6 Reasons Why Small Businesses Often Fail With AdWords

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Managing AdWords campaigns for small businesses offer many challenges besides just optimizing AdWords in the regular sense. Many small businesses have distinct budgetary challenges, their websites are often not optimal and many lack a general understanding of how Google AdWords works.

As an AdWords manager you therefore need to be able to explain more facets than just the basics about AdWords and make yourself understandable to everyone. In White Shark Media we manage small to mid-sized AdWords accounts usually ranging from $1,000 to $10,000 monthly budget.

We evaluate a lot of AdWords campaigns every month and even though there are many different factors, you keep seeing the same mistakes over and over. If most small businesses could avoid these mistakes they would have better chances of reaching success on their own.

I truly believe that you should get your feet wet in a field before you hire external help. The lack of knowledge in the AdWords field is one of the main reasons for many small business owners to say they have been scammed once or more by a so-called AdWords agency.

Here are 6 of the biggest mistakes I see over and over again in small business AdWords accounts.

1) One Campaign with One Ad Group For All Keywords

AdWords campaigns in the mainstream industries can easily be successful with a decent budget. It’s however time-consuming for new advertisers to set up an account properly.

Creating one campaign with just one ad group and including all your keywords herein is a surefire way to waste a lot of money. AdWords is all about relevance. In most industries and local areas you can find advertisers who have been using AdWords for years.

Their campaigns are frequently set up granularly with properly written and tested ad messages for each keyword theme.

If you just put all your locksmith keywords in the same ad group you’ll end up being less relevant than your competitor who will walk away with all the qualified clicks.

You’ll definitely get clicks – It’s very rare to see AdWords campaigns set up in such a wrong way as to not get clicks (kudos to Google) – but the clicks will not be qualified and the users will most likely not convert for you.

90% Relevant Is Not 100% Relevant

I often hear from small businesses that when somebody is searching for a key replacement service they’re actually looking for a locksmith. Setting up an ad mentioning that you’re a locksmith might make sense if you’re thinking in the regular banner ad mindset.

However, in AdWords it’s all about being the most relevant choice on the page. Imagine you’re searching for a key replacement service and you see these two ads:

Fast Key Replacement Services
Get Your New Keys Within 15 Minutes.
Call Today to Schedule.

All Locksmith Services
We Offer Everything In Locksmith Services.
Call Today to Schedule.

Searchers will look at the two ads and compare them. By looking at the second ad they will be 95% sure that you do offer key replacement services. However, with the first ad they are  100% sure that you offer key replacement services and they even get shown a specific benefit from using that company (15 minute turnaround time).

The more ad groups you choose to use when setting up your AdWords campaigns the better message you can send. This will directly relate to how qualified your visitors are and how good your results will get with AdWords.

2) Limited By Budget

Being limited by budget is one of the most frequent cases of wrongful bid management that I have come across. It’s also one of the easiest things to fix if you’re a small business.

Having campaigns that have the Limited By Budget status means that your budget limit is being reached on a somewhat daily basis before midnight. When your budget limit is reached your ads will stop being shown until midnight which is when your budget is reset.

Often the Limited By Budget status goes hand in hand with high positions and a relatively small budget limit. Some small business owners wrongfully have the idea that being in the top spots is all that counts. Thinking about this is like thinking about normal advertising where you often pay a fixed fee as you need to ensure that you get the most amount of visibility.

In AdWords it’s different. You shouldn’t really care about visibility when you’re a small business. Sure, visibility becomes a metric when your account has matured, but in the beginning it’s all about the conversions and ROI.

You don’t get any conversions out of visibility. The key metric here are clicks. You want to get as many clicks out of your initial budget as possible. With Limited By Budget campaigns you often see that the campaign stops being shown at mid-day and has an avg. position over 4.

By lowering the bidding by ~30-50% you’ll get a lower position and CTR, but you will also pay less per click. Your budget will not be reached too early in the day and you can get more clicks as a whole:

Limited By Budget:

  • 1,000 impressions
  • 2.8 Avg. position
  • 20 clicks
  • $2 per click
  • 2% CTR
  • $20 budget
  • Campaign stops being shown at 2pm

Not limited by budget:

  • 4,000 impressions
  • 5.6 Avg. position
  • 48 clicks
  • $0.41 per click
  • 1.2% CTR
  • $20 budget
  • Campaign is shown all day

You might think this is just a theoretical example, but I’ve seen this change (and even bigger ones) happening at least a hundred times.

3) Only Using Broad Match

By only using Broad Match keywords you’ll end up giving Google more money than you actually have to. Many small businesses don’t know that keywords in AdWords have different types.

The standard match type is Broad Match. Broad Match has an expansion option that lets Google show your ads for anything they find remotely relevant.

A keyword like lawn care services in Broad Match can enable your ads to be shown for the following queries:

  • lawn moving job
  • how to move a lawn
  • cut grass when it rains
  • spring clean up services
  • lawn mover maintenance
  • blade cutters

Keeping to Broad Match Modifier instead of regular Broad Match is a good way to ensure that you’re only paying for the most relevant clicks.

4) Too Many Changes All The Time

Even though many small businesses set up their AdWords campaigns and forget about optimizing them, then there is the opposite category as well. If you keep making changes in your AdWords campaigns you’ll never get the necessary consistency to achieve statistical significance.

Advertisers having a new promotion every week or making changes on a daily basis is one of the most frequent mistakes I keep seeing. But don’t take this as a suggestion not to optimize your AdWords account at all. Optimizing your account is an important aspect of getting a successful AdWords account, but making changes every day clashes with the fact that you should optimize your AdWords account based on statistics.

Optimizing solely based on the statistics for the day is bad practice that in most cases will make your AdWords account perform worse and worse.

5) Wrongful Implementation of Conversion Tracking

Mistaking the implementation instructions for AdWords Conversion Tracking with the instructions for Google Analytics can lead you to not get any real information out of your AdWords campaigns.

Implementing the Conversion Tracking code on each page will give you nearly 100% conversion rate. It is quite easy to spot that this is wrong.

The problem gets bigger when you implement the code on the actual contact form page or another individual page on the website and you mistake the conversions for real statistics. I’ve disappointed many AdWords advertisers who have come to me, rather proudly, saying that they are pretty successful with AdWords, until they hear me say that they shouldn’t  really be using their conversion statistics too much.

6) The Ads Aren’t Written For The AdWords Format

Writing for the AdWords format is a challenge to say the least. Even I get challenged at times when I think of the perfect ad message that subsequently can’t seem to fit into the AdWords format. On top of that, I’m also required to fit in a Call-To-Action which makes it even harder.

Dimmers net SEJ

The mistake with the dimmers.net ad is: Missing a period after Selection causes the ad to be hard to read. Adding a period would also increase the ad exposure by putting the first description line in the headline.


The mistake with the teamwavelength.com ad isThe headline and description lines are written like a full sentence. AdWords ads aren’t suited for full sentences. Small messages with a conscious choice of words work best.

Work Smarter With AdWords When You Know The Basics

Even though many AdWords experts differ in their strategies many others agree on the approaches that are most effective for smaller accounts. Working with AdWords is somewhat simple for the advertisers who take the time to understand how the search engine works and how AdWords plays a role in the online ecosystem.

Getting your feet wet and understanding the basics of AdWords will give you a better chance of finding success with AdWords either by managing your campaigns in-house or through a Third Party AdWords Agency.

Andrew Lolk

Andrew Lolk

CMO, Co-founder White Shark Media® at White Shark Media®
Andrew Lolk is the author of the 189-page free AdWords ebook The Proven AdWords Strategy. He's worked in AdWords since 2009 and have co-founded White... Read Full Bio
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  • Umer

    What I have learned from my experience is that mostly small/new businesses fail with Adwords because they fail to earn visitors’ trust after they reach on landing page. I have created many compelling campaigns but resulted in lowest conversion rate. This is the one of the problems as well.

    Thanks anyways Andrew!

    • Andrew Lolk

      That’s true, Umer..

      I’m however a fan of not outright blaming landing pages. In some industries the landing page can actual be very bad and the results will still be good. Of course this doesn’t work in highly competitive industries like health, gambling, travel or other industries that have embraced their online experience early on.

      From my experience, the more local and call focused a website is, the less important the landing page becomes.

  • David Lyon

    Spot on with regard to the most common pitfalls that that SMBs face when they make the leap and manage a campaign for the first time. Most SMBs got into their respective field because they are passionate about it, good at it or both…not to manage a digital marketing effort much less an adwords campaign which requires a significant amount of time and a reasonable degree of expertise. Thing is, there are now many SMBs who got their start as digital marketers that more established SMBs are up against when it comes to acquiring new business online.

    • Andrew Lolk

      I agree completely, David..

      Trying to compete with established competitors who already have experienced marketers working for them in some way or another can be very tough.

  • Vas

    You basically described my first and last failed AdWords campaign in perfect detail with your list of mistakes. I am absolutely stunned that I literally did everything wrong! After reading this piece, I think I am going to give Adwords another try. Great post.

    • Andrew Lolk

      Hey Vas,

      I’m glad you liked the post.

      I can recommend you reading my free AdWords book (http://www.whitesharkmedia.com/free-adwords-book/). It contains a lot more advice for your first campaign.

      Let me know if it works out!

      • Vas

        Thank you! I signed up for it, and will definitely check it out.

      • Liz Yen

        Thanks a tons Andrew

        I make #4 mistake too. I was too careful and kept changing my campaign all the time. It became worse and worse.
        You’ve saved me. I will leave my campaign more time

        Thank you, again. Keep posting such amazing articels

  • David Rothwell


    Totally agree. Traffic is useless without conversions. And conversions themselves are useless unless you are measuring whether you make more money on them than you spend according to your monetisation strategy.

    That’s why I only work with businesses who know their numbers, have a track record and optimization opportunities I can work with, and who want to scale up their ad spend because they can see it’s working.

  • Paul Wood

    Great post. Seen all of these many times when reviewing AdWords accounts for new clients.

    My issue is that Google makes it far too easy for small businesses to waste money on poor performing campaigns. The AdWords interface is a pretty complicated tool and yet the service is directly marketed at small business owners. The problem here is that the people opening accounts themselves do not have the time to become experts and so inevitably end up wasting money on the account and then concluding that AdWords does not work for them.

    The whole system needs to become much more user friendly or it needs to be made clear that only professionals should be using it if you want to see genuine results.

    • Andrew Lolk

      Hey Paul,

      I couldn’t agree more. The way AdWords is set up is when an advertiser makes a mistake it ends up costing them more money – not the other way around.

      1) The standard match type is broad
      2) The standard match type for negative keywords are exact match

      This makes sense to a degree, but it’s a great example of how AdWords is a big cash cow for Google. Of course they make a lot of money off the good AdWords accounts with solid ROI, but I’m sure all these smaller accounts are the icing on the cake 🙂

  • Patrick Hare

    I managed PPC campaigns for a number of years and the #1 problem for clients with existing accounts was that they had “content match” running, which was set up by default when the campaign was created. One client was spending an extra $30K per month on contextual ads that brought in zero conversions. His agency could have turned this off at any time. It is very important to note that many agencies managing PPC get paid based on a percentage of monthly spending, so they may have a conflict of interest when it comes to focusing on the best value for the customer.

    Even with DIY PPC, it is important to either shut off content bidding or cut the minimum bid for content to a fraction of the bid for search match. One of the reasons why Adsense used to be a cash cow for publishers is that these bids were often identical, so site owners could make money off arbitrage by steering cheap traffic to pages where Adsense ads created high commissions. If you don’t keep your eye on content match, you may be subsidizing people who create spammy content.

    For those people who wanted contextual exposure, I would create secondary campaigns and work to lock down the sites on which the ads would appear. One of the pitfalls with content match is that sometimes an item in the news can create a barrage of content that matches up with items in your keyword list. Depending on your ad rotation settings, you may end up blowing your campaign budget in a matter of minutes. (If you are lucky enough to be selling something relevant to a news story, which is rare, you can always open up your budget to accomodate.) In any event, content match ads typically have to be written to catch a broader range of users than keyword-based ads.

    One of the other key things I noticed when taking on new accounts was the lack of dynamic keyword insertion. On phrase match and exact match terms, this was one way to ensure that the searcher’s keyword phrase was reflected in the ad text, and the bold text on that keyword made for competitive clickthrough rates even when the ads weren’t in the top 3 positions.

  • camzila

    Really good read and thanks for the info!
    Ps: Can you give us couple exemple of good ads would be for selling pen exemple. Thx

    • Andrew Lolk


      It depends a lot on how your company presents yourself. If you have the biggest selection, lowest prices, wholesale etc. The best ad for your business might not work for your competitors.

      I would try something like these:

      Big Selection in Bullet Point Pens.
      Fast and free shipping every day!

      High Quality at Affordable Prices.
      Pens with comfortable handle.

      The possibilities are endless. Just think about how you can include your keyword, a benefit and a call-to-action. If you do this, then you can write some very good ads over time.