When it comes to search advertising, pay-per-click (PPC) ads lead the way. Unfortunately, a lot of small businesses are wasting money on PPC ads – not because they don’t work, but because they’re using them in the wrong ways.

Stop Making These 4 Mistakes

Successful business leader John Wanamaker once said, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

For years, advertisers struggled with understanding which of their advertising efforts were producing results and which ones weren’t yielding sufficient ROI. Then came PPC advertising, which removes much of the guesswork from the equation.

PPC advertising has become the norm in the digital marketing and advertising world over the last 15 years. Billions of dollars are spent each year on PPC ads, and the train doesn’t appear to be slowing any time soon. Research shows that 49 percent of people click on text ads. In fact, Google Ads receive 65 percent of clicks that start with a buying keyword (meaning organic results get just 35 percent of the traffic). Furthermore, PPC visitors are 50 percent more likely to purchase something than organic visitors.

While some businesses have figured out how to effectively leverage PPC advertising for optimal results, many are still making costly mistakes that inhibit lead gen efforts and sales results. Here are some of the most common errors and costly shortcomings:

1. Lack of Understanding

Not all PPC ads are created equal, nor should they be designed or delivered in the same way. Failing to understand the difference between search, display, and social is a huge mistake.

Search-based PPC ads are fueled by intent. The user is looking for something, and is telling you that they’re interested in buying (either from your brand or another brand that offers similar products, services, or value).

Display PPC ads are targeting an entirely different audience – one that may have no recognition of your brand. It’s also possible that they aren’t actively looking for the products and services you sell.

Then you have social PPC ads, which are sort of a mixed bag of goods. Users may be familiar with your brand, but not looking to buy. They could also be unfamiliar with your brand, but be in the process of making a purchase decision.

“To correct this type of mistake, treat your audiences as different buckets and provide them with a more specialized experience depending on their interest or intent,” marketing expert Ally Sabrowsky advises. “Whether it be through language in the ads themselves or a specialized landing page experience, make sure you tailor to your audience types.”

Taking a DIY Approach

Technically, anyone can develop their own PPC ad strategy, execute, measure results, and optimize. Unfortunately, very few companies experience real success with a DIY approach.

When you attempt to handle PPC on your own, it can take weeks or months to fine-tune your strategy and find the ads that resonate with your audience. By this time, you’ve wasted thousands of dollars and limited your financial flexibility. You also end up taking time away from other core business tasks that command your attention.

It’s highly recommended that you work with a search advertising expert from the beginning. Any upfront expense of working with a PPC expert is more than offset by gains in click through rates and conversions.

Too Much Focus on Cost-Per-Lead

While it definitely matters, getting too hyper focused on cost-per-lead is a recipe for disaster. The problem is that cost-per-lead is an indicator of PPC success, not a measurement of PPC success. In other words, you can have an extremely low cost-per-lead and still not enjoy profitability. On the flip side, you can have a higher than average cost-per-lead and generate meaty margins.

Make sure you aren’t zeroing in on any one metric at the expense of others. And any time you do focus on a specific KPI, make sure you’re directly tying it to the bottom line. Try measuring lead quality using lead-to-opportunity and cost-per-opportunity ratios. This tells you more about the success of a PPC campaign.

Bidding on Too Many Keywords

The average PPC campaign produces all of its sales from just a fraction of its ads. Out of 20 different PPC ads, you’ll find that just one or two are responsible for sales.

Bidding on too many keywords is a mistake. Rather than targeting all of the basic, top-performing keywords in your industry, step back and focus on a few long-tail search terms that resonate with your audience. By honing your approach, you’ll have more time, energy, and financial resources to generate tangible results.

Ace Your PPC Ad Strategy

PPC advertising isn’t rocket science. The good news is that you only spend when an ad is clicked. This gives you the opportunity to study what’s working and to avoid spending on ads that don’t resonate with your target audience. Use this to your advantage and continually optimize and tweak things until the correct approach and balance is discovered.

Jenna Cyprus is a freelance writer from Renton, WA who is particularly interested in travel, nature, and parenting. Follow her on Twitter.

PPC stock photo by Gustavo Frazao/Shutterstock