12 Powerful Ways to Reduce Adwords Spend, Lower CPC and Wasted Spend

To reduce Adwords spend, lower CPC and maximize the number of conversions – that’s the standard mandate for every Adwords consultant. The success of every Adwords campaign lies in meeting your campaign goals at the lowest possible costs.

The goals can be varied, but irrespective of the goal, the mandate for a professional Adwords consultant always remains the same – get as many conversions as possible at the lowest possible cost and often reduce Adwords spend. And rightly so.

When you have an unlimited budget ( which is never ;)), it is still relatively easy to generate leads. But delivering conversions at a minimal cost and keeping it that way requires some serious skill. You need to have a well thought out strategy. Continuously monitor your campaigns. optimize keywords, ads and be mindful of so many other nuances to make this happen.

Lower CPC Reduce Adwords Spend and Wastage


Whichever business you’re in, whatever may be your budget, there are some standard processes that can help you optimize your campaigns to reduce wasted spend on Adwords, lower your CPC and get better ROI. Here are 12 things you can do today to optimize your cost…

Here’s my 12 Trusted Ways to Reduce Adwords Spend,  Lower CPC and Wasted Spend on Adwords

1. Long Tail Keywords Means Lower CPC

Like, true friends, Long tail keywords are difficult to come by but they can do a hell of a good for your campaign.

Data suggests single word phrases are costly and competitive. Long tail keywords involving 4 or more keywords are low in cost, less competitive. The search intent’ is also clearer on long-tail helping you to pick the right keywords and get better conversions.

For example:

Head Term: Landing Page

Long Tail Keywords:

  1. Free online landing page builder
  2. Landing Page Design Tips

Long Tail Keywords Lowers CPC

One challenge with long tail keywords is that they deliver very little traffic due to low search volume. But they have a higher conversion rate! If you want to run a profitable Adwords campaign then you definitely need to focus on long tail keywords. Head terms might give you volume but Long Tail keywords are most profitable. Finding long tail keywords isn’t easy but here are few tips to help –

How to find long-tail keywords for your Adwords campaign?

  1. Search Query Reports : Run a Search Query Report for the campaigns. This report will show the exact search terms that your ads showed up for and if they lead to any conversion. Reviewing this report helps to understand how are your users actually searching and you will discover a lot of very relevant long tail phrases that you can add to your account, preferably in Phrase or Exact match.
  2. Use the Tools : Use keyword research tools and look into competitor data. Tools like SEMRush, Spyfu etc. helps you uncover a lot of long tail keywords. They also allow you to snoop into keywords your competitors are targeting and find which keywords might be relevant.
  3. Localize your keywords: If your product or service has a location significance, add country, state, city, town where your services are available. For example – Home Improvement  Dallas Texas
  4. Product Attributes – Very effective specifically for e-commerce businesses and can also be used in some other cases. Add attributes like type, color, size, brand etc. For example – the chance of conversion for  “Puma Men Running Black Shoes 8 size” would be much higher than for “Puma shoes”.
  5. SEO Data : Google has killed the all the keyword data from organic search and there is hardly anything to look into but still don’t forget to look into the keywords for which your page show up – you can find this in Google Webmaster Tools / Google Search Console. You will often find keywords in this list that you never thought of.

This is definitely not the end of it but these are only some of the easy ways to identify long tail keywords. Your objective should be to continually look for more of these keywords and keep adding them to the account. While not a blanket rule, it is generally a best practice to use long tail keywords only in Phrase or Exact match, depending on the keyword.

2. Match Types Can Help Reduce Adwords Spend

Keyword match types are among the fundamentals of Adwords and doing them right can actually save you a lot of money and improve conversions. Using the right keyword match types you can control the searches that can trigger your ad. Whether you want to target a wider audience or narrow it down to highly target specific groups – match types can help.

Right match type reduce CPC

The above graphics was originally published at WordStream

Match Types Description Pros Cons
Broad Match It is the default match type given to all the keywords. It includes misspellings, synonyms, related searches, and all other relevant variations of the keywords. High Traffic Volume
Could help increase no. of conversions
Generates lots of irrelevant queries
Higher Wasted Spend
Tends to Lower Quality Score
Broad Match Modifier This is between Broad Match and Phrase Match and works by adding a +sign in front of the words that must be included. For the keyword to match, the words that have the ‘+’ sign in front of them should be present in the users search query.The order of the words doesn’t matter. Unlike broad match, modified broad match won’t show your ad for synonyms or related searches which gives a higher level of control. This however includes misspellings, singular/plural forms, abbreviations/acronyms. Mostly high search volume
More relevant than broad match
Can still Generate irrelevant queries resulting in wasted spend and lower quality score
Phrase Match Your ads will appear for customers who are searching for the exact key phrase and close variants of your exact key phrase, with additional words before or after. But your ads won’t appear if there is an additional word in the middle of your keyword. For example, if your exact keyword is “ Full Sleeve Shirts”, your ad will appear for the search query “ White Full Sleeve Shirts” and “Full Sleeve Shirts White”, but not for “Full Sleeve White Shirts”. Higher relevance, Increased CTR Lesser search volume than Broad match
Exact Match Your ad will appear for customers who are searching for your exact keyword, or close variants of your exact keyword, exclusively. Precisely targeted traffic, no wasted spend Low search volume

How to Choose the Best Keyword Match Type for Your Adwords Strategy

The type of keyword match you should use largely depends on your campaign goals and often times you need to use a combination of the different match types to hit your numbers while still being able to deliver the volume of conversion your business demands.

In general, if you wish to attract higher traffic volume to your website, you should choose Broad Match or a Broad Match Modifier. However, if you want to generate high-quality leads, you should use more of Phrase / Exact Match Keywords.

It is a good idea to use broad-to-narrow strategy. Start off with broad match keywords to show your ads on all relevant searches. Monitor the performance of your keywords for some time. If your ad is appearing for too many irrelevant keywords, then add negative keywords to stop those irrelevant matches ( more on this below). Also, identify search terms and queries through which you create a list for the phrase and exact match. In a few days, you will get the right match type combination.

3. Negative Keywords Can Save Wasted Spend on Adwords

Negative keywords are my most favorite way of reducing spend and improving campaign performance. I spend a lot of time removing negative keywords every week. if you are wondering what are negative keywords – these are keywords that you don’t want your ads to show up for. You should be looking regularly at your search Query report and you can easily identify queries that are irrelevant to your campaign. These irrelevant words need to be added to your campaign as Negative keywords. Negative keywords can also be added in combination to other match types to define how broad or narrow the exclusion should be.
For Example: if you are offering web development services and have the keyword “Web development” in phrase match, your ads can show up for “Web development tutorial” – now, of course, that is not your targeted query, so you should add “tutorial” as a negative keyword.

negative keywords reduce adwords spend

You must keep weeding out negative keywords from your campaigns on a regular basis. I do it before setting the campaign by looking at possible keyword variations through tools like SEMRush, Wordstream etc. I also keep identifying them when a campaign is running by going through search query reports and add those words to the negative keyword list. Weeding out negative keywords should be a regular task in your campaign management plan, to be done once every week.

4. Increase CTR with Ad Extensions

Increase in CTR directly affects your quality score and increase in Quality Score means lower CPC. So if you are looking to reduce your Adwords CPC and lower overall Adwords spend, you should always keep a hawk eye on your Quality Score. Adwords has a lot of different extensions available, use them wisely. Using the right extension means your ad claims more real estate grabbing more user attention. Also, extensions like Sitelink offers more clicking choice for the user, thereby significantly increasing the chance of getting clicked.

5. SKAG – Single Keyword Adgroups

In general, it is a best practice to have a tightly themed ad group for better campaign performance but you can take it a step forward with SKAGs or Single Keyword Ad Groups.

Single Keyword Ad Group (SKAG) is one of the fastest ways to boost your quality score, CTR and most importantly, your conversions.

As the name suggests, in Single Keyword Ad Groups, you include one keyword per ad group. But you can include multiple match types of that keyword in that ad group. For example – if your keyword is ‘home improvement services’, then the keywords inside your SKAGs could be:
+home +improvement +services
“home improvement services”
[home improvement services] You can name this ad group- home improvement services

How SKAG improves your campaign performance?

SKAG lowers the ratio of discrepancy between the search term to your keyword and keyword to ad thus increasing your CTR. Higher CTR improves your quality score. Good CTR and quality score improve your ad positions. A higher quality score also means lower First Page Bids which lower cost-per-clicks.
However, if you are using multiple keyword match types you would want to be careful about how you set your bids – typically you bid highest for exact match and lowest for Broad match.

6. Bid Strategies Can Help

The Adwords system offers several bidding strategies and knowing which one to use based on your campaign objectives can work really well in improving performance and at time in reducing cost.


Right Bid Strategy Lowers Adwords Spend

At a broad level –

If you are focusing on Clicks – you can use Manual CPC bidding or Maximize Clicks, automated strategy. However, most if not all campaigns will have a conversion objective.

If you are using conversion tracking, you can actually use Adwords Smart Bidding Strategies. There are primarily four types

Target CPA (cost-per-acquisition): You set a Target CPA for your campaign and the system tries to meet that number.

Target ROAS (return-on-ad-spend): This is more based on conversion value. Target ROAS help increase conversion value while targeting a specific return-on-ad-spend (ROAS).

Maximize Conversions: If you want to get as many conversions as possible irrespective of the conversion cost, you can use this.

Enhanced cost-per-click (ECPC): If you want to automatically adjust your manual bids to try to maximize conversions, you can use ECPC. It’s an optional feature you can use with Manual CPC bidding.

Now, while the above Smart Bidding strategies can really help in optimizing campaign performance, you need to be a bit careful while using them. I would recommend run your campaigns manually for some time to get some data that will help you understand the target that you are able to hit and also the Adwords system will learn from the data. Then try setting the smart bid strategies to see if this can outperform your manual optimization.

You also need to be ready that for the first few days this automated bid strategies might actually under-perform, as the system still optimizes the campaign. Also, if you are setting the targets too aggressively ( e.g, a very low CPA) the system will try to optimize for those but eventually it will reduce your ad serving once it realizes that it is not able to hit the target number.

If you are running a branding campaign though you should consider bid strategies like “Target Search Page Location”, “Target Outranking Share” etc

7. Utilize Ad Scheduling & Day Parting to Lower Cost

Where applicable, ad scheduling can do wonders in minimizing wasted spend and optimizing revenue. But remember, ‘applicable’ is the operative word here.

Analyzing your campaign performance by Day of the Week segment gives you a clear idea about the days that generate better results for your ads. You can set bid adjustments to either decrease or increase your bids for the specific days to benefit from this.

Reduce Adwords Spend With Day Parting

Also, there are some obvious cases where Ad scheduling must be used. For example, if you are a B2B player, where all your purchases are made during the weekdays, in office hours – you would probably be better off switching off your campaigns on the weekend.

When to Use Day Parting

Day parting allows you to bid differently for different time of the day. For certain businesses, this is of immense importance. For example, if your supply lunches to your neighboring offices, you would probably want to bid much higher between 11.00 AM – 2.00 PM compared to the remaining part of the day. If you are managing a campaign in a different time zone, you need to be super careful about setting such day parting. Day parting works based on the time zone set in your account and this cannot be changed. Hence you need to get the math right.

While some of this can be done based on the generic nature of the business it is always advisable to look at the data and make decisions. Day of the Week and Hour of the Day dimension reports would provide you all the necessary data to work on this.

Using Ad Scheduling and Day parting properly cuts down unnecessary ad serving during the days or time where the conversion possibility is negligible. If done right this can lead to good savings in overall Adwords spend.

8. Location Targeting – Simple but You Can Bleed Money

Location targeting is a fundamental setting in Adwords campaign but this can also make you bleed money. You might have selected the country or city you want to target your ads too BUT…

By default Google Adwords Location targeting is set to “People in, searching for, or who show interest in my targeted location (recommended)”. This is the recommended setting by Google but trust me this is often not the best setting for you. For example, you are a law firm operating in the state of USA and have targeted the keyword – California law. Now someone sitting in India searches – Lemon Law in California, your ad is likely to show up. He might just be searching to understand why is a law named “lemon law” – do you want him to click on your high CPC ad?
In most cases, the best location setting is “People in my targeted location”. Simply changing this one setting can save you good money.

Avoid wasted spend with Location Settings

Location Based Bidding
There’s more you can do with location settings though. Google allows you to place a separate bid for each location. If you are running a countrywide campaign, look at your location dimensions report. You will notice some cities are doing really well while some others are not so great. Look closer into the data in perspective to city-level location, average position, cpc, total spend, conversion, cost per conversion and conversion rate. Based on the above report adjust bidding for each city to get the max conversions at the optimal cost.

Lower Adwords CPC with Location Specific Bids

Location Exclusion
Google offers the option for Location exclusion as well. So if you are running a countrywide campaign but don’t have your services in a few cities or states, you can target the whole country and exclude those areas. This eliminates unnecessary clicks from areas you can’t serve.

9. Filtering Through Ad Copy Reduces Spend

I am sure you have been told umpteen times that a good ad copy with high relevance delivers high CTR, reduces CPC and increases conversion. All True. But I am going to tell you how an ad copy can sometimes help save money.

You might have some eligibility criteria for your customers – this can vary widely, it could be gender, age, income group, cost of service etc. If you ensure that these eligibility criteria are clearly mentioned in the ad copy that can actually save a lot of money.

Let me give you an example – If you are a high-end digital marketing company that works with top corporations and Fortune brands, it might make sense to include something like “Trusted by Fortune 500 Brands” – this would work like a credibility statement for you and also a startup looking for similar service will know that they probably can’t afford you and would not click the ad. Sometimes it could be much more direct if your product is highly commoditized, e.g, “SEO Packages Starting at $2000/Month” – so anyone who cannot afford will likely not click, saving you money. Or “The Best Salon in Town For Men” – you are automatically excluding women from clicking on it and saving money.

Consider Reading : Google Adwords Character Limit for Expanded Ads & Best Practices

10. Device Level Optimization Lowers Cost

Device Level Bid Optimization Reduces Adwords Spend

In this omni-channel world your customer is jumping between screens and you need to be present everywhere. Mobile is getting increasing adoption and in line with that Google has removed the option to exclude mobile ads. However, not all campaigns perform on mobile, neither do all campaigns perform on desktop. Google however, offers an option for “Device level bid Adjustment” – which can help optimize campaign performance and reduce Adwords spend. For example if you are trying to Drive downloads of a whitepaper, chances are not many people will download a whitepaper on their mobile device – in such case you can do a heavy negative bidding ( – 90%) etc to prevent/minimize your ads from showing up on mobile. Alternatively, if you are a cab service, you might want keep your desktop bid low and then do a heavy positive bidding ( +60% etc) to increase your ads visibility on mobile.

11. Keyword Cannibalism Can Cost You

While organizing your campaigns and keywords along with match types you need to be careful of keyword cannibalism – what it means is that sometimes if not done right, two or more keywords in the same campaigns can fight with each other to gain visibility, in the process driving up your CPC. This often happens due to use of different match types. For example, you might have the keyword “law books” in broad match and also in exact match. Now when someone is searching for the same, whether Google triggers that ad from your broad match or from exact match will depend on the Ad Rank – which is basically a function of your quality score and CPC. Google however shows alerts in the account when such situation occurs but it is good to be careful while adding the keywords in the account.

12. Landing Page Relevancy & UX

The user experience and relevance of your landing page is important to Quality Score which in turn can impact your CPC and overall cost. The better your quality score, the lesser you pay. While, how to create a good landing page could be a post in itself, here are some easy pointers to follow –

  • The landing page must be relevant to the user’s search query, keywords and to the ad copy
  • It should load fast and must be responsive.
  • The copy needs to be optimized for keywords and conversion
  • Must have clear headline that tells about what is being offered / clearly states the value proposition
  • Trust symbols like security badges, membership badges, client logos and testimonials, customer support numbers, contact details, privacy policy.
  • Clear Call-To-Actions
  • Short lead capture forms

Consider Reading : Instapage Review : A Comprehensive Landing Page Builder You Will Love

While some of these points are very simple and for a pro-Adwords marketer might look obvious, each one of these is very important and can have a significant in lowering your CPC and reduce overall Adwords spend in the account. As a matter of best practice though, you will need to keep monitoring the account closely and doing this changes on a regular basis. If you are putting in a deserving effort and know how to reduce your Adwords spend, you can definitely run a profitable campaign.

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Check out the About SRC Page for more details about Saptarshi Roy Chaudhury.

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