Google Ads Spend Is Up, But Leads Are Flat: What To Check First
New ad campaigns are an exciting part of the marketing process, but what happens when you refresh the analytics data only to see that your ad spend is on the rise and your leads are flat? With visitors up and more engagement, it seems like you’re doing everything right, but something is getting lost in the process.
The good news is that it’s not that the Google Ads aren’t working, but more likely a diagnosable problem with your funnel. So, let’s take a look at the big five reasons you’re burning cash on ads without banking leads.
1. Broad Match Keywords
While AI is supposed to be better than ever at understanding context, Broad Match keywords are the default in Google’s settings, and it doesn’t pay for small and medium-sized businesses.
Broad Match keywords might be the thing sapping your budget, and here’s why – bidding on the keywords “plumber” might seem like a smart bid, but with a Broad Match setting, it could show your ad for a range of searches, including:
- How to fix a leaking tap (DIYer)
- Plumbing course near me (student)
- Plumber salary Australia (researcher/job hunter)
You’re paying for all of these clicks, but it isn’t connecting you with people who want to use your service or hire you. You are essentially paying for someone’s curiosity. The best fix for this is using Exact or Phrase Match, forcing Google to show your ads to high-intent users. For example, “emergency plumber near me” or “hire a local plumber.”
Carry out an audit on your Search Terms Report and sort the results by spend to get a look at the actual search terms people type into Google. You can stop the spending bleed by adding specific words to your Negative Keyword list. So, if search terms are irrelevant, you can stem the flow.
Of course, it’s always worth considering that your conversion tracking is broken. Don’t panic-pause a potentially profitable campaign before you do some investigating. There’s a serious problem with traditional tracking, especially when those conversions are made on a mobile phone. Visit the Enhanced Conversions in your settings to ensure your conversions are tracking properly.
2. Performance Max
Performance Max has largely replaced manual campaigns, but you must place strict controls on it. This automated campaign may deliver your ad content across its platforms, but it takes the path of least resistance. You might be looking for new customers, and PMax might retarget people who are already on board or waste your budget by bidding on your brand name. If you’re intent on using PMax, utilise the Brand Exclusion settings to force it into finding new traffic.
You can view the Where Ads Showed report to get a better sense of this and potentially exclude mobile applications that lead to accidental clicks. You want to see your ads on reputable websites and in Google’s search results.
3. Message Misalignment
Your landing page should back up your ad messaging, and if it doesn’t, you’ll lose visitors fast. Attention spans are shorter than ever, so users will bounce if the Message Match lets you down. For example, a bad match would be an ad that boasts a 50% off sale but links to a generic homepage. A good match would be the same sale offer that takes users directly to the sale page with a prominent sale banner at the top.
It’s worth noting that Google has been actively tracking Interaction to Next Paint (INP) since 2024, replacing FID entirely. If you have lag issues with your Contact Us or Book Now buttons, or there are page shifts during loading, you may face a CPC increase as a penalty for poor UX. Utilise Google PageSpeed Insights to test your landing page and contact a developer immediately if your mobile score is below 80.
4. Volume Over Intent
This is perhaps one of the most common mistakes people make because they get caught up with increasing traffic, bidding on high-volume keywords that don’t convert, which creates a disconnect in your sales funnel. “What causes toothache?” might be a high-volume search key, but it’s low conversion, whereas “emergency dentists near me” is a lower volume search key, with a high conversion rate because these are high-intent searches. There’s no need to bid on high-volume search keys that don’t generate leads, especially if your budget is limited. Instead, utilise your marketing budget on transactional high-intent keywords over informational ones.
5. The Market Isn’t Buying Your Offer
This is the toughest reason to take because you might have perfect ads, your targeting and tracking may be exceptional, and yet your leads are still flat. In this case, your offer might be insufficient. Are all of your competitors offering discounts on first purchases? Are they providing potential clients with free consultations? If so, a simple contact us isn’t going to convert to high-value leads.
If you suspect your problem is the offering, revisit your value hook and consider whether your ads communicate what’s in it for the client. Telling people you’re the best auto repair shop in Adelaide doesn’t have the same effect as “free brake inspections when you book an oil change.”
Refine Your Google Ads For Increased Leads
There are plenty of ways your Google Ads spend could be going wrong, and the most common reasons are broad match keywords, Pmax, message misalignment, volume over intent, and a poor offer. To avoid ongoing issues, audit your search terms weekly and add the irrelevant terms to the Negative Keyword list and embrace Exact and Phrase Match keywords that will protect your budget and lead to high-intent users. Be strict with your PMax guidelines to avoid wasting your budget and optimise your landing page for mobile speed.
Remember, the first week or two of a new campaign is the learning phase as the AI tests out different audiences. If your leads are flat 30 days after a new campaign, that’s when you know something is off. Don’t fall into the panic-pause trap; simply reduce the budget until you’ve diagnosed the issue.
