Recently, I’ve been getting a lot of requests to audit accounts for overspending, so I thought I’d share my checklist of questions I ask of accounts.
Note this is going to be very Google oriented, but there are still ideas in here for all channels.
While there are other questions you can ask, these are the main questions to determine overspending:
- Are the conversion actions accurate?
- Is the cost per click higher than average?
- How many exclusions are present?
- Is the budget pragmatic for the targets it’s being asked to support?
Conversion Actions Accuracy?
One of the biggest culprits of overspending is actually the efficacy of conversions.
If conversion tracking isn’t accurate, you’re setting up bidding strategies to over-allocate the budget to parts of your account that don’t deserve the budget.
Here are the most common reasons conversion tracking can go awry:
- Double Counting: This happens when an action gets triggered multiple times for the same user or when multiple actions track the same action.
- Conversion Values Not Set: The default $1 value is okay for launch campaigns but not useful for long-term success. Make sure to either lean into micro conversions or set true conversion values grounded in offline conversion uploads.
- Counting Too Many/Few Actions As Primary: Primary conversions are the ones that will influence your reporting and bidding. If you have too many or too few set as primary, it could mean you’re getting false positives or negatives in your conversion metrics.
To check your conversion tracking, you’ll need to go to the goals section in Google Ads.
Screenshot from Google Ads, January 2025Cost Per Clicks Higher Than Average?
While cheaper CPCs can be a sign of irrelevant queries and placements, expensive CPCs are just as bad. They can be a sign of the following:
- Your campaigns are pulling you into unintended auctions with higher CPCs.
- The locations you’re targeting have too much of a spread in auction prices.
- A new competitor entered the space and is driving up CPCs.
The best way to understand the root cause of increased CPCs is to check the reports under the “Insights” section. Using “When and Where” ads served, you’ll be able to sort placements by cost.
Screenshot from Google Ads, January 2025Interestingly, lower-volume locations can sometimes be more expensive than high-volume locations.
Make sure you assess locations by probability of profit instead of emotional attachment.
Screenshot from Google Ads, January 2025As we can see in the search term report, “tinnitus sound therapy” is dramatically cheaper than “ringing in ears.”
While both are of debatable value to the advertiser, one is much easier to justify retaining spend.
Screenshot from Google Ads, January 2025Auction Insights allows you to see if there are new competitors, as well as if you’re suddenly competing with content that doesn’t make sense for you.
If you’re spending too much, you might be in auctions with competitors bidding aggressively or entering the wrong auctions altogether.
Are Exclusions Present?
Surprisingly, not every brand uses negative keywords, placement, or audience exclusions.
This might be because they’re using smart bidding and want to lean into the AI, or it might be because the interface changes, and it’s hard to keep track of how to add exclusions.
Negative keywords are important because they block waste and ensure budget is directed effectively.
Placement exclusions can be website or location-based. Audience exclusions can use first-party or ad network audiences to filter out existing customers or people who are close but not quite the ideal customer.
While most exclusions can be added at the account level, it’s still important to check campaign level and ad group exclusions (especially negative keywords).
Screenshot from Google Ads, January 2025Performance Max allows you to exclude audiences – though you need to do so at the Campaign level.
By specifying any of the audiences that have shared consent with you, you can exclude them from PMax campaigns by choosing to bid for new customers only.
If exclusions aren’t present and CPA is high/ROAS is low, there’s a good chance you’re overspending on wasteful clicks.
Can The Budget Support The Targets You’ve Set
Wasted spend can come from too many campaign targets (locations, audiences, keywords, etc.). This is because different targets have different auction prices, as well as overall value to the business.
If a campaign is asked to support all parts of the business, it likely has a lot of budget misallocation.
For example, if a company offers three services ($500, $5000, and $2,500), there will usually be different margins and acceptable ROAS associated with each service.
If they’re all sharing the same campaign, it will be hard to ensure each service gets enough volume.
Similarly, if you ship products nationwide, but you know you have an easier time fulfilling orders from certain parts of the country, you may have an easier time focusing budgets by region. This also applies if you have established demand vs. emerging demand.
While manual bidding and ad group-specific targets can offset this to a certain degree, all ad groups share the campaign budget.
Ultimately, whatever is driving conversions will get priority access to the budget. This could mean high-value and expensive parts of the business lose out because cheaper volume plays to win.
Conversely, you may not get enough volume because the more expensive ideas won out.
Final Takeaways
It’s normal to worry about overspending in PPC. However, if you take the time to audit your account for potential hurdles and strategic pitfalls, you can ensure your budget is always operating at peak efficiency.
Build in a weekly audit to check for auction prices and placements, with quarterly audits to ensure targets are aligned.
More Resources:
- How To Avoid Search Budget Cannibalization For A Better Share Of Spend
- From Launch To Scale: PPC Budget Strategies For All Campaign Stages
- PPC Trends 2025
Featured Image: Paulo Bobita/Search Engine Journal
