Controlling Campaign Budgets Is A Bad Idea. Instead, Concentrate On Bids.

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Controlling your campaign budgets is a dangerously inefficient strategy. I have seen campaigns exhausting budgets even before noon and not triggering ads after that time. There is definitely room for improvement and savings and I will show you how. In the following 2 example scenarios, We will be spending less amount of money but will be generating an equal number of clicks.

Scenario 1:  When Campaign Budgets Get Exhausted By Noon

Let’s say, we are bidding at 10$, and we are exhausting our budget of 1000$ by noon. Let’s also assume there is equal opportunity to generate clicks in the afternoon also. This gives rise to the following scenario.

Time Period Clicks Cost
0-12 hours 100 1000
12-24 0 0

We are generating all our clicks before noon and not triggering ads afterward.

Scenario 2: When Campaign Budgets Are Sufficient Throughout The Day

Let’s change this situation by reducing our bids to 5$. Since we reduced our bids, the number of clicks we can generate in a given time period will come down. This is primarily because of a drop in average position. Ads which are at higher positions will generate more clicks than one in lower positions). let us look at the resulting scenario.

Time Period Clicks Cost
0-12 hours 50 250
12-24 50 250

Conclusion

As you can see from the above scenarios, letting your campaigns run throughout the day without exhausting the budget enabled us to get 2 times more clicks at the same cost.

Scenario Clicks Cost
1 100 1000
2 100 500

I have oversimplified the example. I said that there will be an equal opportunity of impressions before noon and after noon. And that AdWords will generate clicks at equal value as the bid value. Although these assumptions are not completely true, they are indicative of how real campaigns will work.

As a rule of thumb, always try to keep your ad campaigns run without the exhausting budget or the very least do not allow more than 20% of loss in impressions due to budget.

And an important note, always track your weekly spend, not your daily spend.

Know how much should you bid for your Call-Only Campaign in AdWords ?

About the author

Salil Panikkaveettil

CEO and co founder of AdNabu. Exploring the intersection of data and marketing

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