Why Your Agency Won't Tell You About Negative Keywords

A $8,000 Mistake Your Agency Isn't Telling You About

You're running a $5,000/month Google Ads account for your e-commerce store. Your agency bills you at 15% of ad spend—$750/month. In the last quarter, you've been getting clicks from searches like "free shipping codes" and "discount coupons," which rarely convert. Your conversion rate is 2%, but those low-intent searches are dragging it down to 1.8%. Over three months, that's about 40 clicks that cost you $320 in ad spend but generated zero sales.

Your agency hasn't added negative keywords to block those searches.

This isn't conspiracy thinking. It's incentive alignment—the invisible force that shapes how agencies prioritize your account. And it affects almost every business that pays an agency a percentage of spend.

The Math Behind the Misalignment

Let's be clear: most agencies aren't malicious. They're not sitting in a meeting saying, "Let's keep burning their money so we make more." It's subtler than that.

The problem is structural. When an agency earns 10–20% of your ad spend, they have a direct financial incentive to keep your spend high. Every dollar you save through better targeting, tighter keyword lists, or smarter bid management is a dollar their commission shrinks. Conversely, they earn more when your spend grows—even if that growth comes from low-quality clicks.

Negative keywords are the clearest example because they're spend-reduction work. Negative keywords do one thing: block irrelevant searches so you don't pay for wasted clicks. They're not designed to increase spend; they're designed to reduce it. An agency that adds 50 high-quality negative keywords might cut your wasted click rate by 15–20%, which could lower your monthly spend from $5,000 to $4,200. For the agency, that's $120 less per month in commission. Over a year, that's $1,440 they won't earn.

Meanwhile, you save $9,600.

The incentive isn't to do this work. It's to focus on the easier, more visible wins—like increasing bid amounts or expanding keyword lists—because those actions keep spend high.

How to Spot It in Your Account

If you have Google Ads access, you can check whether your agency is serious about negative keywords in about 10 minutes.

Go to your campaign settings and look at the negative keyword lists. Click on a campaign, then "Keywords" → "Negative keywords." Count how many negative keywords you have per campaign. A healthy, mature account typically has:

• Small, focused campaigns (< $1K/month): 20–50 negative keywords
• Mid-size campaigns ($1K–$5K/month): 50–150 negative keywords
• Large campaigns ($5K+/month): 150–300+ negative keywords

If you have fewer than 20 negative keywords in a campaign that's been running for 3+ months, that's a red flag.

Check your search terms report. Go to "Keywords" → "Search terms" and scroll through the actual searches people used to find your ads. Look for patterns of irrelevant clicks. Are you seeing:

• Competitor brand names ("Nike shoes" when you sell running socks)
• Discount/free keywords ("free shipping," "coupon," "discount code")
• Job-related terms ("careers," "hiring," "jobs") when you sell consumer products
• Regional searches you don't serve ("near me," "in [city you're not in]")

If you see 5+ of these in your top 100 search terms, and they don't convert, you have low-hanging negative keyword fruit.

Ask your agency directly. Email them: "Can you walk me through your negative keyword strategy for my account? How do you decide what to add?" A sharp agency will give you a clear answer: they review search terms monthly, add 10–30 negatives per month based on non-converting searches, and monitor brand-new campaigns weekly for waste. A mediocre agency will say something vague like "we monitor for that" or admit they don't have a formal process.

How to Do It Yourself (It's Not Hard)

Negative keywords are one of the few Google Ads optimizations you can do without expertise. Here's the process:

1. Export your search terms report. In Google Ads, go to Keywords → Search Terms. Filter by conversions = 0 and set the date range to the last 30–90 days. Download the report.

1. Identify irrelevant searches. Read through the list and mark searches that will never convert for your business. You don't need perfect judgment here—just common sense. If you sell wedding dresses and someone searches "wedding dress for dogs," that's a negative keyword. If you're a dentist and someone searches "dentist jobs near me," that's a negative.

1. Group them by theme and add them to a negative keyword list. Instead of adding one negative keyword at a time, create a shared negative keyword list in Google Ads (Tools → Shared Library → Negative keyword lists). Name it something like "Brand Negatives" or "Discount Seekers." Add related negative keywords together. For example:

- Discount seekers: "free shipping," "coupon," "discount code," "promo code" - Job searches: "careers," "jobs," "hiring," "apply" - Competitor brands: "[competitor name]," "[competitor name] alternative"

1. Apply the list to all relevant campaigns. Once your list is built, attach it to campaigns where it makes sense. A negative keyword list for "discount seekers" might apply to your whole account; a "competitor" list might apply only to your branded campaigns.

1. Repeat monthly. Spend 15 minutes the first Friday of each month reviewing search terms and adding new negatives. You'll catch patterns faster the second time around.

This work takes 2–3 hours your first month, then 20–30 minutes per month afterward. The payoff is consistent: you'll typically reduce wasted spend by 10–20% without losing any real conversions.

The Real Test of Agency Quality

Here's the thing: agencies aren't bad because they don't do negative keywords. They're bad if they don't do them and don't have a good reason.

A flat-fee agency ($1,500–$3,000/month) or a performance-based agency (who earns a percentage of conversions, not spend) has zero incentive to ignore negative keywords. They actually want you to waste less money, because that means better ROI, which keeps you as a client longer and justifies renewal.

But a percentage-of-spend agency has to actively fight the conflict. The best ones do—they add negatives religiously, they optimize for efficiency, and they accept smaller commissions in exchange for better results. But many don't. They chase spend growth and bury efficiency work.

Negative keywords won't fix a bad campaign. They won't turn a 0.5% conversion rate into 3%. But in a decent campaign, they're the fastest, easiest way to improve ROI and reduce waste. If your agency isn't doing them—or can't explain why—that's not a data point. It's a pattern.