How to Optimize Google Ads Cost

How to Optimize Google Ads Cost

5 min
05 Jul 2024
Two women discussing Google ads cost.

Avoid Vanity Metrics

If you’re trying to get the most out of every dollar in your budget, you need to examine your data. If you have too much data to keep track of, you may get distracted from the really important data. Clicks, impressions, click-through rate, and ad position are common vanity metrics. These metrics may look impressive on the surface but don’t contribute to business objectives or your brand’s ROI. 

Vanity metrics are important, but you’ll want to prioritize conversions, ROI, cost per acquisition, or customer lifetime value. These meaningful metrics can help you make informed decisions about your campaign and where to improve or cut back on ad spending.

A screenshot of the Google Ad campaign dashboard, displaying vanity metrics.

Create an “Impression to Conversion” (ITC) Column

If you’re working with a reduced budget, you can eliminate vanity metrics and create an Impression to Conversion column (ITC). This custom column helps you understand your ads’ full performance with the following equation: ITC % = Conversions/Impressions.  Typically, we measure an ad’s click-through rate (CTR) and conversion rate (CVR) separately in two columns. However, some ads may have a high CVR but a low CTR, while others might have a high CTR but a low CVR. 

This raises the question: should you prioritize ads with high CVR or those with high CTR? ITC allows for quick identification of the best-performing ads in your Google Ads campaign, simplifying optimization decisions. To create the column, follow these steps: 

  • Click “modify columns” in the dashboard of your Google Ads account 
  • At the bottom of the screen, click “Custom columns”
  • Add the calculation of conversions/impressions, as in the image below
  • Now, just add this new column to your dashboard, and you’re good to go
The custom column section of the Google Ads manager.

Look for Negatives on Demo Data

Everyone’s heard of negative keywords, but you should also consider negative targeting based on demographic insights. For instance, if certain age or gender groups show low conversion rates, use bid modifiers to adjust your bids accordingly.  If mobile performs significantly worse than desktop, you can apply a -50% bid modifier to mobile clicks to optimize your budget effectively. Other useful bid modifiers include adjusting bids based on locations, specific hours or days, recent site visits, or inclusion on lead lists.

Identify Relevant Exact Match Keywords (and Pause Your Phrase-Match)

The third strategy to optimize Google Ads performance on a reduced budget involves adding more exact-match keywords. This should always be a priority in your paid search campaigns, especially when trying to reduce your Google Ads cost. The key is not just adding exact keywords but also incorporating long-tail keywords. Long-tail exact match keywords typically:

  • Encounter less competition
  • Allow for lower bidding
  • Facilitate the creation of more targeted and relevant ads (if you’re unfamiliar with Single Keyword Ad Groups (SKAGs), now is a good time to explore them).

It’s crucial to consider pausing your phrase-match keywords during this optimization process. This prevents your ads from triggering less relevant searches that may consume your budget without delivering conversions. This move helps prioritize budget allocation towards exact-match keywords, maximizing ROI.

A screenshot of the keyword section of the Google Ads manager.

Use In-Market Segments to Refine Google Ads Strategy

Beyond traditional metrics, Google Analytics “Audience” tab offers insights into user purchase intent through “In-Market Segments.” These segments categorize site visitors based on their current interests and buying behavior. 

By setting up conversion goals in Google Analytics and analyzing performance within the In-Market Segments report, you can identify audience segments with high conversion rates. For example, if visitors interested in “Financial Services” show notably higher conversions, you can integrate this audience into your Google Ads campaigns.

You can also apply bid adjustments again, such as +20%, to high-converting segments within your Google Ads account. This strategy ensures that your ad spend is focused on audiences most likely to convert. These insights from In-Market Segments can refine audience targeting and improve campaign effectiveness by aligning bids with actual purchase intent data.

A screenshot of the Google ads audience manager, displaying in-market segments.

Continuous Testing and Learning

It’s all about staying curious and open to trying new things. By regularly testing different ad creatives, bidding strategies, audience segments, and campaign settings, you’ll discover what works best for reaching your goals without overspending. 

Your brand should embrace a mindset of experimentation and adaptation to keep your Google Ads cost down and your campaigns responsive to changes in customer behaviors. This approach increases the impact of your advertising investment but also ensures you’re getting the most bang for your buck.

Download our free guide to learn how to measure SEO ROI through content marketing

Download Download


This field is required.
This field is required.
Please enter a valid email address.
This field is required.
This field is required.
This field is required.
Choose your marketing budget:
Choose the services you need:

Тhere were some errors in your submission.
Please try filling in the form again.

Message successfully sent!