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Adwords ROI dramatically dropped



5:11 pm on Mar 13, 2006 (gmt 0)

10+ Year Member

For the last two years, I have successfully been running an Adwords campaign, spending around $140 a day and getting a good ROI from it.

However, from the beginning of March, my ROI has dramatically declined, while my Adwords costs have moderately increased.

I haven't touched anything, neither in the web site, nor in the Adwords campaigns.

Unfortunately, now I'm losing money. Have I suddenly exhausted my market? Has the quality of Adwords traffic decreased? Has anyone experienced a similar scary scenario recently?


7:24 pm on Mar 14, 2006 (gmt 0)

10+ Year Member

Are you running content advertising? Content has the tendancy to fluctuate and be dangerous to your ROI because of the incentive for AdSense affiliates to click on their own ads.


9:52 pm on Mar 14, 2006 (gmt 0)


Couple of reasons why this might be happening, and you are not alone. My clients have seen declining conversions and escalating prices as well - others' have said the same here as well....all starting around the end of February.

Yahoo-Overture is losing advertisers at an incredible rate these days - and so people are shifted more and more of the budget to Google Adwords. When you have more advertisers competing essentially for the top 3 horizontal spots, you will see lower sales conversion percentages and higher CPC prices.

However, Google has been adjusting their CPC algorithm in their favor for some time now - and this will likely get worse before it gets better. Not much you can do really.


9:53 pm on Mar 14, 2006 (gmt 0)

WebmasterWorld Senior Member adwordsadvisor is a WebmasterWorld Top Contributor of All Time 10+ Year Member

I haven't touched anything, neither in the web site, nor in the Adwords campaigns.

pmurillo, this is just my opinion, so please take it for what its worth. ;)

The AdWords program has grown substantially in the past two years, and your competitors are both more numerous and more sophisticated - having an additional 2 years experience to draw from.

Seen in this light, I think you are not doing yourself any favors by not changing anything in either your ad campaigns or on your site. I'd really advise constantly testing, monitoring, learning, and revising as being important keys to continued success.



12:20 am on Mar 16, 2006 (gmt 0)

10+ Year Member

Don't know why this is not on this board but has anybody else noticed that adwords are now not showing on top of the page for many keywords. Natural results are now all the way at the top of the page and all adwords are off to the right. I noticed this on three word strings about two weeks ago (like philadelphia marriage counseling) and now today on broad keywords like marriage counseling. This of course would explain the sudden drop in conversions and rise in prices as natural search garners the best traffic and adwords customers bid for a much lower share of the traffic.


12:30 am on Mar 16, 2006 (gmt 0)


I have noticed a trend towards fewer horizontal paid listings. For example a term that had 3 'top' horizontal
spots may now have 2....terms that had 1 may just have righthand side paid ads.

Hard to say why this trend is happening. If a term has zero horizontal paid ads, Google is basically 'walking away' from the majority of the click money for that term - I say this because it's well documented that the ads on the right hand side receive only a fraction of the clicks if you were say one of the horizontal spots.

Now Google has a finanical incentive to reduce the number of horizontal paid spots from say 3 to 2....It's supply and demand, you really have to be in a top spot to get a decent click volume, and as we all know, Google change any percentage of your max. bid.

Hope this helps, like I said I have seen a trend towards less horizontal ads.

By the way, has anyone else been having a record low conversion day :)

Richard Overvold

1:07 am on Mar 20, 2006 (gmt 0)

10+ Year Member

pmurillo, this is just my opinion, so please take it for what its worth.

AWA, usually I don't do much posting here (busy keeping up to date with changes), but I have to say, Google Adwords has had an "all of a sudden" drop in ROI in March on my side too. We're talking normally about $500 spent a day, and roughly 400% ROI, and all of a sudden it fell apart. It was so bad the other day that I actually lost money, that was the first time in about a year that I lost money in Google Adwords. I also noticed a spike in competitor terms as well for just one day. I would say that it's just a shift of some kind, but I can speak for others when I say that this is "all of a sudden".


1:33 am on Mar 20, 2006 (gmt 0)

Something is going on and I believe it is competitor click fraud.

Yahoo-Overture is basically done for any legitimate long-term advertisers - most have shifted their entire online advertising budgets to Adwords.

This unfortunately makes Google's 'near monopoly' even worse for advertiser. Prices are out of control and now Google has a huge surge of competitor click fraud.

This whole Pay Per Click game is out of control, Google and Yahoo are not doing nearly enough to police click activity and award credits. Google needs to increase their proactive monitoring of click fraud, it's not enough only to research advertiser complaints.

Not sure how this whole 'game' as I like to refer to it will play out, but I'm certain things for advertisers' are going to get a lot worse before they get better.


1:37 am on Mar 20, 2006 (gmt 0)

10+ Year Member

Hey all,

Have been doing a lot of testing in my adwords campaign; trying different keywords, links, and ad text. This all cam about because I too saw a loss in my ROI and thought I had made one change to many. Guess it was not just my change, but maybe more of a Google change?


1:51 am on Mar 20, 2006 (gmt 0)

I hope this thread gets Google's full attention.


1:55 am on Mar 20, 2006 (gmt 0)

It also seems like Google is currently involved in doing too many things at the same time. Heck even Google mail has been terrible lately in terms of performance and downtime.

I think they are scrambling too fast to diversify and their core revenue stream - Adwords appears to be suffering.


2:14 am on Mar 20, 2006 (gmt 0)

10+ Year Member

I agree and too hope google takes a look at this thread. Possibley, there is some "mistake" that they have thought most would not notice. I am not much of a discussion guru and thought my reply would help to make this issue a BIG DEAL!


2:33 am on Mar 20, 2006 (gmt 0)

10+ Year Member

I hardly think this is competitor click fraud. I rank highly for natural search and Adwords consistently on some campaigns and for those campaigns my traffic has mearly shifted from the PPC to Organic Hits. Of course this is good for me. My adwords bill is declining and my over all lead generation has remained the same. I am going to have to shift resources to the Natural Search side to maintain my position as I am sure the market will figure this out. The question is why is Google doing this. It is now clear that the Adwords don't go "up north" on weekends for many keywords. During the week they go back up. I think this must mean that Google is optimizing thier algorithms by the time of day and by the day of the week. Durring the week people are shopping and on the weekend they are mostly looking for info... this is just my theory. I think competitor click fraud is not a factor. It does happen, but not on a large scale. It's like credit card fraud -- maybe 2 to 3%

Calc Richmond

9:24 am on Mar 20, 2006 (gmt 0)

5+ Year Member

Hi all, just for my 2 cents worth...I have to agree that both search volumes and ROI seem to have spiked down once again. At the start of March it was real bad then 3 days later it was like a tap had been turned on and everything seemed to kick in again and now it seems to be repeating itself so hopefully traffic and ROI levels will rise once more :S


4:30 am on Mar 21, 2006 (gmt 0)

10+ Year Member

Very interesting thread.....

Sounds like what I was complaining about in Nov and Dec.... then Jan and Feb were HOT. March has been good but have had many days where my CTR went way down and conversions were down... Still making money. I'm 98% content network..

For what it is worth AWA on your comment on constantly changing......

I beleive the oposite.... I do better when I've setup a campaign and get it to where I'm making money....then I leave it be..... I now have campaigns that have not been touched for 2 years....and are still making excellent returns.

They have good times and bad times. Personaly I've found in the long run it is more dificult to make money if you are always making changes.....having to wait for ads to get approved...sometimes it is easy to make a rash decision just because you had one or two bad days.....

Thats just my experience though....



8:55 am on Mar 21, 2006 (gmt 0)

10+ Year Member

My observation is that there is a "minimum" bid amount to qualify for the top horizontal positions (based on the CTR performance of your ad campaign).

I believe that Google also periodically stops displaying horizontal ads at some time intervals (20-30 minutes). What this does overall is lower everyone's CTR ..... which ultimately drives up the average CPC.

Basically, more people click on the natural organic search results rather than right side ads .... unless there are top ads showing (they have an overall higher CTR in general).

Just my own observations.

Richard Overvold

12:31 pm on Mar 21, 2006 (gmt 0)

10+ Year Member

Sounds like what I was complaining about in Nov and Dec.... then Jan and Feb were HOT. March has been good but have had many days where my CTR went way down and conversions were down... Still making money. I'm 98% content network..

This is exactly what happened with me! Only 1 difference, I don't, and will never use the content network again.

Quantam Goose

3:49 pm on Mar 21, 2006 (gmt 0)

5+ Year Member

My CTR has doubled. My ROI has dropped dramatically. That was coupled with a sudden increase in click rate charges for about 30% of keywords. Metrics don't necessarily show fraudulent clicks. I have no clue what is going on, but at this point I am investigating alternative forms of advertising that do not include adwords. [There are not a lot of alternatives]

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