If you are experienced with AdWords then you know that the results are going up and down but it is not always clear why. If it is clear then mostly it is not that you made a ‘mistake’ in AdWords (assuming you are experienced) but it is influenced from ‘outside’ of AdWords.
If you are lucky it was your own influence because you launched an excellent multi-channel promotion campaign that also influenced AdWords. For example you are an Telecom provider and your promotion with free calling to your preferred country generated much more clients then expected for a lower cost per client. You should register the results vs the promotion and used channels so you use it later. It is called learning.
If you are unlucky your competitor lowered its price and promoted this in the right way. Result is that your results are going down. But in case you don’t know why the results are going down.
How can you find the external factors?
If you didn’t make a mistake in AdWords, you didn’t have an excellent promotion and your competition didn’t change its price, product or promotion, you need to find out what can be the external factor.
To make it even more difficult, in many cases there can be more external influences even the combination of your AdWords configuration in relation to one are more external factors may influence your campaign.
If you don’t have extended tools for data analysis you start with trial and error with the external influence(s) you expect. A simple example is that you expect that the conversion of your AdWords is influenced by the weather. If it is very hot your target group likes outside sports so is not sitting behind the computer or doesn’t use their tablets when the weather is excellent for outside sports. You can define when the weather is good for conversion. You look for a database with weather data (for example temperature and precipitation) for last years. In Excell you make a diagram with good weather for conversion and bad weather for conversion in time. Then you do the same for conversion and Cost Per Action (action is conversion . If the peaks of conversion are similar with the peaks of good weather for conversion then you found a external influencers (if you want to do this well then you look also for significance). If the peaks are different, you need to look further.
If you found the external influencer you can increase you bids and budget when the weather is positive for conversion and the opposite when it is negative. Overall, you will get more conversions at a lower Cost Per Conversions. But keep on testing if the external influencer keeps doing what you predict because also external influences may change in time.