efforts to reduce ad spend wastage has performed well, but when these methods become an interweaved mesh of exclusions, waste of budget is reduced even further. The sum is greater than its parts.
Our next optimisation on the account will be cookie based exclusions. Cookies are small files stored on people’s devices which maintain a record of, amongst other data, the sites they’ve visited. This means we can attribute a cookie to students who reach the college’s student portal login page. In AdWords, once we have distributed 1,000 cookies, we can use this data to build an audience, safe in the knowledge these are students.
With this audience in hand, we can further reduce the amount of ad spend wastage being caused by student clicks. Every user who visited the student portal page will be excluded from seeing our ads This will reduce our overall spend on clicks, leaving more budget for clicks that earn our client valuable leads.
The Impact Of Reducing Wasted Ad Spend
By paying attention to how your money is spent, you’re increasing your opportunities. By increasing the quality of ad impressions you’ll spend the same money while getting clicks more likely to convert. This also means an improved Quality Score which trims even more of your wasted ad spend.
If your Average Cost per Acquisition is reduced by 10% you can now afford 11% more conversions with the same budget. Prior to these optimisations, your budget would run out before these additional leads even saw your ads.
By applying these techniques we achieved a:
- 15% reduction in Cost per Click for Search Campaigns
- 54% reduction in Cost per Conversion
A couple of quick calculations later, we concluded that our work on the account stretched our clients budget, generating 115% more conversions than the previous month.
The Wolfgang Essential Takeaway
Every cent of your ad spend budget is sacred. Relatively simple optimisations that reduce non-converting traffic will get you more bang for your buck, increasing your volume of conversions, reducing your Cost per Conversion and ultimately boost your Conversion Rate.