Millions of small businesses leverage paid search advertising as an important source for leads and sales; the most popular paid search platform is Google AdWords. Yet most of these businesses aren't doing the work required to succeed, according to new research (and a cool infographic) that analyzes the performance of 500 small business Google AdWords accounts conducted by the search marketing company WordStream.

According to WordStream, the average small business spends $1,200 a month on AdWords. Unfortunately those advertisers waste an average of 25 percent of their budget, primarily because they fail in a few key areas. Some throw money at irrelevant keywords or are penalized for low ad click-through rates, while others ignore mobile traffic or direct visitors to under-optimized landing pages.

There are a number of reasons PPC marketing can under-perform, but poor results can usually be blamed on five common bad habits. "We've identified a number of things that overachievers in small business PPC do regularly and really well," says WordStream founder (and fellow Inc.com columnist) Larry Kim. "These 5 habits of successful AdWords PPC marketers help them avoid wasting advertising dollars by spending less on worthless clicks and capitalizing on opportunities their competitors miss."

Want to get more return from your AdWords spending? According to Larry, here are six key ways:

1. Be Active

Get in the game: if you're not actually logging into AdWords on a regular basis and making changes to your campaigns your results will naturally suffer. Still, only 1 percent of small business advertisers tweaked their AdWords accounts at least once a week in the last quarter.

Amazingly, over half (53 percent) optimize their ad campaigns only once per quarter. PPC marketing is highly measurable and by not reviewing and acting on campaign data you miss out on making data-driven changes that can make this marketing channel so effective.

Start by spending at least a few minutes each week reviewing and tweaking your campaigns.

2. Be Specific

Long-tail keywords typically have less competition and therefore cost less per click. However, one in four small business advertisers rely exclusively on very broad keywords like "insurance." Making matters worse, one in five don't use a single negative keyword, an important tool that prevents your ads from showing up on irrelevant searches.

"Advertisers need to do their research to find those specific keywords that can help reduce cost while tapping into more targeted markets, yet we're not seeing small businesses achieve this in great numbers," says Kim. "And without also using negative keywords you're going to waste a lot of your budget on clicks that don't convert."

3. Be Relevant

Quality Score (QS) is Google's grade of the relevancy of your ad campaigns, largely based on the click-through rates of your keywords and ads. (When a higher percentage of people that see your ads click through to your site it's an indication that your message is resonating with your audience.) Quality Score has a major impact on PPC campaign performance--marketers who nail relevance and achieve top Quality Scores see savings of up to 50 percent on cost per click plus an 80 percent lower cost per conversion when compared to an average QS of 5.

Targeting the right keywords and writing unique ads worth clicking on are the keys to improving your Quality Score.

4. Be Creative

Why pay for an ad click to send traffic to a page that is not optimized for conversion? Oddly enough, 25 percent of small business advertisers send all of their campaign traffic to a single page, while 20 percent send their clicks straight to the homepage. There's no way a single page can address the needs of all the different visitors you will bring in with Google ads.

Not only do many small businesses fall short on conversion optimization, less than 50 percent have conversion tracking installed. "You can't have an accurate picture of your campaigns and whether or not they're effective if you're not tracking conversions," Kim says.

"Marketers need to get creative and make sure their landing page iterations are designed to answer the needs of ad traffic. Then they absolutely need to measure the performance of those pages to continuously make improvements."

5. Be Mobile-Friendly

Follow mobile PPC best practices: ad extensions, in particular, are an underutilized opportunity that only extraordinary small business advertisers appear to be tapping into. The click-to-call extension can increase click-through-rates by 10 percent, yet only one in 20 advertisers have that feature set up on all campaigns.

Mobile-preferred ads take precedence over regular ad creative in campaigns where a mobile impression is an option because it allows advertisers to serve up highly targeted content that addresses the needs of their viewers on mobile devices.

For example, mobile users are much more likely to convert by calling your business with a question or request than a desktop user. However, less than 20 percent of small business advertisers are using mobile-preferred ads.

6. Start Small... and Don't Stop



The effort required to optimize AdWords campaigns on an ongoing basis doesn't have to be intimidating, says Kim. "It's really just a matter of practicing these good habits regularly, which could take as little as a few minutes a week," he says.