At least for online marketers engaged in PPC efforts.

They say great minds think alike. So it was no surprise last week when Andrew Goodman and Bryan Eisenberg managed to write nearly identical columns about the Google AdWords "tax".

So what the heck is this tax and why do we have to pay it?

Andrew calls it the tourist tax, Bryan calls it the simplicity tax. Names aside, all it boils down to is the price you pay for being in a hurry, taking shortcuts, or not asking the "locals."

Very often, we are lured in by the fact that we can starts showing our ads to the online world in as little as 10 minutes. Pick a bunch of keywords, decide what you want to pay for them, write some ads, and you're all set. Right? Wrong!

You can read Andrew's column here and Bryan's column here. But what I really want you to do today is answer the following:

3 questions to make sure you are not getting taxed


1. Did you need to opt out?

Your AdWords campaigns are opted into the entire Google Network by default. This includes Google search, search partners, and the Display Network. If you're not optimized for the entire network, running along with the default settings will only hurt you.

2. Did you create keyword groups?

Because of the way this part of the process is set up, people end up creating keyword groups instead of ad groups. You almost have to work this backwards. Instead of creating a list of keywords then grouping them, create themes for your ads, then come up with keywords that fit nice and tight. Do that and you'll have highly targeted ads with decent CTRs and Quality Scores.

3. Did you bid lazy?

Ad group max CPC bids apply by default if you don't specify otherwise. Start off by defining what your goals are. Here are a few suggestions:

  • Clicks --> use CPC
  • Visibility & awareness --> use CPM on Display
  • Conversions --> use CPA

It's perfectly fine to start off in automatic mode until you understand and assign different values to your keywords and ad groups. Switch to manual mode when you're ready, or go semi-automatic with the bid simulator to see the possible effects of adjusting your bids.

Now What?

Those were just a few of many possible reasons someone can get penalized in AdWords. Make sure you go back into your account and make any necessary adjustments. The last thing we want is to hire PPC Accountants to handle our AdWords taxes.