The most common situation that comes up, especially for small businesses, are budget limitations. But, whether you’re small or large, if you’re looking for low hanging fruit on account performance, take care of your campaigns that are limited by budget – they’re obvious red flags and can be dealt with rather swiftly and easily. But before we hop into the nitty gritty, let’s understand why we don’t want to be limited by budget.

We don’t want to be limited by budget because we’re placing a cap that is throttling ad impressions. However, the limited exposure can have a positive or negative impact on performance. If it’s a case of burning out budget when performance is good, then we’d obviously want to increase budget to increase the volume of good performance. If it’s a case of burning out budget when performance is sub-optimal, then we cut spend in those areas, but just cutting budget may actually hurt performance. There are other options. So without further ado, let’s hop into our 3 guidelines and look at a corresponding example.

 

1.)    Identify Campaigns “Limited By Budget.” By knowing where your money is at, you are able to make more educated decisions on where to cut and increase spend. If there are areas that aren’t generating good results, cut spend. Conversely, increase spend where costs are low and revenue is high without modifying your budget.

 

Ex.

Campaigns that are limited by budget are shown at the account level. With the campaigns that are burning out budget identified, we are able to make decisions at the high level to maximize the efficiency of our spend. Depending on performance, we may have to cut spending or increase budget.

 

2.)    Pull Back Bids. Somewhat counterintuitive, more times than none people will unknowingly waste thousands of dollars bidding high on keywords thinking that higher position will generate more sales. This is  true to some extent, but it doesn’t always scale on keywords that have never converted.  Most of the time the costs of being in top positions outweigh the returns. By weeding out and cutting bids in unsuccessful areas of the account we save loads of money. As a result, we can focus our budget into areas where we can see the highest proven returns. Let’s look at one of the campaigns limited by budget.

You can also play around with Adwords Delivery Methods to see how you can optimize time-of-day bids.

The CPA is a bit higher than our CPA target of $40, so cutting spend to lower the CPA is our best option. More importantly, cutting spend will potentially cure our budget limitations and allow us to show for longer periods of time without burning through our budget.

One more thing to consider is that if you’re burning through your budget early in the day, you could actually be hurting your number of conversions and conversion rates because conversions may pick up in that later part of the day. By ensuring your campaign is not limited by budget, you can gather conversion rate data for the later hours which may compel you to increase your budget and grow your account!

 

3.)    Allow Your Budget To Grow With Your Account. With campaigns that are limited by budget but are showing positive growth for your business, you should continue to invest. Account growth is limited by small budgets, so if you are hitting your target ROI and revenue is increasing, increase your budget in order to allow growth to continue.

Keep in mind that the spend varies by search volume, so seasonality, match type, and ad copy may all be factors in spending your budget, but you don’t want them to limit your growth. By understanding your account and knowing where the most profitable areas are, you will be able to grow your account, increase revenue and stay within your budget.

Key Takeaways:

Telltale Signs to Lower Bids:

  • Performance is way off target.
  • Certain ad groups and keywords are eating up most of your spend.

Telltale Signs to Increase Budget:

  • Performance targets are being met.