How to Tell if Your Google Ad Campaigns are Performing Well or Tanking Your Business

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Anyone can create a Google Ad campaign; the trick is getting that campaign to be successful. But how can you tell? This article will explain in detail the things to watch for within your Google Ad campaigns that may be secretly tanking your business.

How to Tell if Your Google Ad Campaigns are Tanking

The following categories are areas within your Google Ad campaign that can cause your campaign to fail if they are not performing well. For best practices, you should go through all of these areas to make sure your campaign is successful.

  • Ad groups
  • Keywords
  • Ads
  • Budget
  • Landing pages
  • Ad schedule
  • Audiences

How to tell if your ad groups are performing well

  1. Look at your CTR

Your click-through-rate or CTR tells you how many people clicked on your ads compared to the number of people that were shown your ads. This is shown as a percent value in Google Ads and while it can vary depending on the types of ads you are running, anything above a 2% CTR is generally considered to be a good CTR. For video ads this number is typically lower and closer to 1% but a general rule to follow is that the higher your CTR the better.

If your click-through-rate is low, this tells you that your ads are not performing as well as they should. A new image or a change in wording may be needed to generate more clicks. However, if your CTR is good but your conversions are still low that is an indicator that your landing page itself is likely not up to par. A high click-through-rate and low conversions tells you that people are going to your website and then not making a purchase so some changes may be needed to increase the conversion rate of your landing page.

  1. Watch your spend and your ROAS

Your ROAS is quite possible the most important number to look at regarding the success of your campaign, but your spend and budget shouldn’t be underestimated either. Typically you want to keep your ROAS at a 4-5 or higher depending on your campaign goals. The higher your ROAS, also known as your return on ad spend, the more successful your ad campaign will be. There are a lot of factors that can effect your ROAS, so it is best practice to look at this number as more of an overall indicator and then go into each of the categories listed here to make improvements. These improvements should reflect themselves within your ROAS.

Spend and budget are sometimes hard to determine, there is no one size fits all or right answer on what your budget and spend should be. It is generally best to start your budget low with new campaigns and then raise it as your campaign performs well to increase traffic. However, you may also need to drop your budget down if your campaign starts underperforming. There are a lot of reasons that a previously successful campaign could start dropping, which is why it’s important to check on your campaigns regularly. Dropping a budget down or in extreme cases drastically cutting it can shock your campaign back to where it needs to be.

Regardless of what your budget is, keep a close eye on your spend. This is the amount of money your campaign actually used, regardless of what your budget may be. If your ad group is spending too much money you could have a high ROAS but still be tanking your campaign. This is another area that is a little more trial and error than exact science, but making sure your campaigns aren’t over-spending is important and can save you tons in the long run.

  1. Watch your cost per conversion

When your campaigns are spending too much money, it causes your cost per conversion to sky-rocket. This is important for a number of reasons, but the most important one being your bottom dollar. If you are selling a product for $25 but your cost per conversion is $28, that means that you are paying $28 for every conversion you get. If the net profit of that conversion is $25 (which it’s usually not because of manufacturing and shipping and other related costs) you’ll still be losing $3 for every sale you make that comes from your ads. This is obviously a very bad thing. Keeping your costs low so that your ROAS can stay high while still earning you a profit from your conversions, because after all that is what advertising is for, is possibly the most crucial step in ensuring campaign success.

  1. Are all of your ad groups performing to the same level?

If your campaigns are anything like the ones that I manage on a daily basis, you’ll have some ad groups that perform really well and some ad groups that just don’t pull their weight. When determining which ad groups are performing well it is important to look at your data over a wider scale of at least a couple of months. Just like people can have bad days, ad groups can have bad weeks, so don’t just cut an ad group because it has a slight dip. Look at your data over longer periods of time and if you have specific ad groups that are consistently lower than they should be, it may be time to reconsider running them at all. Some ad groups are worth keeping because they bring in conversions every once in a while, but you can cut the budget way down so that they aren’t draining your bank account every week. Some ad groups just need to be stopped, but rather than deleting them entirely I recommend just pausing them so that you can go back in later and look at what didn’t work compared with your high performing ad groups to learn from your mistakes.

Google ads is always changing, so staying on top of your data and understanding what it means is important for success. Your ads will likely have good days and bad days, but looking over time it should be obvious which ad groups are consistently performing and which ones are consistently costing your business.

How to tell if your keywords are performing well

  1. Click-Through-Rate

Much like other areas of your Google Ads, the CTR of your keywords can be a crucial piece of information when it comes to assessing the success of your campaign. When it comes to your keywords a CTR of 2% or higher should be achieved. In many cases if you have a keyword that has a low CTR it means that the people searching for that term are not clicking on your ads. This may be a problem with your ads themselves, so check those as well before removing any keywords. However, it may also be an issue with the keyword itself. It may have a double meaning that requires negative keywords to be added to the campaign or it may just be slightly irrelevant to your ads.

  1. Spend

Spend is also extremely important when it comes to assessing your keywords. Any keyword that is spending exponentially more than the others but bringing in limited traffic and conversions, that keyword either needs to be given a decreased target CPA (cost per action) or in extreme cases it should be removed entirely. Many times you need to look at both CTR and spend together to assess the success of a given keyword and decide if that keyword should be removed.

  1. Relevant Search Terms

One of the best tools available to you when looking at the success of your keywords is within the search terms. The search terms tab under keywords tells you which search terms people typed in that triggered your ad to appear and then how many people actually clicked on those ads once they were shown. These search terms can give you many insights into your ads so it is important to check them somewhat regularly. If there is a search term that is triggering your ad to show but is unrelated to your product, that search term should be added as a negative keyword. Similarly, if there is a search term that is consistently triggering your ads to show and drawing in prospective customers to your web page that search term should be added as a keyword to your ad group.

How to tell if your ads are performing well

  1. Click-Through-Rate

Once again, CTR is one of the first things you should check when determining whether or not your ads are successful. The higher the CTR the more successful your ad typically is and consistently under-performing ads should be paused or removed from your campaign. Remember to look at these numbers over several months to get the best idea of how your ads have been performing over time.

  1. Spend

Just like with your ad groups and keywords, if your ads are spending too much and bringing in little to no conversions their budget needs to be lowered or they need to be cut from your campaign. What would constitute as too high of a spend will be different for every campaign and for every company. You should know the absolute highest number your cost per conversion rate can be while still making you money and keep an eye out that your ads are not spending more than that. If they are, then they are just draining your company of funds and not bringing in the potential customers it should be.

  1. Conversion Rate

Your conversion rate is a percentage number that tells you out of all the people that clicked on your ad how many of them actually bought your product. There isn’t really an exact number for what your conversion rate should or shouldn’t be. As always, the higher the percentage the more successful your campaign will be. The cut off for what your conversion rate must be is generally decided on an individual basis and for newer campaigns may be decided as your campaign grows. Generally, if your ad has had a consistently low conversion rate over time you should investigate other aspects of your ads and ad groups to see if there is a separate reason behind your low conversion rates, or if your ads are simply not performing.

How to tell if your budget is killing your campaign

  1. Spending too much

Your budget is obviously very important to the success or failure of your Google Ad campaign and spending too much can be a severe problem. It goes without saying that spending too much on your ad campaign, especially if that campaign is under-performing, is a very bad thing. But, how do you know if you’re spending too much? It is typically fairly easy to see when your spend is too high; your cost per conversion will be very high or your spend will be high without seeing any conversions at all. When this happens you should start by greatly decreasing your budget or dropping your cost per action to better control the level of spend your campaign is using.

  1. Spending too little

You may think that the only way your budget can kill your campaign is if it is too high, but this isn’t true. A budget that is too low can be just as harmful in different ways. If your budget is too low it will prevent your ad from being seen by enough people to grow your brands awareness or bring in enough potential customers to generate conversions. Even if your budget is higher, if it is lower than your competitors you will still not get the visibility that you need to have a successful campaign. It is often easy to tell if your budget is too low because you will get very few impressions and even fewer clicks to your landing page because your ads are not being shown to enough people.

How to tell if your landing pages are killing your campaign

  1. High CTR but low conversions

Sometimes it can look like your campaigns are performing extremely well, but you’re still not bringing in the number of conversions that you would like. There are a number of ways this can manifest itself and appear within your campaign, but it typically means that your landing pages are the problem. If your click through rate is high but your conversions are low, it means that people are clicking on your ads from Google and then not going through with the sale upon reaching your landing page. Building a good landing page is a careful balance between science and art and it sometimes takes multiple tries of playing around with your landing pages before you figure out what works and what doesn’t.

  1. Successful ads and low spend but low conversions

Another way unsuccessful landing pages may show themselves is if your ads and keywords are all performing well and bringing in a high CTR while keeping your spend low, but conversions are still lower than they should be. More often than not this just means your landing pages could use some sprucing up. Sometimes it is simple errors like a malfunctioning button or a faulty link, but it could often be larger issues like a poor mobile platform or a difficult and non-user-friendly design.

How to tell if your ad schedule is killing your campaign

  1. Low CTR despite high budget

Your ad schedule is not usually an aspect of your campaign that will cause severe problems, but if you are struggling to bring in the desired amount of traffic to your campaign it is worth looking into. Sometimes if your budget is higher but you are still getting a low CTR this could be because you are displaying your ads at the wrong times. Be careful not to mistake these issues for keyword or ad discrepancies, as it is important to look at all aspects of your campaign before jumping to conclusions about what may be causing the problem.

  1. Higher conversion rates at the beginning or end of your ad schedule

Another way to tell if your ad schedule may be incorrect is to look at when you are getting conversions. Typically, you should get the highest number of conversions per day in the middle of your ad schedule, creating a bell curve over when your ads start showing and when they stop showing. If your ads are the opposite, showing higher levels of conversion at the very beginning or end of your ad schedule and not in the middle of your ad schedule it is likely that you are not showing your ads at the most optimal time.

The time during which you should be showing your ads depends very heavily on your audience and your product. For example, if your target audience for your product is high school students, your ad schedule should focus on the times that high school students are out of school in order to optimize the number of people within your target audience see your ads.

How to tell if your audiences are killing your campaign

  1. Showing your ads to too few or too many people

Adding audiences to your ads can often help refine who your ads are shown to in order to increase the likelihood of getting a conversion when showing your ad to a prospective customer. However, if used incorrectly they can do more harm than good. If the audience you are targeting is incorrect, it will not have the desired effect. You could be showing your ad to too few people, causing your conversions to be much lower than they would have otherwise been, or you could be showing your ads to too many people, blowing your budget on showing advertisements to people that are not actually interested in your product.

  1. Showing your ads to the wrong groups of people

Another way that audiences can be incorrectly used is by showing your ads to the wrong audience. If you target an audience to sell your product to and that audience does not actually include the people that are interested in buying your product then you are advertising to the wrong people and are likely to make very few conversions. Because of this, it is best practice to not implement audiences while your campaign is new and still growing. Once your campaign is established, you can use Google analytics to research and discover which audiences and demographics are most interested in your product to then optimize and focus in your campaign. However, be careful with this because getting it wrong can kill your campaign very quickly.

Commonly Asked Questions:

What should my budget be?

While it greatly varies between different business and different campaigns, I tend to set most of my campaigns at a starting budget of $5. I watch my new campaigns closely and if they perform well, I might raise the budget. However, if they do not perform well, I make sure to quickly fix the problem or lower the budget if the campaign is hurting the overall account.

How many campaigns should I set up?

Start small, especially if you’re new to Google Ads. Set up one campaign at a time and then give that campaign a week or two to find its feet. If it’s performing well, great! If not, you know that it’s time to go back to the drawing board. From there you can start to determine which ads work for you and which ones don’t, the most effective way to market your brand, and which products or services to pay more attention to based on what your customers are actually purchasing.

Do I need to set up ad extensions?

No! When used correctly ad extensions can help improve your ads. However, they are far from necessary. It is better to not use ad extensions than to use them incorrectly.

Related Articles:

How to Set up a Search Campaign in Google Ads

How to Set up a Display Campaign in Google Ads

How to Set up a Shopping Campaign in Google Ads

How to Set up a Smart Campaign in Google Ads

The Different Google Ad Extensions and How to Use Each One

Everything you Need to Know about Google Ad Keywords

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