How To Manage Campaign Budget In Paid Search
Budgeting is by far the most important part of any paid marketing activity. When you first start with AdWords advertising, you’re going to have to decide how to manage your advertising budget. In this article, we want to look at some of the ways that you can manage campaign budget in paid search. Follow me as we look at this together in this article.
AdWords offers many different ways to spend your budget, considerations include:
- Daily Spend: AdWords allows you to control exactly how much you want each campaign to spend each day so you’ll never spend more than you have budgeted for over the month. Once you reach your daily spend, your ads will stop serving. However, budgets can go over by up to 20% more than daily spend on a given day if there is a lot of click traffic, but this will equalize over the course of a month.
- Maximum Cost Per Click (Max CPC): the maximum price you are willing to pay for a click – this is set at ad group or keyword level. The sum of your clicks x by CPC is how much you spend.
- Times of the day and days of the week ad scheduling: allows you to control when your ad is shown. After you identify the key times for your consumers to take action that is valuable to you, you can set a schedule so your ad only appears at high impact times. This allows you to make sure your budget is spent when it has the biggest impact on your KPIs.
- Each campaign has a daily spend. By structuring your account correctly, you can manage your daily spend which ultimately translates into your weekly/monthly spend
- Putting keywords and ad groups with similar search volumes into one campaign means that you can set higher budgets for high volume keywords and lower budgets for low volume keywords
- If you put low volume keywords in the same campaign as high volume keywords, the high volume will spend all of the budget which means that long-tail keywords, which might be high value, might not get served to searchers
- Remember, campaigns contain the ad groups which contain the keywords so the campaign will have a spend that covers all of the keywords in that campaign
- Use a budget tracker to keep spendings under control
- This is a document to measure how much you have spent against your monthly/weekly/daily budget
- By tracking how much you’ve spent so far vs. the total budget, you can see if you are spending too much or too little to ensure your spend is on track
Forecast and use metrics to measure business goals to see how much to spend:
- You can estimate how much a campaign will spend by looking at impressions and CTR to estimate number of clicks. If you multiply your estimated clicks by your CPC, you will be able to forecast a cost.
- Use daily budgets on a campaign level and ad delivery options to help achieve business goals, set bids to drive traffic and spend the budget.
- CPCs are set at keyword level (i.e. specific bids for individual keywords) or at ad group level (i.e. using the same bid for all keywords in an ad group).
- You can also use metrics like conversion rate to determine the number of clicks you need to drive a conversion. Then using CPC, you can estimate the cost of those clicks and overall budget required. This can forecast an estimated ROI.
- Google Ads works off a bid auction – the mix of all advertisers competing for positions on the SERP for a certain keyword.
- All advertisers who want a click will come together automatically in their system and their position on the page will be determined by their ad rank.
Ad Rank and quality score are two internal AdWords metrics that will affect final cost per click.
Quality Score is the metric Google assigns to your keyword based on its CTR, bid and landing page relevance. CTR is the most important factor followed by bid, then landing page. Having a high-Quality Score means that AdWords thinks your ad, keyword and landing page are all relevant and useful to someone searching on Google.
It will allow you to serve in higher positions than advertisers with a lower Quality Score and the same bid or higher (depending on how low their Quality Score is). Improving Quality Score is the most impactful way to cost-effectively increase the position of your keywords. Having a high-Quality Score means you pay less to appear in high positions than competitors with lower Quality Scores.
Ad Rank is a factor used by Google to determine what position your ad appears on the Search Results Page (SERP) based on your CPC.
Ad rank is worked out by CPC x quality score = ad rank. The advertiser with the highest ad rank will appear first on the results page. As searchers tend to click the first ads, it will have an impact on the number of clicks you receive.
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