AdWords Budget Maximization

If you have been running a Google AdWords campaign for over a month there will be enough historical performance data to optimize and maximize your budget dollars.  The key to effectively managing your budget is to start at the top and drill down to the detail.  If you try to start at the detail level, you will spin your wheels in too many places.  I would normally like to see a campaign running for about 3 months before make too many drastic changes.  If your business has high seasonality, you should base your important decisions on data gathered when it matters most.

Budget maximization is not only about squeezing dollars.  It should be viewed as finding the right places to spend your advertising budget, which means both increasing and decreasing the amounts spent.

Use Conversion Tracking

By running a campaign, you must have some marketing goal in mind that you want the traffic to your website to accomplish.  In most situations, this is purchasing a product or becoming a lead by filling out a form.  If you have identifiable actions such as these on your site, then you should be using Conversion Tracking.  This feature tracks your visitors arriving to your site through the click of an ad.  If they complete the desired action, they are a Conversion.  Tracking conversions shows how your advertising dollars are generating sales and/or leads and provides a cost factor per conversion.  This will be key data used in the following budget maximization efforts.

AdWords Supplies a Ton of Data

There is enough data in an AdWords account to drown away an entire morning of clicking, sorting, secondary dimensions, more clicking and more detail.  The key to not wasting your time and getting the most from your efforts is knowing how to spot the opportunities.  I am assuming you are running a fairly typical campaign, using the Google search network and Google display network, with text ads and image ads.  Also, within each Ad Group, you have multiple ad variants and a suitable list of keywords.

Begin at the top, at the Ad Group level and compare your performance across the board.  The key metrics will be conversions, cost per conversion, clicks, cost per click (CPC), impressions and click through rate (CTR).  This same set of key metrics and viewed at the campaign, Ad Group, ads, and keywords levels.  A conversion is the highest measure of commitment (an likely value) that a website visitor can make.  So any combination of high high conversions is a positive sign.  As long as the cost per conversion fits within your marketing goals, then the high conversion components of your campaign should be what you view as successes.  For the most part, these top performing assets can be left alone to continue performing well.  Where you want to focus your time is where you see high campaign dollars spent, and few conversions.  These are visitors to your website which are costing you dollars, but not returning value.  Dig deeper in these areas and look for specific ads with high dollars spent low conversions.  Also look for keywords generating high traffic volumes but not resulting in conversions.  Where this is happening, you are taking budget dollars away from other ads and other keywords that may perform better.  By simply pausing the campaign elements costing you money, you can retain the data, but free up the budget.  Don’t delete your low performers, just pause them.

Trading Budget $’s

stretching-adwords-budgetsWhen you set your budgets at the start of the campaigns, you had an idea of where the search traffic would come frsqueezing_cents_from_dollarsom and where your dollars needed to be.  Now that you have actual data, from actual search traffic, let the dollars guide you.  Unless you have other marketing goals not related to ROI, begin shifting dollars from elements that are simply driving cost to those that are generating traffic and conversions.  That should mean both shifting dollars, trading from low performers to high performers, as well as adding dollars.

Be prepared to look out side your AdWords and outside your digital media budget to compare the performance of your AdWords dollars to other marketing expenditures.

Adjusting CPC to the Optimum Level

When you first start your AdWords campaign, I strongly recommend you let AdWords automatically set your max Cost Per Click (Max CPC).  This will give AdWords the flexibility to apply your budgets to where the search traffic is happening.  As you become more familiar with your performance data, you will should see some areas of your campaign that are frequently maxing out their budget allotment.  If you do not have additional budget dollars to apply here, then you ca follow another tactic to attempt to get more clicks and conversions from the same dollars.  Begin to manually turn down the max Cost per Click.  If you are maxing out the spend, then that means there are more clicks to be had, but your budget is running out before the end of the day.  Adjusting the max CPC downward by 5% increments can tweak your way to higher traffic for the same dollars. Make the change, then let it run for a couple of weeks.

If your adjustment leads to higher traffic, be prepared to trim the max CPC by another 5%.  Be patient, don’t try to get there all at once with a 25% reduction or you may under price your way into traffic loss.  Once you reach a point where a 5% reduction no longer gets you more clicks for the same dollars, then adjust back on 5% increment.  You have found the line, go back.

Down to the Keyword Level

Managing your campaign at the Keyword level might meant that you have a lot of spare time.  For a sizable campaign, you might have upwards of 1000 keywords.  Trying to manage too much detail at tool low of level can leave you chasing the data instead of using it to guide you.  At the keyword level, i recommend that you do the following:

  • set the date range to 3 month or more
  • sort the keywords by conversions
  • pause the keywords with high media cost, low click through rate, and zero conversions

Using Google AdWords and Google Analytics Together

We will discuss how to use these two powerful tools together, to gain more insights into your traffic generations campaigns.  This will be found in a future article.

Conclusion

Every campaign has something to gain by reviewing and looking for opportunities to improve the performance.  Use the AdWords performance data to guide you to the elements most needing your attention.