10 reasons your Google Ads aren’t profitable
Google Ads can be the fastest and simplest way for an online retailer to improve sales revenue and profitability. But if your Google Ads account isn’t managed properly, you won’t maximise profitability. Worse still, you may give up on Google Ads altogether before realising its true sales potential.
Let’s look at 10 of the most common reasons why Google Ads aren’t maximising your profitability and what to do about them:
1. Keyword selection
If you haven’t got the right keywords, your Google Ads account won’t be profitable - simple as that. Keywords determine whether your ads will receive a sufficient number of clicks to convert into a sale. The keywords you choose need to be sufficiently searched in order for your ad to appear and then be clicked. Read this article to find out more about the importance of traffic volume.
Keyword selection also impacts sales conversion rate. Your ad can receive 10,000 clicks, but if those clicks don’t generate sales, your ad spend won’t result in profit. Keyword selection can give you a high volume of clicks but your keywords must be relevant and specific: crucially, they have to be the keywords which ready-to-buy customers are using.
A common mistake is to increase the volume of keywords on the basis of ‘the more we have, the more likely we are to sell’. However, keywords which have no relevance to your product, or which are not resulting in conversions, should be removed. This will reduce your spend on ineffective traffic and therefore increase your profitability.
For more information on conversion rate and identifying high converting keywords, read this blog post.
2. Budget and bidding
In order to achieve sales conversions, you also need a sufficiently high volume of clicks per keyword. Let's say that with a conversion rate of around 2%, we can assume that you need around 100 clicks to achieve two sales and the more keywords you’re using, the more clicks you need to validate this. This means dedicating enough budget initially to offer any chance of success. But, the obvious benefit of pay per click (PPC) advertising is that you only pay for the clicks you receive.
A common mistake for the Google Ads beginner is to start with a small budget on the assumption of reduced risk to find out if PPC works for your online retail business. Unfortunately, it doesn’t work quite like this: you need to spend sufficiently high enough to achieve adequate volume of clicks, of the right quality keywords. If you fail to dedicate sufficient budget at the start, it can give you a false impression of the potential sales success and it can end up costing more long term. It’s usually more cost effective to start bigger, learn what works quickly, and then scale back by reducing less effective spend, or reinvest it in the proven keywords.
It’s also key to understand that keywords which generate sales tend to have a higher cost, because their value is recognised by competitors in the market who are willing to bid more for them. Conversely, cheap traffic is usually cheap for a reason: in most cases, it won’t result in converted sales. This means bidding enough for your ad to appear for high yielding keyword searches.
This blog post explains more about how to set your budget for best sales success.
3. Ad content
An ineffective Google Ad won’t receive sufficient clicks, or won’t receive clicks which result in converted sales. Firstly, your ad has to be displayed and this means using the right keywords.
Your ad needs a ‘call to action’ (CTA) which tells the searcher what you would like them to do. This means using text like ‘get’, ‘buy’ or ‘shop’.
It’s also got to clearly present what you’re selling using simple, easy to understand language, so that the customer knows what to expect when they click on your ad and that they will get the information they desire.
Your ad also has to be compelling. Why should the prospective customer click on your ad and what is different about your offer in a way which is advantageous? This means an ad which is positive in language or likely to elicit a reaction, and it means avoiding word repetition.
4. Landing pages
Once a searcher has clicked on your ad, if your landing page is unclear or inaccurate, your typical customer will click ‘back’ and try one of your competitors instead. First, this means having a landing page that addresses the need of the searcher who clicks your ad: if the potential customer arrives on your homepage and has to navigate to find what they’re looking for, they are likely to lose patience and bounce.
When the searcher arrives on your landing page, it has to be accurate, which means presenting the product and information which corresponds with the Google Ad. It’s then important to think from the perspective of the shopper and make it easy for them: the information they want should be clearly visible and easy to find on the same page, which will encourage their purchase.
Like your ad, the landing page also has to be compelling, using the appropriate mix of words, images and web design. A purchase involves a financial risk, dependent on the value of your products, which means that your landing page and website has to give the customer confidence in their purchasing decision. It’s also vital that your landing page includes a call to action, directing the shopper on what to do next in order to buy or perhaps enquire.
5. Checkout process
The key aspects at the checkout are to retain the customer’s confidence and make the purchase clear and simple, which means removing any barriers. So, clearly present what your customer is buying, the price including delivery charge, as well as the delivery timescale. If you don't clearly provide this information, the customer can lose confidence or patience, abandon the purchase and go elsewhere.
Collecting data during the process can be useful for marketing but if you insist on making customers create an account at the checkout, certainly make sure that they don’t have to respond to a confirmation e-mail before they can buy. Often, their reaction will simply be to give up or go elsewhere.
It should also be a given that security is fundamental. To retain the confidence of your customer, ensure that your checkout process is HTTPS-secure. Asking for unnecessary personal information can also arouse suspicion and frustrate your shopper.
Finally, it’s vital that you’re able to supply the product for the delivery terms you state. If the delivery address is international or in a far flung location, make sure that you can fulfil it in time and at the given cost.
6. Quality Score
The Quality Score is a Google judgement on the quality of your search ads. Ranked from 1 lowest to 10 highest, it’s based on expected click-through rate, ad relevance and the landing page experience so in this way it’s a combination of some of the previously mentioned points.
Aspects to consider in addition to those already mentioned include page load speed and device optimisation. Google doesn’t list the weighting or the specifics of how to achieve a high Quality Score, but considering the perspective of your customer can help achieve results.
For example, if your landing page takes too long to load on a mobile device - and too long can also mean longer than your successful competitors - Google is likely to punish your score and by this stage you may have lost the customer anyway, who has gone to shop elsewhere.
A low Quality Score not only presents itself as a low rank for your ad compared to the competition, but Google will also charge you a higher cost per click. Even if you still get clicks and sales, the more you pay will reduce your profit.
The good news is that the changes you make to increase your Quality Score, at least as far as your landing page and user experience is concerned, will also help improve your organic search engine optimisation. To find out more about Quality Score, read here.
7. Google’s automated processes holding you back?
When setting up your Google Ads account, some settings need careful consideration. For example, Google can automatically display your ads across the Google Display Network (banner ads on third-party websites) without you realising it. If it wasn’t your intention to advertise on the Display Network, this style of ad may not be right for your product or your audiences, and the clicks you receive may therefore go to waste, reducing your conversion rate and profitability. You can make a simple button check to turn this off if display ads aren’t your focus.
Google’s automated campaign management facility, Smart campaigns, can be great to help the first-time Google Advertiser get started. But despite the improvements in AI, the optimisation and accuracy required to fine tune your keyword selection and budget shouldn’t be left to Google. What if your competitors are doing the same?
To maximise profitability, your account needs a tailored, specific review and management. If not, competitors who are optimising appropriately will leave you behind.
8. Is your market offer right?
You’ve got to aim for a high Quality Score, compelling ads and a great website, but a fundamental aspect will always be the quality and relevance of your products.
Within your market, it’s crucial that you identify and compare your offering to that of your competitors, considering product quality, price, presentation, plus aspects such as delivery and service. No matter the quality of your ad, if you’re more expensive or the quality of your product doesn’t cut it, look at these aspects first.
Timing of advertising can also play an important role. Products can be more or less relevant at different seasons of the year, but even time of day plays a role. Keywords can return different results at different times, so analysing what works for your online retail business and when is an important aspect to maximising sales and conversion ratio.
The same can also be said for location towards maximising profitability of your ads. This means targeting areas or countries which you identify as most relevant and successful, while removing those that aren’t.
9. Ecommerce Tracking
The first thing is ensuring that tracking is turned on, so in Google Analytics check the button ‘Enable Ecommerce’. You’ll then need to add some code to your website to track the data; find out how by reading more here or if in doubt, contact your web developer or Google Ads agency.
It’s crucial to ensure that tracking is installed correctly to make sure that the data you’re tracking is an accurate representation of the conversions you receive. This means segregation of data relating to the sales cart, checkout and completed sales. If it’s not properly tracked, you won’t get a true representation of the performance of your Google Ads.
A common mistake, especially when beginning Ecommerce Tracking for Google Ads, is to measure too much. Measuring too many variables before the fundamental analytics are understood can confuse understanding of your results and will certainly eat into your valuable time, which should be dedicated to efficient Adwords management.
10. Provide sufficient time to optimise your PPC account
Just like the point we made earlier about using Google Automated tools, if you leave your Google Ads account to perform on its own without regular analysis and refinement, your competitors will increasingly overtake you and your budget will be used inefficiently, paying for clicks which aren’t converting.
You need to spend time each week - at least 20 minutes - optimising your account. Not only do you need to analyse your product listings and content to promote your offer and maintain a high Quality Score, you also need to work to refine less successful areas to improve profitability. Adding negative keywords where you receive a click but no sale is nearly as important as adding positive keywords, where every negative keyword click reduces your profitability.
Bonus - 11. Too much to do, too little time...
...or too much to learn to take Google Ads to the next level? Using our tools and resources, you can go a long way towards setting up your own profitable Google Ads account. If you need help along the way, or an expert team to manage it for you, get in touch.