Why do market leaders spend more on their AdWords than the competition?

The AdWords budgets of large companies – including the market leaders in your industry – are staggering. While you may spend hundreds or thousands a month, they may spend tens of thousands, hundreds of thousands, or more.

The simple reason why they do this is that AdWords delivers the results they need. In most cases, this is to generate new sales.

Of course, there is much more to it than this.

Going Deeper

AdWords research and analysis shows that big spenders on AdWords generate better results than those who spend less. As a result, you could probably double or triple your current AdWords budget and the big spenders will still do better than you.

Why? The big spenders on AdWords don’t look at the amount they spend as a cost to their business. Instead, they look at it as an investment which they want to make a return on. With so much money at stake, the big spenders do everything in their power to maximise this return.

So long as the return they achieve improves, and they have capacity in their business to deliver for their customers, they will continue to increase the amount of money they spend.

In other words, market leaders spend more on AdWords because it maximises the returns they achieve from their optimised campaigns.

What Can You Learn from This?

The biggest takeaway when looking at the market leaders and big spenders on AdWords is not what they spend, but how they spend it. In other words, how they optimise their campaigns.

The great thing is you can use exactly the same strategies the big players use to optimise your campaigns.

The Caveat

There is one caveat to this, however – your budget must already be at a sufficient level. If you only spend $100 a month on AdWords, for example, you will not have enough information to properly optimise your campaigns.

If you are serious about benefiting from AdWords, the first step is to increase your budget to a more realistic level

From there, you can start optimising your campaign to improve ROI.

Optimisation Tips

Here are five strategies market leaders and big AdWords spenders use to get maximum return from their campaigns.

  • Actively Monitor Campaigns – if you set and forget your AdWords campaigns, you will never be able to compete with the big spenders. To be successful, you must actively monitor, test, improve, and optimise.
  • Track Conversions – you also need to track conversions, i.e. linking a sale directly back to a click on an AdWords ad. Ideally, you should know the keyword, ad, and landing page that led to the sale.
  • Optimise for Conversions – clicks are worthless if they don’t lead to conversions, so everything you do should be aimed at maximising conversions. Remember, if you run ads to generate leads, you also need to track the number of sales you get from those leads.
  • Focus on Landing Pages – the market leaders on AdWords understand the importance of landing pages. Usually, they make them as specific as possible which can mean having separate landing pages per ad, keyword, offer, and more.
  • Use AdWords’ Tools – this includes Ad Extensions, negative keywords, Expanded Text Ads, and more.

In summary, market leaders spend more on AdWords because they know how it works and how to get results. You don’t have to copy what they spend, but you should replicate what they do.