One-Quarter of SMB PPC Budgets Said Wasted

October 11, 2013

This article is included in these additional categories:

Digital | Local & Directories / Small Biz | Mobile Phone | Paid Search | Tablet

WordStream-SMBs-Wasted-PPC-Budgets-Oct2013An analysis of 500 SMB AdWords accounts suggests that the average small business spends $1,200 on PPC and wastes more than one-quarter of that total. The research, conducted by WordStream, points to 5 areas where account managers are lagging and can improve their campaigns: mobile search best practices; ad relevancy; account activity; keyword optimization; and landing page quality.

  • Lack of Mobile Optimization

According to the study, less than 1 in 5 SMB AdWords accounts use mobile-preferred ads, and only 1 in every 20 SMB accounts has enabled call extensions in all their mobile campaigns. Recent data from Google indicates that mobile search ads experience an 8% increase in click-through rate when call extensions are enabled.

  • Ad Relevancy

While WordStream says that a quality score of 10 (boosted by relevant ads) nets an advertiser 80% lower cost-per-click and a 50% discount on cost-per-action, SMBs in the study averaged out at a quality score of just 5.

  • (Lack of) Account Activity

Here’s a quick win: a little more time spent managing the accounts. Just 1% of the advertisers tracked made changes every week during the past quarter, while a majority 53% perform Ad Optimization only once per quarter. More than 4 in 10 did not add a new negative keyword in the 30 days prior to the study.

  • Keyword Optimization

While 43% of SMB advertisers did not add a new negative keyword, 1 in 5 did not use a single one during the study period. What’s more 1 in 4 advertisers relied only on broad-match keywords, and only 4 in 10 used modified broad match keywords.

  • Landing Page Quality

Finally, the study shows that small businesses aren’t sending PPC traffic to the best-quality landing pages, and many aren’t tracking conversions on their landing pages. Specifically, more than one-quarter of the accounts send all of their traffic to a single landing page, and 20% send traffic to the homepage. Less than half of the landing pages have conversion tracking installed.

It looks like SMBs have a little work to do, but there are losses to be stemmed. To try and quantify the wastage from the campaigns, WordStream put together a few estimates based on typical cost-per-click and conversion rates this year across a number of industries. On average, the researchers estimate that a shopping company might lose 569 product sales per year, a B2B company 157 leads, a car dealership 273 test drive appointments, and a finance/insurance business 126 insurance quotes.

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