The biggest and most costly mistake that I see advertisers making in AdWords is setting up search network and display network campaigns together.
It’s easy to do it because the default setting in AdWords is “Search Network with Display Select.” So if you’re following Google’s recommendation you are going to make this mistake. The problem with this is search campaigns and display campaigns are a lot different.
First of all, most advertisers shouldn’t the advertising on the display network to begin with, at least not until you’ve really refined your approach and figured out what works and what doesn’t work on the search network. Because of this, bids and costs on the display network are a lot higher than they need to be because there are all kinds of advertisers on there – who shouldn’t be there – driving up the price for everyone who might actually be able to profit.
So stick to the search network when you’re first starting out you’re going to need to change the campaign setting to “Search Network Only” and make sure your campaign is profitable there. Then think about testing in the display network.