Since AdWords is pay-per-click marketing, it doesn't make much sense to bid on keywords or search terms that aren't producing conversions. After all, if you're paying for traffic that doesn't convert, you're probably paying for bad traffic. Ideally, you should spend the majority of your budget on search terms with a track record of producing conversions. These search terms indicate how your target audience actually finds you. The problem is that most businesses spend the majority of their AdWords budget on search terms that have never produced a single conversion. These search terms are entered by the wrong type of traffic and as a result, they never convert. Advertising Continue reading below Paying for these search terms is a waste of money.
The question is, what percentage of ad fax list spend is wasted on the wrong search terms? Wasted Ad Spend Now, you can only accurately gauge the effectiveness of ad spend from accounts with quality tracking. So these results come from the 29% of our audited accounts that were effectively tracking conversions. [pullquote] 61% of ad spend is wasted . [/pullquote] In total, these accounts spent 61% of their budget on search terms that never converted. In other words, 61% of ad spend is wasted . However, as you can see below, the more you spend on AdWords, the less you typically waste on bad search terms. Wasted Ad Spend Declines as AdWords Ad Spend Rises Note that a chart with our entire database of accounts is nearly impossible to read on this blog, so this image only shows a few dozen accounts.
However, the trend depicted is consistent across hundreds of accounts. Advertising Continue reading below [pullquote] The average AdWords account wastes 76% of its budget on bad search terms. [/pullquote] By account , wasted ad spend is 6.6-99.7% of total ad spend. The median AdWords account wastes 76% of its budget on bad search terms. And, without good conversion tracking, there's not much you can do about it. However, if you are tracking your conversions effectively, you can use this data to have a profound impact on the performance of your AdWords campaigns. How does wasted ad spend affect your account? At first glance, you might think that wasted ad spend and cost per : every 10% increase in wasted ad spend would increase your cost per conversion by 10%. Boring, but not too bad, right?