How To Manage Adwords Campaigns. The Three Step Success Formula

how to manage adwords campaigns

How to Manage Adwords Campaigns? It’s a simple enough question but one I’ve rarely seen answered.

I see lots of posts about setting up an Adwords account but few on what to do once it’s set up!

One of the biggest mistakes new Adwords advertisers do is “set it and forget it”.

They go to all that trouble setting up a new Adwords campaign and then they just let it run without any further improvements.

The fact is that rarely is your first Adwords campaign going to be a winner. Even after all these years of setting up countless Adwords campaigns for myself and my clients, I still get first night nerves when I turn on a brand new campaign.

You would think that an Adwords manager with all my experience would get this right first time every time. The truth is, I usually do but I can always improve on that first attempt. Even now though, I will occasionally find that my first attempt just isn’t cutting it and I need to take action.

You see, whilst you can have all the experience in the world, the true judge of a successful Adwords campaigns are the people searching for what you are advertising and you can only really guess at what keywords and adverts are going to appeal.

That’s why my three step success formula for managing Adwords campaigns is so important.

It allows me to refine and improve my campaigns to make sure I am getting the best possible return on advertising spend for myself & my clients.

What is the Three Step Success Formula?

It consists of the three R’s.




However, before you can use these three steps, there is a crucial bit of work you have to do first.

You see, you need to know what a good campaign looks like. Otherwise it’s impossible to aim for good!

By good, I usually mean what is an acceptable amount to pay for a conversion.

Let’s say your advertising is designed to send people to a page on your website and get them to sign up for a free report in exchange for their email address. You have to ask yourself what is the maximum you are prepared to pay for that email address. Any keywords and adverts that are generating email signups for less than that price are clearly good.

Of course, to be able to work out what that price is, you will need to know your numbers. To do that, you can work back from the value that a sale is worth.

Let’s look at an example:

Let’s say that a client is worth £1000 to you. From your email marketing reports, you know that you manage to convert 1 in every 100 person on your email list into a paying client. Based on that, then you know that to break even you can afford to spend up to £10 per email sign up. Obviously I’ve kept the maths simple and I’ve not considered other cost of sales factors that will have an impact on profit. You clearly need to know your numbers so that you know how much you are prepared to pay for a conversion in Adwords.

That will be your benchmark. That is what good looks like.

Let’s look at each of the three steps to success one at a time.


Quite simply, this step is all about looking for the things that are working in your advertising and making sure you are rewarding those things to make sure they grow. The two key areas I look at are keywords and adverts.


Take a look at which of your keywords are converting well. Go to the keyword tab and simply sort your keywords in order of lowest cost conversion first as I have done in the image below:

how to manage adwords campaign - checking conversion costs

Look at each keyword that is converting at less than your maximum conversion price. Is there room to increase bids to gain more traffic and still come in under the maximum conversion goal? If so, then reward the keyword with an increased bid.

You can see in the example above that my lowest converting cost keyword is actually bidding too low to be on the first page, so clearly I’ve a huge opportunity to bid higher and get lots more traffic for that keyword.

Another option is to pull that keyword into its own Ad Group and write an advert specifically for it. That should improve Quality Score which will nudge in onto the first page without the need for an increase I bid price.

Incidentally, when you sort your keywords in order of lowest conversion costs, you will probably find you get lots of 0 conversions costs for all the keywords that have not converted. You will need to filter then out so you can see the true low cost conversions. You can do this using the Filter option and set is as I have in the example below:

how to manage adwords filter settings


I do the same process with adverts to see which ones are generating conversions are prices below my maximum conversion goal.

What I’m looking for here is “what is the winning message that all the low converting adverts have in common”. Maybe they all mention about Free Delivery in the ad text? Whatever it is, when I find that common trait, I will reward it by starting to use it more often across all my other adverts.


In this step, I look at all the keywords and adverts that are just failing to come in under my maximum conversion goal.

With a little work, I may be able to make them profitable.

Possibly a slight decrease in bid price would reduce the overall cost of conversion. Obviously it will reduce the volume of conversions as well, but now those conversions will be profitable. Similarly, I could write new adverts to improve Quality Score and that would reduce the actual click price I am paying. I can then monitor to see if that is sufficient to make the keyword or advert profitable.

Again, filters are your friends here as you can set up a filter to only show you keywords (or adverts) that are just missing the target. In the example below, I have set a filter to only show keywords that are converting above my goal of $10 but below $15. This will give me a list of keywords that are just missing out on being profitable. These are the ones that I need to Rectify.

how to manage adwords. conversion costs filter settings


Sometimes you will find keywords and adverts that simply do not work. They either do not convert at all or the conversion costs are too high.

In this case, your solution is simple. Remove them.

Never be afraid to remove a keyword or advert from your campaigns. Your time is better spent rewarding the ones that are working and rectifying the ones that are nearly working.

How to Manage Adwords Campaigns – Summary

So that’s my three step process. No matter what reports I look at in Adwords, I am always looking for things to reward, to rectify and to remove. It’s a very useful mind set to get yourself in as it keeps you focused on improving the performance of your Adwords campaign. Otherwise, it’s really easy to get bogged down in the detail of the many reports Adwords will make available to you.

Also, you should review your conversion goal number regularly. Things change. Costs can go up and so your goal is now wrong.

Of course, if you can improve the maximum you can spend to get a conversion then that opens up lots more profitable opportunities. Suddenly all the keywords that were borderline profitable will become profitable. Also, all the already profitable keywords will now have a higher ceiling to aim for so you can bid higher and drive even more profitable traffic to your website.

Being successful is always a numbers game. Know your numbers and play to your strengths.



About The Author

Mike Seddon

I launched my first business in 2001 selling software. I started using Adwords to drive traffic to my software business and found I had a talent for it. At the time, I networked a lot locally with other businesses and I found many of them had suffered very bad experiences with various so called “professional” Adwords companies. Quite often I would help these business out of the mess they had got into. I started selling Adwords Management service back in 2006 and I’ve not looked back since. My approach is open and honest. My view is that if someone has to confuse you to win your business then it’s likely they don’t know what they are doing! In 2010, I wrote the book Simply Adwords and shortly after that it was picked up by Amazon here in the UK. Soon it went global to all the other Amazon stores and remains there today. I regularly give talks about Google Adwords and also the other website promotion techniques such as SEO, Social Media and more. In 2011, I was invited by none other than Perry Marshall to speak on Advance Adwords techniques.

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