Google AdWords, when set up right, can be extremely effective, giving a business the opportunity to put their products or services in front of people actively searching for them. Done wrong, you can end up going broke.

Let me explain.

Perry Marshall, probably the most well known and certainly one of the best AdWords consultants out there coined the term “stupidity tax” to describe people who needlessly throw away TONS of money on AdWords; simply because they jump in with no knowledge on how to set up a campaign.

For instance, take a look at the search result to the left, for a dentist in my hometown of Jacksonville, Florida. Notice the ad, for a dentist in Bend, Oregon. Bend is 2839 miles from my house. It’s doubtful (in fact I’ll go out on a limb here and say darn near impossible) that I’m going to travel that distance to get a dental appointment.

Here’s where the Stupidity Tax comes in, because Google will gladly take your money. They care not that you don’t know how to set up geographic targeting in your AdWords campaigns. And anytime someone clicks on that ad, regardless if it’s a mistake on their part or not, Google is going to charge the advertiser for that click.

And dental keywords are not cheap.

Unfortunately this is not an isolated incident. We’ve seen dozens of examples of not only geo targeting mistakes, but broad keyword mistakes. Take for instance when doing some research for a client setting up a campaign for “tax deed sales”. We saw at least a half dozen attorneys specializing in IRS tax representation bidding on that keyword. Why? Because they had set up bids for the broad keyword “tax”, and Google gladly served their ad…even though it had NOTHING to do with tax deeds.

“Ka Ching” for Google. “What the heck!” for the business when they get the bill.

AdWords is increasingly more expensive and complicated to navigate for a business. While it is still a great vehicle, it can also prove to be disastorous to businesses that unwillingly step into a situation they don’t understand.

That’s why it is increasingly smart to let someone at least set up your campaigns the right way to target your right audience. In the long it can return many times over your investment.