The ultimate goal of any marketing/advertising campaign is to be profitable or at least add value to your business.
Losing money on AdWords campaign means that your campaign does not meet your ROI goals.
There are many factors that can lead to AdWords campaign failure: bad planning, unrealistic goals, wrong budget, bad keywords selection, unattractive ads, un-optimised landing pages, lack of customer engagement, weak targeting strategies etc.

Some strategies to avoid losing money on AdWords

Setting your marketing Goals

Regardless of the adverting medium, the first thing you should do in any advertising project, before you spend a single cent, is to set the goals your advertising campaign needs to accomplish. If you do not have goals set, you cannot define and measure success and you cannot optimise your campaign to increase performance.

You have to dig into your business model to understand how the business is making money and what is required to do to grow the business.

Once the business examines itself and understands how and where it makes money, set measurable and realistic goals for what the marketing campaign needs to accomplish.

Some common goals

  • Set percentage ROI on products and services sold
  • Minimum number of sales per month
  • Minimum revenue per month
  • Number of leads per month
  • Cost per lead and acquisition

You cannot manage what you don’t measure

Optimising AdWords campaigns can only be done with proper metrics. If you don’t have the numbers to assess your campaign, there is no way to benchmark your campaign performance against your goals. Therefore for every goal you set, you need to define a set of metrics.

Google offers a conversion tracking tool allowing you to see cost per conversion, total conversions, and ROI etc. Google conversion tracking can also track offline transactions such as call tracking.

Bidding can make or break a campaign

Smart bidding will move your AdWords account from a cost centre to a revenue centre. Knowing where your dollars are being spent, watching the returns on investment, and making appropriate adjustment to optimise your campaign are paramount to making a profitable AdWords campaign.

You have to keep in mind that a bid is only value to tell Google how much you are willing to pay for a click. The ad copy and keywords allow you to reach customers with the right message. Your landing page will create the first impression and entry point into your sale funnel. The organisation of your account will have as much to do with your success as the bid will.