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Keyword bid in relation to campaign budget

Explorer ✭ ☆ ☆
# 1
Explorer ✭ ☆ ☆

Is there a theoretical point where the size of a keyword bid in proportion to the budget will result in fewer impressions?


I have my campaigns set to run evenly all day. My ads seem to be competing well and my keywords have QS between 7 and 10. In one case the bid for an entire ad group of keywords is $2, but my daily budget is $10. Does this mean that if there is a flood of searches at the same time of day, my ad won't be shown because Google is trying to space out my budget over the course of the day?

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Re: Keyword bid in relation to campaign budget

Top Contributor
# 2
Top Contributor

Hi Fnippy,

Welcome to the community.


You are right,your ads will not show as often or may not show at all depending on the budget. In your example, a flood of searches would mean that it would be likely that your ad would be "throttled" based on your daily budget. Remember, your budget is per CAMPAIGN.

Have a read of this:


Especially the following:

Avoid a depleted daily budget

If you have a limited budget, you want to make the most of every cent you spend on your advertising campaign. When your budget is limited, your ad might not show as frequently as you'd like -- or might not show at all. Instead of discontinuing your campaigns and missing out on clicks, or spending more than you can comfortably afford, we'll share some techniques for spending your budget more effectively:
  • Lower your bids for campaigns that are "limited by budget," potentially reducing the average cost per click.
  • Let AdWords automatically bid for you to get as many clicks as possible with your campaign's current daily budget.
  • Choose "Standard delivery" for your ads, instead of "Accelerated delivery."
  • Look at the recommended budget to estimate how a different budget could improve your performance.

Re: Keyword bid in relation to campaign budget

Top Contributor
# 3
Top Contributor

Hi @fnippy futher to Dave's reply I'd just say that once your CPC becomes a reasonable percentage of your daily budget, results can be unusual.  Bear in mind that Google is attempting to show your Ads as often as possible while respecting your daily budget and to do this they take into account your typical CPC, CTR and daily budget.  If you have one keyword with a typical CPC of $0.10, a CTR of 10% and a daily budget of $100, Google can estimate you can receive 10,000 impressions per day.  If the search traffic for that Keyword is only 8,000 searches per day, that's great, your Ad should be shown for every search.  If your CPC is $2, your daily budget $10 and you have a CTR of 10%, then your Ads can only be shown 50 times a day.  If your keyword could have 8,000 searches a day then clearly Google is going to show your Ad very infrequently.  


The key metric column you should be looking at here is the Lost IS (Budget).  The higher this figure, the more "opportunities" you're losing.  When you show your Ads very infrequently (against all possible showings) there's a high possibility you only showed those Ads to people who will not buy.  When you show your Ad for all possible searches, you at least know exactly how many people are likely to convert.


Imagine this scenario:There are 100 cars in an all-day parking lot and in those 100 cars there are 2 people who will buy as a result of seeing your flyer.  If you put flyers under 10 car windshield wipers per day there is a set chance you will never put a flyer under the windshield wiper of someone who will buy.  If you put a flyer under every windshield wiper you will always find two buyers.


The danger of running Campaigns at less than 100% impression share is therefore that you can run the Campaign(s) for months without a sale because you always "miss" the people ready to buy.  It is therefore much better to run a Campaign for a shorter period at 100% share and to measure and analyse those results than it is - normally - to run an extended Campaign at less than 100% share.


You do have to give Campaigns a chance.  If you were thinking of spending $10 a day then took this advice and spent $300 in a single day, you may choose a day where no-one converts so ideally you want to pick a period that explores variations; at least a week and preferably a month.  


We have seen many advertisers here that have said they spent $XX,000 in five years without results.  In some cases it's possible that if they had just spent more per month for a shorter period, they'd have seen positive returns.



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Re: Keyword bid in relation to campaign budget

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Explorer ✭ ☆ ☆
# 4
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Thank you for your help and suggestions.


I have found the that Impression Share reporting is a bit off for me, perhaps because my website hasan affiliate extension and therefore my domain is not unique to me. (Yes, I'm following all guidelines here and with the company I'm promoting). Even when I know my ads are being beaten by other affiliates, I still show a very high IS, so I'm asuming the reporting is by domain, not by Adwords Account.

I'm going to experiment with my bids and budget a bit. I'm not comfortable with automatic bidding after trying it for several months when I first started. My ROI didn't become acceptable to me until I took control and went with manual bidding.