An audit is a process in which a subject-matter expert evaluates deficiencies or areas of improvement in a process, system, organization, or other assets.
In Google Ads, an audit’s purpose is to examine and evaluate the account and determine a course of action to improve its performance, based on its results.
Why You Need an Audit
It will allow you to understand the key areas of your account that need improvement, and the areas that are performing above average.
There’s a common misconception in the industry that audits should only be held when onboarding new clients.
However, it is our opinion that audits should be held on an on-going basis so you can measure how you’ve improved against your initial assessment.
Only then will you be able to tell how effectively you’ve been managing your account.
So how can we audit a Google Ads account?
Before You Begin
If there’s one thing you absolutely must get right before you proceed with this audit, it is conversion tracking.
For an audit to have the intended impact, you need to be objective on what your main goals are.
We’re looking for ways to improve our accounts results and, in turn, make a bigger profit for your business.
For that reason, it is crucial that you make sure all conversions are being measured correctly before you proceed with this audit.
Some of the steps in this audit absolutely require that conversion tracking is properly implemented – so if you’re unsure of your account’s tracking, go back and fix it before you read on.
If your conversions are being correctly tracked, though, let’s get to it!
1. Lin-Rodnitzky Ratio
What if there was a metric that could benchmark the overall health of your account and all it took were a few calculations and less than a minute of your time?
The Lin-Rodnitzky Ratio (L-R Ratio) can do exactly that.
Named after the founders of 3Q Digital – Will Lin and David Rodnitzky -, it allows you to easily measure the efficiency of your account.
So how does it work?
The ratio divides the overall cost per acquisition (CPA) of all non-brand queries by the CPA of non-brand queries with at least one conversion during the measurement period.
Lin-Rodnitzky Ratio = CPA of all non-brand search queries
The result will then provide some context as to how much money is being spent on non-converting search terms in your account. In other words, if you have a high ratio, you’re spending a lot of money on terms that don’t convert.
According to its creators, healthy accounts fall within the 1.5-2.0 ratio. Here’s a breakdown of what the results mean.
1.0-1.5: The account is too conservative. This often means that most conversions are being driven by branded terms and the account is missing out on some potential incremental conversions.
1.5-2.0: The account is well-managed. There is a healthy mix of converting queries and experimental queries that are being tested to identify new opportunities.
2.0-2.5: The account is too aggressive. There are queries that do not drive conversions and have likely resulted in wasted ad spend.
2.5+: The account is being mismanaged: There’s a lot of wasted budget daily and there are a lot of non-converting search terms that can easily be excluded to save the account a lot of money.
How to Calculate the L-R Ratio
Once you’ve made sure your conversion tracking has no identified issues, here’s how you can start calculating your L-R ratio.
- Select a date range of at least 2-3 months. This will allow you to get enough data for the results to be significant.
- Head over to your search terms report under “Keywords > Search Terms” and add a filter that excludes all your branded terms.
- Write down your overall search campaigns CPA.
- Add another filter to include only search terms with at least one conversion and write down the average CPA.
- Take the overall CPA calculated in step 4 and divide it by the CPA calculated in step 5.
L-R Ratio = 475.31€/ 22.59€ = 21.04
In this case, the account’s ratio sits at 21 – meaning that the account is severely leaking a lot of budget on unwanted search terms.
So, how do we find the leaks?
How to Improve The L-R Ratio
To improve the L-R Ratio you need to find where the leaks are located and plug them.
To do this, we will resort to an Excel spreadsheet.
Download all your search terms (remove filters from the previous step) from the search queries report, making sure you include the following columns:
- Search Terms
Add Negative Keywords
Once in the Excel spreadsheet, filter the Conversions column to only include terms with zero conversions. Then, order the Cost column from highest to smallest.
The first results should easily show search terms with higher spends and no conversions. In this case, the keywords in rows 1-10 accounted for 12% of the account’s entire spend – with no conversions!
Immediately pause those keywords or add them as exact match negative keywords.
In some cases, you might also want to consider developing a new landing page for those terms as you could still “salvage” some conversions.
Note: if this term applies for the entire account, it might make sense to add it to a negative keyword list and apply it to all campaigns.
Focus on Long-Tail Keywords
In the same Excel spreadsheet, create a Pivot Table where you’ll include campaigns and keywords as your line items, and search terms as your values.
Note: make sure your Search Terms are set up as ‘Count of Search terms’ as in in the image above.
Then, right-click the header of the search terms column and order from highest to smallest.
With this simple table you will now be able to see which keywords are generating the most search terms within your account – and this is also where you will usually find a lot of wasted ad spend.
For example, in this case, after digging through the search terms report, we quickly identified search terms that could be added as keywords into a new ad group.
Given that this client does indeed offer 24h services, having a separate ad group with tailored ads and landing pages that mention specifically that they provide 24h services will help increase quality scores, click-through rates and, consequently, reduce costs considerably.
2. Account Quality Score
Quality score is one of the most debated metrics in the PPC industry – and with reason for it.
According to Google, quality score is an indicator of the quality of your ads, landing pages, and keywords. In other words, it represents how your ads are perceived by your target audience.
The key concept here is that ads that are highly relevant to searchers intent are given higher quality scores. In turn, the higher your score, the less you pay for each click.
For this reason, the second step in this account audit is to assess your account’s quality score and discover areas for improvement.
In other words, areas where we can increase our quality score and reduce scores.
If you want to learn more about quality scores, I highly recommend you read Brad Geddes’ ‘Advanced Google AdWords’. Even though it’s already a few years old, it still has a lot of valuable content.
Measuring Your Quality Score
Quality scores are presented in numerical values from 1 to 10.
You can visualize this metric at the keyword level in your account by customizing your columns and adding the ‘Quality Score’ metric.
Once you add this column into your report you will be able to see the quality score for each keyword in your account and make decisions on how to improve them.
- Should you pause that keyword?
- Build a new landing page?
- Create new ads?
However, if you were to do this for each keyword in your account it would quickly become an extremely time-consuming task. For that reason, we’ll resort to an Excel spreadsheet again.
Before you export the data into Excel, make sure you include the following columns in your report:
- Ad Group
- Quality Score
Once you export the data, delete the two rows on top of your column titles. Then, scroll all the way to the bottom of your spreadsheet and delete the ‘total’ rows.
You will then create a Pivot Table with Quality Score as a row label and ‘Count of Keywords’ and ‘Sum of Impressions’ as values, as in the image below.
By doing so, you will now be able to see how many keywords are in your account for each value in the quality score scale.
To make it even easier to visualize the data, you can add a column to the right of your table and divide the impressions in each row for the total of impressions.
In the case above, we can see the account could do with some significant improvements, as almost 50% of impressions have a quality score under 5.
Note: ideally, you want at least +70% of your account’s impressions with a quality score over 7.
Note 2: If you’re bidding on competitor terms, expect that your quality scores will be lower. In that case, it’s ok if you exclude them from this analysis.
Now that you’ve found the key areas in your account that need to be improved, it’s a question of figuring out how to improve them.
You know now there is room for improvement.
But where exactly are those keywords?
Using the same Excel spreadsheet, it is very easy to find them. To do so, you will need to add an additional calculated column to your data source.
Head over to your data source and include an additional column where you multiply impressions by the quality score (impressions * quality score).
Name this column WQS – which stands for ‘Weighted Quality Score’.
Then, update your pivot table’s data source so that it includes this new column.
You should now see WQS as a field in your pivot table.
You will then add your campaigns and keywords as rows and include the cost as a value.
Finally, create an additional calculated field named Normalized Quality Score (NQS) that divides the WQS you created in the previous step, by the total amount of impressions.
You can now see a normalized quality score indicator for each campaign and keyword in your account.
Note: When using Pivot Tables, Excel will average out quality scores between all keywords, which doesn’t take into consideration how many impressions each keyword has. That is why we’re using a normalized Quality Score.
If you then sort the results from top to lowest in spend, you should be able to see keywords with high spends and low quality scores and make decisions on how to improve them.
Could a new landing page improve quality scores?
Or should you just pause those keywords?
Up to you!
3. Impression Share Report
Have you ever heard about the Pareto Principle?
If not, it states that for many events, roughly 80% of the effects come from 20% of the causes.
In a lot of the accounts I’ve audited over the years, I often found out that around 80% of the results were being generated from 20% of the keywords.
With this principle in mind, it means that if you’re able to increase spend in those 20% of top-performing keywords, you should be able to easily improve performance in your account.
For this we will resort to the impression share report.
How Can We Leverage The Impression Share Report
In Google Ads, Impression share (IS) is the percentage of impressions that your ads receive compared to the total number of impressions that your ads could get.
The total amount of impressions your ad is eligible to receive depends on your bids, and your budget. In other words, if you’re getting a 50% impression share, it means you could be receiving 50% more impressions from that keyword.
In the case of keywords with higher than average quality scores and conversion rates, this means that if you’re able to get more impressions for those terms, theoretically, you should be able to get more conversions and increase your account’s quality score.
Note: even though quality score is an important metric to take into consideration, it should not be regarded as an absolute metric. It is best to have a low-quality score keyword that converts with 100% impression share than a keyword with a high quality score that doesn’t convert.
So how can you discover these keywords?
You’ve guessed it… Excel!
Identifying The Low-Hanging Fruit
To identify these opportunities, we will once again export all our keywords into an Excel spreadsheet.
Make sure you include the following columns.
- Max CPC
- Conversion Rate
- Quality Score
- Impression Share %
- Impression Share Lost (rank)
- Impression Share Lost (budget)
Once your data is in the spreadsheet, you will then:
- Order impression share from smallest to largest.
- Add a filter to exclude keywords with 0 conversions.
- Add a filter to exclude keywords with quality scores lower than your account’s average.
You can now see a list of keywords that could be spending more budget and getting you more conversions if you were bidding higher.
Notice how the first keyword has 24 conversions and almost 80% of search impression share lost due to low rank.
Increase those bids!
Considering these are keywords with above than average quality scores, small increases in your bids could significantly help improve results.
4. Account Structure
So far, in this audit, you have uncovered:
- Campaigns with low quality scores.
- Keywords that are bringing in low-quality search terms.
- Keywords with ineffective bids.
In this fourth step of the audit, taking into consideration the results from the previous steps, you will evaluate the account’s structure and understand if it could be improved in order to lower your costs and increase conversions.
What’s The Best Google Ads Account Structure?
Unfortunately, there’s not a definitive answer to that question.
I won’t dive too deep into this topic as it deserves an entire post on its own. However, there are some questions you should ask yourself when assessing your account’s structure.
- Do your campaigns reflect the product categories you’re selling?
- Do you have brand and non-brand specific campaigns?
- Are there any ad groups with more than 10 keywords?
- Are there any keywords with lots of search queries?
If you’ve followed the audit so far, you should be able to answer some of these questions very easily.
For example, when you measured your L-R ratio, you found out which keywords were generating the most search terms.
In a lot of cases, you can find new keywords from these search terms that could be added as keywords in separate ad groups.
When you measured the normalized Quality Score, you built a list of keywords per ad group, with a corresponding quality score.
Is there any opportunity to move a low quality score keyword to a separate ad group with ads dedicated to those search terms?
Google Ads Editor: Custom Rules
In the final step of this audit, we will take advantage of a little-known feature in the Google Ads Editor tool.
You can find this feature in the left navigation pane under your shared library, and it’s called ‘Custom Rules’.
What are these Custom Rules?
In short, these rules will let you quickly see what’s missing in your account:
- Campaigns with fewer than 4 sitelink extensions
- Campaigns with fewer than 3-5 ads
- Ad Groups with no keywords
- Ad Groups with no ads (!)
- And much more
To use this feature, you simply head over to the custom rules tab, right-click any of the violations, and select ‘Show Violations’.
The best part is that you can edit, or even create your own custom rules to better suit your needs.
You can repeat this process for each violation and discover underlying issues within your account.
In some cases, this can be a very lengthy process, but it will surely help uncover hidden opportunities – especially in bigger accounts.
There are, without a doubt, plenty of other ways to audit your Google Ads account.
However, with the points covered in this post, you should be able to access some quick insights that will add a lot of value to your account.
If you’re new to Google Ads, we absolutely recommend reading Brad Geddes’ Advanced Google AdWords book – there are some golden nuggets in there as to how you should audit your account.
Don’t be hesitate because the book’s a bit old – it’s still very valuable to any Google Ads manager out there.
Did you have any trouble with the audit? Do you have anything you would like to add?
Please drop a comment below and let’s talk!