How To Use Filters to Reduce Google Ads Costs

Google Ads (formerly AdWords) is a powerful tool for targeted marketing campaigns, reaching a vast array of potential customers who are already seeking your services or products. The platform leverages Google's immense user base and sophisticated algorithms, allowing advertisers to specify who sees their ads based on many factors, including demographic details, geographic location, and search history.

However, the intricate functionality and potentially high cost of Google Ads necessitate a deep understanding of your customers' behavior and your company's business model. Knowing how to select appropriate keywords, optimize your bidding strategy, and assess your ads' performance. Therefore, it's essential to understand the inner workings of Google Ads or risk spending excessive amounts for ineffective campaigns.

Often, businesses outsource their Google Ads management to external agencies. While this approach may seem time-saving or advantageous due to the assumed expertise of such agencies, it can also be problematic. Agencies often need more in-depth knowledge about a specific company's products, business practices, profit margins, and customer personas. This lack of knowledge can hinder crafting an effective, cost-efficient campaign tailored to your business and audience.

Instead, having a dedicated professional to manage your Google Ads campaigns, fully integrated and immersed in your business operations, can be significantly more beneficial. They can understand your business and customers comprehensively, leading to highly targeted campaigns that effectively boost your return on investment (ROI).

In one case, my client had hired several agencies over several years to manage their Google Ads campaigns but had yet to see optimal results. The costs were high, and the returns were inconsistent. After being hired, my first step was to apply filters to the existing Google Ads data.  After careful analysis and using appropriate filters, I was able to eliminate both non-productive and overly expensive keywords, and I was able to reduce the cost per acquisition by nearly half. Considering that my client had a monthly budget of $10,000, the initial savings was quite substantial.  Once the efficiencies were realized, we kept the same monthly budget as we could now reach our target customer more effectively, so sales increased due to more effective targeting.

Filters are an important tool in managing Google Ads campaigns. They allow you to dissect the data and identify trends, problems, and opportunities. For example, you can filter by keywords to see which ones are costing more but not generating enough conversions. Similarly, you can filter by ad performance to identify poorly performing ads and replace them with more effective ones.

In this case, applying filters helped to pinpoint exactly where the budget was being wasted. By identifying and addressing low-performing keywords and ads, costs were reduced while improving the overall performance and ROI of the campaigns. This approach, based on an intimate understanding of the business and its customers, combined with efficient use of Google Ads' robust analytics, resulted in a more cost-effective and profitable advertising strategy.

So, regarding Google Ads, remember to understand your customer, leverage all the tools at your disposal, and consider managing your campaigns in-house for a more personalized and effective approach.

Useful Google Ads Filters You Can Use and Modify

Adjust the parameter values as needed according to your needs and circumstance.

Cost without Conversions

Objective: Save money by eliminating keywords that do not convert and have low-quality scores.
Cost > $1:00
Conversions <1
Status: Eligible, Eligible-limited

Low Quality with Cost

Objective: Save money by eliminating keywords that do not convert and have low-quality scores. Low-quality scores increase your bid costs.
Cost > $1:00
Conversion <1
Status: Eligible
Eligible-limited
Quality Score <=5

Keywords that do not show up on the first page of results

Objective: To find words that have unrealized potential.
Average Position > 8  Note: 8 is chosen since it is usually the number of ads displayed.

You may wish to review these words and their ads to determine why they are underperforming. Then, add the Quality Score parameter to the filter and see if the advertisement needs adjusting.

Non-Productive Ads

This filter merely weans out ads that never converted.
Impressions = 0
Interactions = 0
Conversions < 1
Time: All time

I also recommend setting filters based on cost per conversion based on your profit margins. You don't want to spend more money to acquire a customer than what is reasonable based on the sale's profit. Yes, it can happen.

See this Google AdWords support article to learn more about filters and how to create your own.