10 reasons your Google Ads aren’t profitable

Alex Byles
4 years ago

"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..."

Google Ads can be the fastest and simplest way for an online retailer to improve sales revenue and profitability. But you won't maximise profitability if your Google Ads account isn’t managed properly. 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 sufficient clicks to convert into a sale. The keywords you choose need to be sufficiently searched for your ad to appear and then be clicked.

Keyword selection also impacts the 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 must be the keywords ready-to-buy customers are using.

A common mistake is to increase the volume of keywords based on ‘the more we have, the more likely we are to sell’. However, keywords that have no relevance to your product or do not result in conversions should be removed. This will reduce your spending on ineffective traffic and therefore increase your profitability.

For more information on conversion rate and identifying high-converting keywords, it's worth heading over to our post Planning your digital marketing strategy: why it's crucial to focus on traffic and quality for some further reading.

2. Budget and bidding

You also need a sufficiently high volume of clicks per keyword to achieve sales conversions. 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 determine 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 an adequate volume of clicks for 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 cost more long term. It’s usually more cost-effective to start bigger, learn what works quickly, and then scale back by reducing less effective spending or reinvesting it in 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 post explains more about how to set your budget for the best sales success.

3. Ad content

An ineffective Google Ad won’t receive sufficient clicks or won’t receive clicks which results in converted sales. Firstly, your ad must be displayed, which means using the right keywords.

Your ad needs a ‘call to action’ (CTA), which tells the searcher what you want 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 that is positive in language or likely to elicit a reaction, which 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 will likely lose patience and bounce.

When the searcher arrives on your landing page, it has to be accurate, presenting the product and information corresponding with the Google Ad. It’s then important to think from the shopper's perspective 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 must 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. Your landing page and website must give customers 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 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, and the delivery timescale. If you don't clearly provide this information, the customer can lose confidence or patience, abandon the purchase and go elsewhere.

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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 be to give up or go elsewhere.

It should also be a given that security is fundamental. To retain your customer's confidence, 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, ensure 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 specifics of how to achieve a high-Quality Score, but considering your customer's perspective 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. By this stage, you may have lost the customer anyway, who has gone shopping 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 are concerned, will also help improve your organic search engine optimisation. To find out more about Quality Score, read here

7. Is Google’s automated processes holding you back?

When setting up your Google Ads account, some settings need careful consideration. For example, without you realising it, Google can automatically display your ads across the Google Display Network (banner ads on third-party websites). If it wasn’t your intention to advertise on the Display Network, this style of an 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.

G Ads Remove Display Network Targeting

Google’s automated campaign management facility, Smart Campaigns, can help first-time Google advertisers 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?

Your account needs a tailored, specific review and management to maximise profitability. If not, competitors who are optimising appropriately will leave you behind.

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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.

The 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 important to maximising sales and conversion ratio.

The same can also be said for location towards maximising the 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 check the button ‘Enable Ecommerce’ in Google Analytics. You’ll then need to add some code to your website to track the data; find out how by reading more here or contacting your web developer or Google Ads agency.

It’s crucial to ensure that tracking is installed correctly to ensure that the data you’re tracking accurately represents the conversions you receive. This means segregating 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. It will certainly waste 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, but 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.

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