June 19, 2024

How To Reduce Wasted Ad Budget – The Hidden Cost of Close Variants

How To Reduce Wasted Ad Budget - The Hidden Cost of Close Variants


Managing paid media effectively is essential for improving ad performance. Our study across millions of clicks reveals the true cost of leaving close variants unsupervised. In this article, sponsored by Adpulse, we break down the impact and offer strategies to tame them.

Understanding the Challenge

The Question at Hand

The driving question for all paid media managers is, “How do I improve paid ad performance?” Our study shows that close variant search terms, which often perform poorly, consume more than half of the average budget on Google and Microsoft Ads. Effectively managing their impact could significantly improve ROI.

Google's Promise and Reality

Google claims that “close variants help you connect with people who are looking for your business, despite slight variations in the way they search.” While this idea is promising, the execution reveals substantial drawbacks.

Analyzing the Impact of Close Variants

Defining True Matches and Close Variants

  • True Match: Exact, phrase, and broad match keywords that directly align with the search terms.
  • Close Variant: Search terms that are fuzzily matched to your keywords. These can be relevant but often result in expensive or wasteful conversions.

Performance Comparison

Our analysis of over 4.5 million clicks and 400,000 conversions shows that close variants perform poorly compared to true matches on both Google and Microsoft Ads. Google Ads showed the worst performance in terms of CPA (Cost Per Acquisition) and ROAS (Return on Ad Spend).

Strategies to Manage Close Variants

How To Reduce Wasted Ad Budget - The Hidden Cost of Close Variants

Step 1: Diagnose the Problem

To help diagnose the health of your close variants, use tools like Adpulse’s in-app solution or a simple spreadsheet to analyze your keyword and search term data. Identify and clean up the wayward close variants.

Step 2: Campaign Structures for Better Management

  • Brand Campaigns: Separate ad groups for exact and phrase match keywords. Use negative keywords to filter out irrelevant close variants.
  • Non-Brand Campaigns (Larger Budgets): Create ad groups based on match types (e.g., Exact, Phrase, Broad) for easier identification and elimination of unwanted close variants.
  • Non-Brand Campaigns (Smaller Budgets): Use theme-based ad groups to gather more data per ad group and simplify the management process.

Step 3: Ongoing Maintenance

Regularly add great close variants as keywords and poor ones as negatives. For exact match ad groups, use root negative keywords cautiously. For phrase or broad match ad groups, prefer adding the whole search term as an exact match negative.

The Proof: Our Analysis


Our study included data from thousands of Google and Microsoft Ads accounts over 30 days, excluding:

  • Shopping or DSA campaigns/ad groups
  • Accounts with less than 10 conversions
  • Accounts with conversion rates above 50%
  • For ROAS comparisons, accounts with ROAS below 200% or above 2500%

Key Findings

  • CPA Results: Google Ads maintained conversion rates but at nearly double the CPC of true matches, resulting in CPAs roughly double those of true matches. Microsoft Ads had slightly poorer CPA performance due to lower conversion rates but benefited from significantly lower CPCs.
  • ROAS Results: Both platforms showed that close variants delivered roughly half the ROAS of true matches, with Microsoft Ads performing slightly better overall.


Close variant search terms consume a significant portion of advertiser budgets while generally performing worse than true matches. Effectively managing their impact is crucial for improving ROI. By diagnosing issues, restructuring campaigns, and maintaining ongoing actions, you can optimize your paid media performance and achieve better results.