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The Google AdWords Tax Calculator is a new tool from PPC Blog that helps you answer the question “how much of your AdWords ad spend is wasted?” Of course, Google doesn’t actually tax those who use their AdWords program, but the tool’s intention is to show you some of the ways that default settings in the AdWords program can act as a “tax” on your campaigns, reducing your profits by weakening the impact of your campaign.
The Tax Calculator is a simple tool that asks you to input the average monthly spend on AdWords, the number of keywords, number of ad groups, and number of negative keywords in your account. The remaining questions are yes/no or multiple choice, and deal with your settings to the defaults within AdWords. It is designed to analyze basic settings of your campaign in relationship to the size and complexity of your campaign. In general, the larger and more complex your setup, the more you need to emphasize certain aspects of the program; smaller accounts need to concentrate on other factors. Some of the parameters cover commonly held misconceptions, such as whether or not one always bids to position #1, even during bidding wars.
Once you’ve chosen the appropriate options, the tool returns an estimation of what percentage of your AdWords spend is being “taxed” by Google through settings that may be working to your disadvantage, based on how you answered the questions. The percentage is broken down by however many parameters you are likely incorrectly using, to indicate where you can change settings to improve your returns. You can experiment with changing certain settings and see how this affects the percentage level of the “tax” in order to discover ways you may be able to make your campaigns more profitable.
The tool is aimed at advertisers who are new to AdWords and running standard profit-seeking campaigns. Those with established campaigns and/or seeking other goals, such as branding, from AdWords will find that the tool doesn’t address those goals and concerns. As a fairly simple setup, the Google AdWords Tax Calculator is not a solution to your AdWords campaign woes, but it will help show you areas you can experiment with to improve your profit margins.
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