Are you paying too much for your pay per click leads and sales?

This article outlines some of the factors that influence the effectiveness of your AdWords pay per click account and the main opportunities to reduce your cost per acquisition (CPA) – in order to make typical savings of 20-50%.

This article covers:

1) Correct set-up of your account

2) Networks, devices and geo-targeting

3) Conversion tracking and linking your AdWords account to Analytics

4) Optimisation of your account

5) Effectiveness of your landing page and website

6) Pay per click management costs

Understanding Quality score – why is it important?

Every keyphrase has a Quality score – it is Google's measure of relevancy.  It influences the position you achieve and the amount you pay per click. For example if you have a quality score of 4 out of 10 and your competitor has 8 out of 10; you will need to pay twice as much to achieve the same position. The main factors that influence your quality score are keyphrase/ad copy relevance, landing page relevancy and Click through rate of the whole account.

By creating a detailed hierarchy of ad groups with very specific keyphrases and matching ad copy can improve the quality score of each keyphrase. Similarly by improving the click through rate of the account you can also help to improve the quality score of all the keyphrases in the account.

1) Correct set-up of your account

Correct set-up of your pay per click (PPC) account will ensure that you are found for the right keyphrases, seen by the right audience, present the right message and take potential customers to the right landing page on your website.

Checklist of tips on how to set-up your AdWords account
  • Identify 1000's of long-tail keyphrases,  use all three match types (clone exact match phrases to produce phrase and broad match), add negatives phrases on an ongoing basis
  • Use Google Editor to create highly detailed hierarchy of ad groups and  campaigns – aim for quality scores of >7 out of 10 (as soon as the account is created)
  • Create 2-3 ads for each ad group, ensure that the theme or keyphrases is included in the title and a call for action in the 2nd and 3rd line (also use Keyword insertion)
  • Use Editor to Clone campaigns so you have content network in a separate campaign or for any geo-targeting (where your ads are seen in specific locations)

2) Networks, devices and geo-targeting

The content network (display network) and the search network do not always convert as well as Google; so if you have a limited budget you should pause these networks.  In the same way you may also want to pause mobile devices.

If you offer a local service then you should have a campaign targeting local customers; this ensures that your ads are not seen outside of the area you can service, so it will increase your relevancy, click through rates and quality scores.

Similarly, it is best to separate out any country and language combinations; as different time zones and levels of competitiveness will mean that the cost per click will be too high in one region and too low in another.

3) Conversion tracking and linking your AdWords account to Analytics

Pay per click (PPC) conversion tracking allows you to measure the effectiveness of your campaign down to the individual keyphrase or ad.  You need to set-up a conversion and get your web developer to add the code to the thank you page at the end of your conversion process (eg a registration or sale).

We always recommend linking your AdWords account to Analytics so you can determine the contribution of paid traffic to your website as a whole.

Tips for tracking conversions
  • If you use a payment gateway (such as PayPal) you need to ensure that the user automatically returns to the thank you page, so that the sale is recorded.
  • Don't forget that some conversions may happen over the phone.

4) Optimisation of your account

Optimisation of your account can be considered as a two part process:

a)      Getting as many clicks for your budget as possible

b) Getting as many conversion from your clicks

Checklist on how to optimise your PPC account
  • managing your positions by aiming for the Goldilocks zone
  • understanding the importance of click through rate on quality score
  • pausing of keyphrases and ads with a low click through rate (eg <1% CTR)
  • pausing ad groups, keyphrases and ads with a low conversion rate (eg <1% conversion rate)
  • pausing networks with a high cost per conversion


We recommend reducing your bid and aiming for positions 4-6 or the ”Goldilocks Zone”. However do not bid too low, if you let the position drop too far your CTR will fall and it will adversely effect the quality score of the whole account.

Click through rates
Do not bid on generic phrases that have large numbers of impressions but few clicks. The low CTR's of these phrases (less than 1%) mean that the quality scores of the rest of our account can be reduced.

Focus your budget on converting phrases (and ads)
The conversion rate of specific ad groups, keyphrase sand ads will vary considerably. Depending on your objectives, we recommend pruning the less effective phrases and ads, and focusing your budget on the best converting phrases.

5) Effectiveness of your landing page and website

By testing the effectiveness of different landing pages or improving the design and effectiveness of the conversion process (eg the easy to fill in a form or the shopping cart); it should be possible to increase the conversion rate of a site.

6) Pay per click management costs

Although some companies try and manage their account themselves; without the necessary training this can often significantly increase your costs.  Consequently, many companies will use an agency to manage their account. However it is essential to choose a qualified agency, the Google AdWords Professional (GAP) accreditation has recently been replaced with a new scheme called AdWords Certified Partner.  Google now provides a directory of AdWords Certified Partner.

Agencies may charge:

  • a set-up fee
  • a minimum monthly fee
  • a fixed fee based on bands of spend
  • performance based eg a set cost per acquisition
  • percentage of spend (typically 10-20% of monthly ad spend)

There has been a lot of criticism of paying an agency a percentage of spend. Unless you have other performance or ROI criteria in place, this may lead to inflation of your monthly ad spend (eg by bidding for top positions, generic phrases and/or non-converting phrases.); as there will no incentive for the agency to save the client money as they will receive lower fees!

Download PowerPoint presentation on How to pay less for your pay per click leads.

Watch Ann Stanley’s presentation on how to pay less for your PPC leads or sales here:

Do you think you have been paying too much for your pay-per-click campaigns? Would you like to discuss the prospect of restructuring your PPC campaign for a better ROI?

If you are interested in knowing more about Google Adwords and Analytics, fill out our contact form or call us on 0116 298 7496.


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