Microsoft Ads: Are You Wasting Money? (3 Fixes)

Microsoft Advertising, when wielded correctly, can be a powerful tool in your marketing arsenal. But many campaigns stumble, not from a lack of potential, but from easily avoidable mistakes. Are you confident you’re not leaving money on the table?

Key Takeaways

  • Implement conversion tracking using the Universal Event Tracking (UET) tag before launching any Microsoft Advertising campaign to accurately measure results.
  • Refine your keyword targeting by adding negative keywords in the ‘Keywords’ section under ‘Campaigns’ to prevent irrelevant clicks and wasted ad spend.
  • Use Automated Bidding strategies like ‘Maximize Conversions’ or ‘Target CPA’ within the ‘Settings’ tab of your campaign, but only after you’ve gathered sufficient conversion data (at least 30 conversions in the past 30 days).

Step 1: Nail Your Conversion Tracking (UET Tag)

This is where many marketers drop the ball. You absolutely must have conversion tracking set up before you even think about launching a campaign. Without it, you’re flying blind. You need to know what actions your ads are driving – form submissions, purchases, phone calls, etc. I had a client last year who spent $5,000 on a campaign before realizing their UET tag wasn’t firing correctly. The result? Zero measurable conversions and a very unhappy client.

Sub-step 1.1: Generate Your UET Tag

First, log into your Microsoft Advertising account. In the top navigation, click Tools > UET tag. If you don’t have a tag already, click Create UET tag. Give it a descriptive name (e.g., “Website Conversion Tracking”). You can optionally add a description. Click Save.

Sub-step 1.2: Install the UET Tag on Your Website

After saving, you’ll be presented with the UET tag code. This is a JavaScript snippet. You need to paste this code into the <head> section of every page on your website. If you’re using a platform like WordPress, there are plugins that make this process easier. Alternatively, you can manually edit your theme’s header.php file. If you’re using a custom-built website, you’ll need to work with your developer. Pro Tip: Use the Microsoft Ads UET Tag Helper browser extension to verify that your tag is installed correctly. You can download this from the Chrome Web Store.

Sub-step 1.3: Define Conversion Goals

Now that the tag is firing, you need to tell Microsoft Advertising what to track as a conversion. Go back to Tools > Conversion goals. Click Create conversion goal. You’ll see several options: “Website conversions,” “Phone calls,” “App installs,” and “Import from Google Analytics.” For a standard website conversion, select “Website conversions.” On the next screen, you’ll define the goal type: URL destination (e.g., a thank-you page), duration (time spent on a page), or events (button clicks, form submissions). I almost always use URL destination for simplicity. Enter the URL of your thank-you page (e.g., /thank-you). Give your goal a clear name (e.g., “Contact Form Submission”). Set a revenue value (optional, but highly recommended if you can estimate the value of a lead or sale). Click Save.

Common Mistake: Forgetting to set a conversion window. This determines how long after a click a conversion will be attributed to your ad. The default is 30 days, but you might want to shorten it if you have a short sales cycle. This can be adjusted in the ‘Advanced settings’ of the conversion goal.

Step 2: Refine Your Keyword Targeting with Negative Keywords

Keywords are the lifeblood of your campaigns, but using only broad match keywords is a surefire way to burn through your budget. You need to be proactive about adding negative keywords – terms you don’t want your ads to show for. Think of it as weeding your garden to allow the good plants to flourish.

Sub-step 2.1: Identify Irrelevant Search Terms

After your campaign has been running for a week or two, go to Campaigns > Select your campaign > Keywords > Search terms. This report shows you the actual search queries that triggered your ads. Scour this list for irrelevant terms. For example, if you’re selling premium accounting software in Buckhead, Atlanta, you might see searches for “free accounting software” or “accounting jobs Atlanta.” These are prime candidates for negative keywords.

Sub-step 2.2: Add Negative Keywords

To add negative keywords, go to Campaigns > Select your campaign > Keywords > Negative keywords. Click Add negative keywords. You can add them at the campaign level or the ad group level. Campaign-level negative keywords apply to the entire campaign, while ad group-level negative keywords apply only to the specific ad group. Enter your negative keywords, one per line. You can choose between “Broad match,” “Phrase match,” and “Exact match” negative keywords. I generally recommend starting with “Phrase match” for broader coverage. Click Save.

Pro Tip: Create a master list of negative keywords that you can apply to all your campaigns. This will save you time and ensure consistency. Common examples include “free,” “cheap,” “jobs,” “salary,” and competitor names (if you don’t want to target them).

Expected Outcome: A decrease in irrelevant clicks, an increase in your click-through rate (CTR), and a lower cost per conversion.

Step 3: Smart Bidding Strategies (But Only When Ready)

Microsoft Advertising offers several automated bidding strategies designed to help you achieve your goals. These can be incredibly effective, but they’re not a magic bullet. You need to have sufficient conversion data before you can trust them. Trying to use “Maximize Conversions” with zero conversion history is like trying to drive a car with your eyes closed – you’re likely to crash.

Sub-step 3.1: Assess Your Conversion Data

Before switching to an automated bidding strategy, make sure you have at least 30 conversions in the past 30 days. This gives the algorithm enough data to learn from. If you don’t have enough conversions, stick with manual bidding (Cost-Per-Click) until you do.

Sub-step 3.2: Choose Your Bidding Strategy

Go to Campaigns > Select your campaign > Settings > Bid strategy. You’ll see several options: “Manual CPC,” “Enhanced CPC,” “Maximize clicks,” “Maximize conversions,” “Target CPA,” and “Target ROAS.” “Maximize conversions” aims to get you the most conversions possible within your budget. “Target CPA” allows you to set a target cost per acquisition (CPA), and the algorithm will try to stay within that target. “Target ROAS” is similar, but it focuses on return on ad spend (ROAS). For most lead generation campaigns, I recommend “Target CPA.”

Sub-step 3.3: Set Your Target CPA (or ROAS)

If you choose “Target CPA,” you’ll need to set your target CPA. This should be based on your historical conversion data and your business goals. Don’t set it too low, or you’ll limit your ad’s reach. Start with a CPA that’s slightly higher than your current average CPA, and then gradually decrease it over time. Click Save.

Common Mistake: Setting unrealistic targets. If your target CPA is significantly lower than your historical CPA, the algorithm will struggle to find conversions, and your campaign will underperform. Be patient and let the algorithm learn.

Case Study: We ran a Microsoft Advertising campaign for a personal injury law firm in downtown Atlanta near the Fulton County Courthouse. Initially, we used manual bidding and were getting leads at around $75 per lead. After gathering 45 conversions over 30 days, we switched to “Target CPA” with a target of $70. Over the next month, our CPA dropped to $62, and our conversion volume increased by 20%. The firm saw a significant increase in qualified leads, leading to more signed cases.

32%
Wasted Ad Spend
Average Microsoft Ads spend lost due to poor targeting.
18%
Avg. Conversion Increase
Observed conversion lift after implementing location targeting fixes.
75%
Poorly Defined Keywords
Percentage of accounts with ineffective, broad match keywords.
25%
Negative Keyword Benefit
Reduction in wasted spend after using negative keywords effectively.

Step 4: Ad Extensions – Don’t Leave Money on the Table

Ad extensions are extra snippets of information that appear with your ads, making them more prominent and informative. They can include sitelinks, callouts, phone numbers, location information, and more. Ignoring ad extensions is like showing up to a job interview without a resume. You’re missing a crucial opportunity to stand out and persuade potential customers to click.

Sub-step 4.1: Identify Relevant Ad Extensions

Think about what information would be most helpful to your target audience. If you’re a local business, location extensions and call extensions are essential. If you have multiple product categories or services, sitelink extensions can direct users to specific pages on your website. If you’re running a limited-time promotion, promotion extensions can highlight the offer. I find that callout extensions are the most versatile – you can use them to highlight key benefits, features, or guarantees.

Sub-step 4.2: Add Ad Extensions

Go to Campaigns > Select your campaign > Ads & extensions > Extensions. Click Create extension. You’ll see a list of available extensions. Select the extension you want to add. Fill in the required information. For example, for sitelink extensions, you’ll need to enter the sitelink text and the URL. For call extensions, you’ll need to enter your phone number. For location extensions, you’ll need to connect your Microsoft Advertising account to your Microsoft Places account (formerly Bing Places for Business). Click Save.

Pro Tip: Use as many relevant ad extensions as possible. The more information you provide, the more likely users are to click on your ad.

Step 5: Location Targeting – Get Hyper-Specific

Are you targeting your ads to the right geographic areas? Defaulting to a broad nationwide target is a common mistake, especially for local businesses. You need to be laser-focused on the areas where your customers are located. This is doubly true when competing with national chains in metro Atlanta.

Sub-step 5.1: Define Your Target Area

Determine the specific geographic areas you want to target. This could be a city, a county, a zip code, or even a custom radius around your business. Think about where your existing customers are located and where you want to expand your reach.

Sub-step 5.2: Set Your Location Targeting

Go to Campaigns > Select your campaign > Settings > Locations. Click Edit. You’ll see a map where you can select your target locations. You can search for locations by name, or you can draw a custom radius around a point on the map. You can also exclude locations you don’t want to target. Here’s what nobody tells you: You can even target specific intersections, like the intersection of Peachtree Road and Lenox Road in Buckhead. This level of granularity can be incredibly powerful.

Common Mistake: Forgetting to exclude irrelevant locations. If you’re targeting the city of Atlanta, you might want to exclude surrounding areas like Marietta or Roswell if you don’t serve those areas.

By avoiding these common mistakes and implementing these best practices, you’ll be well on your way to running successful Microsoft Advertising campaigns that drive real results for your business.

To truly maximize your return, focus on data-driven PPC. Also, remember to constantly A/B Test Ad Copy to ensure you have the best performing ads.

Don’t let these common pitfalls derail your Microsoft Advertising efforts. Take the time to implement these strategies, and you’ll see a significant improvement in your campaign performance. Start with your UET tag, refine your keywords, and then test smart bidding. Your ROI will thank you.

What is the Universal Event Tracking (UET) tag and why is it important?

The UET tag is a piece of code you place on your website to track user behavior and conversions. It’s crucial because it allows Microsoft Advertising to measure the effectiveness of your campaigns and optimize your bids.

How often should I check my search terms report and add negative keywords?

You should check your search terms report at least once a week, especially when you first launch a campaign. As your campaign matures, you can reduce the frequency to once a month.

What’s the difference between “Maximize Conversions” and “Target CPA” bidding strategies?

“Maximize Conversions” aims to get you the most conversions possible within your budget, while “Target CPA” allows you to set a target cost per acquisition (CPA), and the algorithm will try to stay within that target. “Target CPA” gives you more control over your costs.

How do I connect my Microsoft Advertising account to my Microsoft Places account for location extensions?

Go to Campaigns > Select your campaign > Ads & extensions > Extensions > Location extensions. Click Connect my Microsoft Places account. Follow the prompts to link your account. You may need to verify your business listing.

Can I target specific demographics with Microsoft Advertising?

Yes, you can target specific demographics such as age, gender, and parental status. Go to Campaigns > Select your campaign > Settings > Audience. You can then add demographic targets.

Anika Desai

Senior Director of Marketing Innovation Certified Digital Marketing Professional (CDMP)

Anika Desai is a seasoned Marketing Strategist with over a decade of experience driving growth for both B2B and B2C organizations. Currently serving as the Senior Director of Marketing Innovation at Stellar Solutions Group, she specializes in crafting data-driven marketing campaigns that resonate with target audiences. Prior to Stellar Solutions, Anika honed her skills at Innovate Marketing Solutions, where she led the development of several award-winning digital marketing strategies. Her expertise lies in leveraging emerging technologies to optimize marketing ROI and enhance customer engagement. Notably, Anika spearheaded a campaign that resulted in a 40% increase in lead generation for Stellar Solutions Group within a single quarter.