Small businesses have increasingly turned to paid search—particularly, Google’s AdWords program—to drive in-store and online search traffic. However, according to research by Wordstream, they are wasting nearly 25% of their pay-per-click (PPC) marketing spend due to simple managerial and strategic errors. The search marketing software and services provider found that this efficiency gap results in dozens, if not hundreds, of lost leads and increased costs for small businesses. WordStream reviewed the PPC activities of 500 small and medium-sized business client accounts in USA and found that many businesses are not maximizing the value of their AdWords campaigns because they do not engage in basic PPC best practices such as actively managing their accounts, improving ad relevancy and engaging in mobile optimization.
Key findings from Wordstream’s research include:
- The typical small business spends US$1,200/month on PPC yet wastes more than 25% of this key investment
- This 25% inefficiency has tangible costs for businesses – the company found that these missed opportunities can by quantified by significant lost enquiries, quotes and sales
- Quality Scores are critical to limiting PPC costs – companies that receive a perfect Quality Score (10) receive a 50% discount on their cost per click (CPC) while companies that receive the lowest score (1) can expect their CPC to increase by 400%
- Less than half of small business landing pages have conversion tracking installed, preventing those companies from measuring what’s working
- 95% of small business accounts do not have call extensions set up on all campaigns.
Small Business Advertisers Are Missing Opportunities
A typical small business wastes about 25% of their annual PPC advertising budget. Depending on the vertical, that 25% of wasted spend adds up to a lot of lost business, sales and leads:
- The typical finance & insurance business loses 126 insurance quotes per year
- A bed & breakfast in the travel & tourism business loses 367 guest inquiries
- A shopping company loses 569 product sales
- A car dealership loses 273 test drive appointments
- A fitness company loses 218 gym memberships
- A B2B company loses 157 leads
- A software company loses 211 enterprise software inquiries.
Small Business Advertisers Show Low Account Activity
Just doing more work in your PPC account is probably the single easiest way to improve your results. But most SMB AdWords managers are guilty of laziness:
- Only 1% of small business advertisers does work in their account every week
- Over half (53%) of SMBs only optimize their ads once per quarter
- 43% of advertisers haven’t added a new negative keyword in the past 30 days.In 2013, the typical small biz AdWords account had two campaigns and 212 keywords, but only 9 ad groups, 18 text ads and 3 landing pages.
Small Business Advertisers Need Better Keyword Research
PPC advertisers, whatever the size of their business, need to do smart keyword research, focusing on keyword relevance and keyword expansion:
- Do long-tail keyword research – these more specific, targeted keywords offer less competition, lower CPCs, and more qualified clicks
- Use the right match types – over half of small business aren’t using modified broad match at all – only 25% of accounts use broad match
- Leverage negative keywords – 1 in 5 small biz AdWords accounts don’t contain a single negative keyword.
- Too few keywords, too few negative keywords and incorrect use of keyword match types lead to high amounts of wasted spend.
Small Business Advertisers Have Poor Ad Relevancy
More relevant ads get higher Quality Scores. With a perfect Quality Score of 10, you’d enjoy 80% lower cost per click and a 50% discount on cost per action. The lower your score, the more you pay – unfortunately the average Quality Score for small businesses is 5.
Small Business Marketers Have Ineffective Landing Pages
Landing pages are how you cross the finish line in PPC and convince your visitor to convert. Small business advertisers aren’t closing the deal because of poor landing page optimization:
- Over 25% of accounts send all their PPC traffic to one landing page
- 1 in 5 small businesses send all their PPC clicks to the home page
- Less than half of small businesses have conversion tracking installed
- These landing page mistakes lead to poor ROI and big holes in reporting.
Small Business AdWords Accounts Lack of Mobile Optimization
Now is the time to take advantage of the opportunities in mobile advertising. However, small businesses still aren’t making the most of mobile space:
- Only 1 out of 20 SMB accounts has set up call extensions (which increase CTR by 10%) in all their mobile campaigns
- Fewer than 20% of AdWords accounts have mobile-preferred ads.
Larry Kim, founder and chief technology officer of WordStream,
said;“While it’s not great for SMBs to hear that they are wasting nearly a quarter of their PPC budget, we believe that knowledge is power and the first step to fixing these problems is to know that they exist. The good news is that each of these problems can be rectified by applying regular attention and relatively minimal time; it’s something even the busiest small business owner can manage. We think this research will open some eyes and hope it will help SMBs make better choices when putting their hard-earned money behind PPC programs.
Ask us for a FREE Adwords Performance Grader to see if your campaigns have the above problems. You can avoid all these problems by choosing Patterson Digital Marketing to optimise and manage your PPC advertising and you will achieve a great ROI and get an edge over your competitors – phone Chris now at (09) 449 1005 or (027) 489 5009 or email at chris@PattersonDigitalMarketing.com to arrange a free 2 hour consultation to maximise your PPC advertising sales and achieve your desired results.
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