Over the last 10 years I’ve seen advertisers pay cost per clicks of up to $90 for zero value clicks and businesses spending $100,000 per month without any conversion tracking in place.

Fortunately, these worst-case scenarios are relatively rare.

But there are a number of costly AdWords mistakes that are very common among beginners and also sophisticated advertisers.

In this article I’ll go over the 7 most common Adwords management mistakes that are costing advertisers thousands of dollars (and making Google millions).

AdWords Mistake 1: Broad Match Keywords Only

“How on earth did I spend $2,000 on people searching for [cleaning jobs] even though I only bid on the keyword carpet cleaning services?”

Because you didn’t understand the difference between broad, phrase and exact match keywords.

All of those keywords in your account that don’t have “quotation marks” or [square brackets] around them are broad match keywords.

Broad match keywords are designed to automatically bid search queries that are similar or related to your broad match keyword.

When you how how to use them well they are great, when you don’t they are trouble.

How to fix it?

– Make sure you understand the difference between broad, phrase and exact match keywords (Read: keyword matching options).

– Run a search terms report in Google Adwords to understand which search queries actually triggered your ads. This is often an “aha moment”.

– Add negative keywords to your campaigns based on your search terms report in order to prevent irrelevant or low-performing from triggering your ads.

– Create new campaigns using phrase and exact match keywords based on your best performing search queries.

AdWords Mistake 2: Traffic from Mobile Devices

By default every AdWords campaigns is set to run on computers, tablets and smartphones (desktop/tablet/mobile).

Mobile traffic performance often varies significantly from desktop performance.

One of the most common AdWords mistakes is that advertisers are wasting ad dollars because they don’t monitor and adjust their mobile device bids.

Especially on AdWords display campaigns, mobile traffic can waste a lot of budget due to low-quality mobile app or website placements.

How to fix it?

– Check your mobile traffic performance in AdWords by clicking on Segment -> Device. (Read: AdWords segments)

– Increase or decrease or your mobile bid based on performance (Read: Setting bid adjustments)

AdWords Mistake 3: Campaign Budget Limits

A mistake that is less obvious yet costly relates to campaigns with a limited budget.

Many advertisers will restrict their budget by setting a daily budget limit rather than calibrating their cost per clicks bids in line with their target budget.

Let me explain using an example.

If you set the daily budget in a campaign to $100, AdWords will stop running your ads as soon as your budget is maxed out.

If your average cost per click is $1 you would get 100 clicks per day until your budget is maxed out and your ads will stop running.

In many cases the same advertisers could get 125 clicks per day by lowering the cost per click to $0.80.

Note: This strategy only applies to campaigns that are limited by budget and maxed out on a daily basis.

How to fix it?

– In your campaign settings, set your delivery method to “Accelerated: Show ads more quickly until budget is reached”

– Keep lowering your cost per click bids until you barely hit your daily budget. That’s where the sweet spot is.

AdWords Mistake 4: Conversion Tracking

Conversion tracking – not as obvious as you might think.

I’ve seen businesses spend $100,000 per month on Google Adwords without any conversion tracking in place.

I’ve also seen businesses track the number of visits on a contact form instead of actual form submissions.

Both mistakes can be very costly.

How to fix it?

In order to setup conversion tracking, you need to determine the most important performance metrics on your website.

For 95%+ of all businesses it’s either sales or leads.

So your Adwords tracking code needs to be integrated on the confirmation page that visitors are redirected to after making a purchase or submitting some kind of contact form.

The most common mistake with respect to the integration is that advertisers integrate their conversion tag on a landing page instead of the confirmation page.

Read the Adwords conversion tracking setup guide for the technical details.

AdWords Mistake 5: Junk Display Traffic

“We’ve tested display but it just doesn’t work for us.”

(Most common remark I hear about the display network.)

Well, how can you run a profitable display campaign if half of your clicks came from iPad games for babies?

The display network is full of opportunity but also full of junk traffic.

Here’s a quick guide to get rid of a lot of low-quality traffic.

How to fix it?

– Run a placement report in your display campaign (Read: Adwords placement report)

– Exclude low-performing placements from your campaigns (Read: negative placements)

– If mobile apps are wasting budget without results, exclude all of them by adding “adsenseformobileapps.com” as a negative placement

– Exclude low performing traffic by categories using site category options

AdWords Mistake 6: All Days All Hours

By default your Adwords campaigns are set to run 24/7 with the same bids. This can be a bad idea.

Selling to businesses? You might want to reduce bids or turn off campaigns on weekends.

Selling to consumers? Weekends could be your best performing days in the week.

How to fix it?

– Check your day of the week performance “Dimensions -> View: Day of the week”

– Check your hour of day performance: “Dimensions: -> View: Hour of Day”

– Create custom ad schedules based on performance (Read: custom ad scheduling)

AdWords Mistake 7: Ignoring Quality Scores

Adwords assigns each keyword in your account a “quality score” between 1 and 10 (10 is the best).

A low quality score for a keyword means you pay a premium on your cost per click.

How to fix it?

– Check your keyword quality score in your campaigns (Read: Check and understand Quality Score)

– Group similar keywords in the same ad group

– Use the most relevant landing page for every keyword

– Use your keyword in the ad text to increase CTR and relevance