With bid strategies and automated rules (in Google AdWords), you do not have to manually monitor every account every day. These are valuable tools for marketers who have multiple paid accounts. Setting some basic rules is a big time saver.
However, it is still important to know how to manually monitor a paid budget to keep costs under control. Below are three steps to address underspending in your paid account and four steps to address overspending. Even if you represent a large shop where tens of thousands of dollars are spent each month, understanding these budgeting strategies will help you get the best return for your dollars.
Prevent underspending – Ad spend bids
Spending less than your daily budget is not necessarily a good thing. If you have run paid campaigns for a while and continue running them because of a positive return, then you want to reach the daily budget you set up in your account. Underspending may happen if you choose a bid option of Target and Bid instead of Bid only.
With Target and Bid, you restrict ads to a specific targeting method. If that criteria is not met, the ads will not show. With Bid only, you are not restricted to the selected targeting method. With a group that is underspending, change the bid type to Bid only.
Prevent underspending – Share a budget
Some campaigns may not be hitting their targeted daily budget because of settings at the campaign level. If that occurs in AdWords, consider the Shared Budget tool which does exactly that – it shares a budget across campaigns.
With a shared budget, you are more strategic about your spend so your high performing campaigns receive the most budget, yet your under performing campaigns are not completely ignored. This provides a chance for those poor performing campaigns to do better and potentially earn more of the daily budget over time if you decide to reallocate the budget at a later date. (This feature is also available in Bing.) However, this is not recommended with a test campaign since your goal is to have enough data to determine if certain ad groups or keywords should be allocated a higher spend threshold.
Prevent underspending – Accelerated Delivery
The recommended setting in AdWords for your ad delivery method is Standard: Optimize delivery of ads, spending budget evenly over time. And the rationale for that makes sense. Accelerated ads could result in lost traffic at the end of the day.
But Standard delivery could result in your budget not reaching the daily spend. If you are not spending your full budget, change your delivery method to Accelerated. With this setting, Google will enter your ad into all eligible ad auctions until your budget is spent for the day.
Prevent underspending – Disapproved Keywords
If you have a very tightly themed campaign with only a few words and some of them are disapproved, your ads will show less often and you may not reach your daily spend. When you first create a new ad group, set up an automated rule so you receive a notification if a keyword is not triggering your ads. A keyword is disapproved for AdWords when it violates one of Google’s policies. If you disagree with the reason for disapproval, it’s worth calling support or submitting a support case stating your case for why your keyword should be allowed to run.
Prevent Overspending – Monitor placement performance
Whether you use automatic or manual placements, it is very tempting to set it and forget it. Even though a site may seem relevant to your campaign, it does not mean that it is relevant. Compare the performance of your different placements to determine if there are some you should exclude.
If a particular site in your placement report costs a lot of money compared to other sites, meaning visitors click but never convert, that is a good indicator a site may need to be excluded. You should also look for irrelevant URLs. I frequently find automatic placements in accounts that are not at all relevant to the client’s offering even though the general targeting method indicated a site was relevant. If it is not clear what a URL is about, simply copy and paste it into your browser to view the site. From there, use your first impression when evaluating whether a placement should stay in your campaign. If the site is relevant topic-wise, but the site is poorly designed or looks spammy you may not want your brand on there.
Prevent overspending – Poor quality keywords
With an automated bidding rule, you can automatically increase your bid every time a keyword falls below the first page.
But before you automate this, you want to ensure it is worth spending more money on your keywords. Start by reviewing keywords that have a low CTR (click-through-rate) since this affects your quality score (QS) for keywords. A low CTR impacts how often your paid ad is shown and you could be charged more when it is shown.
You also want to check the Search Lost IS (rank) for your keywords. For example, a rating of 50% means that in half of customer searches that could trigger your keywords, the ad was not shown because of ad rank or because you were outbid by a competitor. Check if the keyword in question is profitable before deciding whether to bump this up to the first page rather than making a quick decision to beat a competitor no matter what. If a keyword not giving you enough of a return for what it will cost you, you may want to pause it instead. Or you could create a new, more relevant ad group with a specific landing page to increase the quality instead of the spend.
The Search Lost IS (budget) is another good number to check because it tells you if you are running out of budget. If this number is 50%, it indicates you are running out of budget halfway through your daily. Here too, you want to look at the data collected so far before making a decision about increasing the budget.
Prevent overspending – Ad Position
“I want to be #1 on Google”. Whether it’s organic or paid, everyone wants to be the top result on Google since many people never make it to page two. But does it really matter if your paid ad is #1? This is where conversion data is especially valuable. You do not want to use a bid strategy for the top of the search results if it doesn’t provide a return. An Adobe Media Optimizer study indicated that paid ads in the 4th position may have the best results. Remember to look at this in light of your data. Bid strategies are a very useful part of AdWords but gather data before you use a strategy, especially when it comes to targeting the search page location.
Prevent overspending – Check device type
There could be costly conversions in your account which result in you spending money for conversions with a poor ROI. Your best conversions may happen on a mobile device but you do not know that until you look at the Attribution report in AdWords.
To specifically view conversions by device type, choose Cross-Device Activity on the left hand site in the Attribution section.
Your Devices report shows how visitors used their devices before converting. They may switch back and forth with their tablet, mobile and desktop device before finally converting.
If a device type is not frequently used to reach a conversion, it does not mean you should completely exclude that device type because usage may change over time. For example, if you discover that Tablets with full browsers have few conversions or conversions that add little to your bottom line, you can set a bid adjustment to slightly decrease the amount spent on tablets. As a result, your budget will be better spent on the devices that provide the best return.
Both overspending and underspending can be problems with your paid accounts. Even with all the automated tools available, there are still some manual things you should pay attention to in your accounts. To recap, if underspending is an issue, check the bid settings for your ad groups on the Display Network, consider sharing a budget across campaigns, and use accelerated delivery. Although you technically can’t overspend for the month when you have a daily budget, you can overspend on ads that do not product results.
If that type of overspending occurs, check your placements to see if they are quality ones for your business, stay alert for poor quality keywords, monitor ad position, and check your device type. None of these changes are complicated when it comes to managing a PPC budget and minor tweaks can make a big difference in your account.
And if you are managing budget and bid data for multiple accounts, consider using the Client Budget Tracker & Alert, which makes it easy to view these moving parts on one screen. This reporting template will help you avoid under- and over- spending by showing what percentage of budget was spent. You can also monitor the allocated budget, budget spent, daily spend and budget projection on the chart for each of your clients.