Managing costs in AdWords can be a difficult task. Most online marketers start out by creating two or three general Ad Groups with several keywords in each group. This can be a great way to start ad campaigns quickly. However, too many keywords in an Ad Group makes it difficult to control costs, conversions, click-through-rates, and other variables.

So here's the big secret....The most effective way to reduce cost-per-click and increase conversions is to create single keyword Ad Groups. Single keyword Ad Groups will increase ad relevance, quality score, and conversion rate and decrease your cost-per-click. Here is the quickest way to get started.

  1. Find Your Top 5 Keywords
    The first step to decreasing cost-per-click and controlling your ads is to separate your keywords into several different Ad Groups. It is best to start by separating your highest traffic keywords into their own individual Ad Groups. You can do this by clicking on the "Keywords" tab in AdWords and then sorting your keywords by "Clicks".
  2. Create Individual Ad Groups
    Take the list of your top five keywords and create individual Ad Groups for each term. We recommend setting up keywords as "phrase match" to ensure you are not cannibalizing related keywords you are targeting.
  3. Create Several Relevant Ads
    Once you have created five individual Ad Groups, begin creating several keyword-specific ads for each one. Make sure that you use the keyword in the headline, description, and display URL of your ads. This will ensure ad relevance and lead to increased click-through-rate.
  4. Create Specific Landing Pages
    Next, create individual landing pages for each Ad Group. In order to increase conversions, design landing pages that use keywords you are targeting and match the ad copy.
  5. Wait
    Depending on the campaign's budget wait a few days or weeks and check on the results of your changes. Analyze cost-per-click to see if it has decreased. If the results have been positive, repeat this process for other keywords you are targeting.

Source: Dane, Johnanthan. You're Doing AdWords Wrong.

More About Pay-Per-Click Marketing:

Common Mistakes Do-It-Yourself Pay-Per-Click Marketers Frequently Make
The Benefits of Pay-Per-Click Marketing

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