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Are You Making These Costly Adwords Campaign Structure Mistakes and Missing Out On Your Most Valuable Customers?

by David Melamed on March 27, 2014 · 15 comments

Creating killer Adwords campaign structures is probably the most misunderstood (yet ridiculously important) element of your PPC strategy.

If you are like most search advertisers, there probably isn’t much rhyme or reason to your campaign structure. A good portion of the PPC I manage involves taking over accounts that other people have been built out (and mismanaged). The one universal mistake I see over and over again is misaligned campaigns.

I have seen clients where every single ad group is in it’s own campaign. I have seen campaigns where there is only one campaign for everything. Odds are, if you are somewhat sophisticated, you have at least separated our your content network from your search network. Perhaps if you are even more sophisticated, you have campaigns separated by geography or other settings within your Adwords account.

There are two main reasons why choosing the right campaign structure is crucial.
The first reason is that your campaign settings apply to every ad group and keyword in that campaign. For example, I have a prostate cancer center as a client and people travel from all over the world to see them. I want to use a location extension to people within driving distance of his office, but anyone outside that area, I need to get them to the website to learn about their amazing treatments, before we drop the bomb on them that they need to travel for the treatment. Technically I can enable and disable location extensions by the ad group, but since my keywords are not location specific, that is not an option. So, for this client I needed two different campaigns. One targeting the several states someone could drive from to his office, and one targeting the rest of the world.

Another simple example is branded search. There are lots of reasons to bid on your own brand name, but the main reason is to protect your turf. A competitor can bid on your brand name even if it’s trademarked. However, since it’s your own brand, your quality score will be much higher than your competitors, so bidding on your own brand will be much cheaper. Also, you really want to own the top position for your brand name, so that they only click on your ad or organic listing, so you might want to set your bidding strategy differently for branded search. For example, targeting the top position.

However, the second reason for putting a lot of strategy and thought into your campaign choices is even more important.


Your budget is set on a campaign by campaign basis. This means that if you have a limited ad budget, you have to spread it out across your various campaigns. This is a very big deal, because if you are running out of budget in a certain campaign, you will miss impressions. Here’s the problem. What if one type of searcher or keyword is much more valuable than another. For example, let’s say you sell furniture, and offer free shipping. You of course bake your shipping price into your total price. However, the cost to ship to a place near your distributions centers is often a fraction of the cost to ship cross country. Your pricing reflects the worst case scenario or maybe your average shipping cost, but you make much more money off the people that live near your distribution center. Now, you can of course set your bid modifiers in account settings to raise your bids in those markets, which is a good idea, but what happens if you run out of budget in middle of the day? Let’s give an example. you have a distribution center in Los Angeles, and you are based in NY. You run out of budget at 4pm, but it’s still only 1pm in LA. That means, you are burning budget all across the country, and missing out on a good portion of the potential in the LA and west coast markets.

A better example would be a dental practice which does cleanings, and root canals. The value of a cleaning patient after costs could be under $50, but the value of a root canal patient could be worth over $1000. There will probably be more searches a day for the cleanings and other routine procedures, but the root canal searches are far and few between. What happens if you lump them all into the same campaign and you run out of budget?

You will miss out on your most valuable customers due to a poor choice in setting up your campaigns.

If you build out different campaigns for each ad group, you end up splitting up your budget too thin, and half your campaigns will  miss out on valuable traffic. If you build out everything into one campaign, you will probably miss out on your valuable visitors due to running out of budget throughout the day.

What should you do? What are the campaign structures that top professionals use?

Well, there are a few, but the underlying concept should be around maximizing your bottom line.

Another example is accelerated spend versus standard spend. The difference is simple. Accelerated shows your ad to every query until you run out of budget. The standard tries to spread your budget out throughout the day. If we go back the dentist example above, he should probably allocate the bulk of his budget to a root canal, or high value patient campaign, and set it at accelerated spend. After all, he wants to maximize on those patients. The rest of the budget should be sent to the lower value campaign, which you should probably only do standard spend so your budget lasts. Especially if its possible that searches after work convert better than those in the morning.

Probably the biggest mistake ppc vendors and advertisers make is not putting a lot of thought and strategy into their campaign structures.

Tony Hsieh, Zappos CEO, and the author of Delivering Happiness explains that the most important decision in poker (and business) is choosing the right table to sit at. The size of the market, and the competitive landscape are more important than how you play the game. He uses a seller of 7 finger gloves as an example, you can be the best at making 7 finger gloves, but how many people have 7 fingers on their hands? The great part about Search marketing is you get to set the table you sit at, so make sure to set it right!

If you want to get more advanced you can try the Alpha-Beta campaign structure which is meant to maximize quality score and conversions. Quality scores are calculated on a campaign basis as well, so if you have high performing keywords and ads, it might make sense to put them into their own campaign and ad groups to maximize on quality score. For those that need a crash course, quality score times bid price equals ad rank, which determines the position on the page you appear as well as the cost you pay per click. So, maximizing quality scores can translate into higher positions, and cheaper clicks. This is an oversimplified explanation, but the main point is that not only do you have a keyword based quality score and an ad group based quality score, but you also have a campaign based quality score.

The Alpha-Beta campaign structure works as follows. You create your Alpha campaigns the same way you would build out your account from scratch. So, follow the tip above to build out your campaigns based on value of the customer, and the various settings limitations. This way you can allocate budget where it will produce the highest ROI, not just where it seems you need it.

Label those initial campaigns as Alpha, and start running your ads. Odds are, you are starting with broad modifier keywords for the most part, but even if you aren’t you are trying to figure out which keywords produce the best conversions.

As you identify a winning keyword, ad, and landing page, create a new Beta Campaign, which clones the settings of your corresponding Alpha campaign. Now, place that keyword as exact match into an ad group on it’s own. Use the ad that you know is working well, and add it to that ad group, and perhaps explore creating a second variation of that ad to test against it. Since this is likely a single keyword ad group, you can remove dynamically inserted keywords and craft a new ad that is hyper relevant. Important: make sure to add this exact match keyword as an exact match negative keyword to your corresponding Alpha campaign. This will make sure that the right ad is triggered by that exact query. Perry Marshall calls this the peel and stick formula, but I don’t think his method recommends using a new campaign.

The reason here to use a new campaign is that you can allocate budget to it properly, and maybe use a bid rule to buy top position, or what not.

Here’s the bottom line: Unless you have unlimited budgets, or you want to miss out on your most valuable visitors, you need to put a lot of thought into exactly how you want to structure your campaigns.

You need to familiarize yourself with all the different campaign wide settings, and spend time thinking about who your most valuable customers are before starting to build your campaigns. If you are going to work with limited resources, make sure to focus your spend where it will count the most, and the best way to do that is to build your campaigns around focusing on your most valuable customers.

It would really suck to have your budgets run out on a daily basis, but burn through it on lower value keywords and customers.

How do you figure out which keywords and customers will prove to drive the highest value visitors? Well, the best way is to create personas, and map out of a search funnel. If you are a real estate broker, odds are, finding exclusives and new sellers is more valuable than finding buyers. So, I would try to separate out which terms a seller is more likely to search, and break those out into their own campaign.

The truth is though, you can always fix this issue after the fact. It gets a little harder of course, but the same way you can run an Alpha-Beta campaign, you can discover high value keywords, and break them out into their own campaign. Similarly, you can take two similar campaigns, and group them together to focus your strategy. I would recommend using a tool like adwords editor for this as you can easily copy and paste ads, keywords, ad groups and entire campaigns and quickly paste them into the appropriate place.

Like Everything Else in Life…Fortune Favors The Prepared Mind!!!

Want to really stay prepared, You can get my list of my top 5 PPC tools here.

I am working on a new tool to help you keep an eye on your PPC vendor by reporting to you about how much work they are actually doing for you. If you want early beta access, sign up here.

full disclosure

About the author...

– who has written 23 posts on ShoeMoney.com.

David Melamed is a Thought Leader on Search Engine Optimization and Marketing featured on Mashable, Search Engine Land, Marketing Land, Adotas, and Shoemoney. David writes regularly at DavidMelamed.com offering tactical tips, tricks, and startegies to find, engage, nurture, and retain customers. David Melamed is the Founder of Customer Hunter Corp. A content development and promotion agency and Tenfold Traffic a search marketing agency.


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{ 15 comments }

1 Scott Cooper

Wow David, another awesome post. I have always been an SEO guy, I am just starting to do PPC management for some of my clients and your recent posts have been spot on…make me look like a genius when all I do is use your ideas :) Keep them coming.

2 David Melamed

That’s exactly what the Big G wants to hear… you are switching from seo to ppc :)

Seriously though, There is much more to PPC than meets the eye, and things like proper campaign structures and the ramifications of mistakes are almost never shared publicly.

I’m glad you enjoyed this post and I look forward to sharing more ppc content with you.

You can of course visit the PPC category archives on my blog as well. :)

Shoemoney 3 Kevin Giamanti

I like this. I took a lot from the other post about the 4 clicks on Google Adwords that can change things. This just builds upon that.

4 David Melamed

Thanks Kevin. I agree… even though that post was on analytics and this is on adwords, the goal is the same… to share with you resources that make you market yourself and your clients better.

Shoemoney 5 Alan Carpenter

Working within a limited budget is one the hardest things for me. I know the old adage of you need to spend money to make money is somewhat true, but I’m just not in a place where I can do that. I’m glad that you took time to recognize that working within a budget is something that a lot of people struggle with.

6 David Melamed

Hi Alan,

Thanks for the comment. Working within a budget is probably more common than you realize, and there never is enough money. I have yet to see a paid search account that truly maxed out on spend without any room for improvement.

The key is keeping your budgets at the forefront of your strategy to make sure you focus it in the biggest impact areas.

Shoemoney 7 Kennedy

It still blows my mind how far we have come in the ability to target so many different variables when choosing keywords.

8 David Melamed

And this is just within adwords interface… There are bid management tools out there that can cherry pick impressions based on a ridiculous amount of criteria.

I know one ad agency that plugs over 2 billion data points into a DMP (data management platform) daily to influence which impressions they will buy moving forward. They literally can map an offline purchase in a store back to an unclicked banner ad impression. Insane!

Shoemoney 9 Jon B.

I don’t know how it even slipped my mind not to bid on my own brand name. I just assumed it was a waste of funds because of course I’m going to show up when people type in my company’s name. I never thought that my competition could be using that against me. Wow. I’m going to take care of that right now.

10 David Melamed

I’ve debated this with clients for years, and there is no right or wrong.

But the arguments for bidding on branded search are strong.

Shoemoney 11 Candence Jovileen

I think I’ve made the lumping them all into one category mistake more than once. Oops!

12 David Melamed

You aren’t alone Candence. The good news is… as long as your competitors are making these mistakes and you start correcting them, you have a major advantage.

To be fair as well, there are very few credible posts out there about proper adwords campaign structures. I had to learn from hands on experience.

13 Veronika

Hi David,

Great post. Since most of the people are logged in Google while searching, is there any way to know if they have the cash to buy our products or not, if they have better credit, or a job etc.

Thanks.

14 David Melamed

Hi Veronika. I am not aware of that capability within search marketing, although if you develop personas, and map out their search funnel you may find that the “right” kind of searchers use certain keywords. You can also certainly map back internal data you have, and augment using other tools like the PAR program, to map back keywords to specific types of buyers, etc…

In the display buying world though there is some pretty sophisticated data and technology you can use, and even without going to other ad exchanges, within Google there is an option to target “ready to buy” customers with display ads. I haven’t tested it, but in theory it makes sense.

The simplest solution for what you are trying to do though is use negative keywords to get rid of people who search for “cheap” “affordable” etc….

15 faisal

Sometimes it appears all messed up.

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