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What happens when search campaign consistently meets its daily budget?

[ Edited ]
Google Employee
# 1
Google Employee

Hi AdWords Community,

 

I’m Sonakshi from the AdWords team, and I’d like to share some information about a common question that we hear from customers: What happens as a result of a search campaign consistently meeting its daily budget?

 

Think of it like this -- a fruit seller used to get 10 apples from his farm every day to sell. These 10 apples filled the demand of fruit lovers in February, 2015. But as time passed, the demand grew higher and customers were left disappointed when the first 10 apples sold out, and started buying from his competitors. Essentially, you are losing potential customers and potential business.

 

There are two scenarios here:

 

Search campaigns may meet your daily budget when:

  1. Budget was used up evenly throughout the day
  2. Budget was met before the day actually ended

 

Scenario 1: Budget was used up evenly throughout the day

 

Your ad serving is spread evenly through the day, you gather impressions, acquire clicks and your budget is exhausted.

 

Points to note in this scenario:

 

  1. Since ad serving was evenly spread through the day, we didn’t miss out on peak hours.
  2. However, since the system was forcing the even spread of budget through the day, it was serving restrictedly, thereby showing lesser in each hour eventually cutting down on your potential reach
  3. Lost reach would mean lost impressions thereby reducing your impression share, meaning your competitors are slowly taking over
  4. Competitors/New Entrants taking a part of the impression share that could have been yours will lead to your brand recall value going down, boiling down to lesser returns on investment (You may want to look at impression share metrics for the campaign. This will help you understand the percentage of impressions you lost and percentage of Lost IS budget and Lost IS rank.)

 

Scenario 2: Budget was met before the day actually ended

 

Your ads are serving, you are gathering impressions, acquiring clicks until your budget exhausts, and then your ads stop serving.

 

Points to note in this scenario:

 

  1. Aggressive ad serving till the budget is exhausted could also mean you missed out on your potential customer who was active at the other hours of the day.
  2. Not only did you lose your consumer at the hour when your ads were stopped by the system because your daily spending limit was reached, but also you proactively gave your customer to one of your competitors whose ads were serving at that particular hour
  3. Lost reach would mean lost impressions thereby reducing your impression share, meaning your competitors are slowly taking over
  4. Competitors/New Entrants taking a part of the impression share that could have been yours will lead to your brand recall value going down, boiling down to lesser returns on investment (You may want to look at impression share metrics for the campaign. This will help you understand the percentage of impressions you lost and percentage of Lost IS budget and Lost IS rank.)

If you take a close look, the common consequence in both the scenarios is: Lost Potential Impressions = Lost Potential Business = Potential loss of ROI. This is precisely what happens when your Search campaign is consistently meeting your Daily Budget

 


 

FAQs 

 

Q: Well Sonakshi, this is great, but, I can afford only this much per day. My client has specified a daily spending limit and I can’t go over this!

 

A: Ideally, you should first go back and assist your client with reflecting that AdWords is getting the traffic it’s promised and your consumers out there are actively looking out for you. Demand is optimum, so supply should be too. So even a small raise in budget could make a huge impact on your profit!

 

To show them what wonders it can do, check out your Recommended Budget and make amends as much as you deem fit followed by monitoring results.

 


 

Q: Is there any way to gain back some of that lost impression share, but still keep the same budget? Do I really have to raise my budget?

 

A: You can make almost any budget work in your favor. Here are some of the things you should give a shot and see the difference:

 

If your campaign is being Limited by Budget (sometimes shows this messaging under Status column), meaning there are more impressions available for the campaign but are restricted because of the budget constraint -- and you’re not willing to increase the budget just yet --

 

  1. Keep the budget the same. Lower down your bids. Lowering bids would potentially reduce the average CPC, thereby using up your budget longer during the day Note: Lowering the bids too much may however stop the ads from serving completely, so you must monitor the change in performance post making these changes.
  1. Pause/Remove Underperforming Keywords. If you notice a keyword’s relative performance to not be considerably good, go ahead and pause it so that the bids for that keyword can then be used up for the higher performing keywords.
  1. Do away with the irrelevant searches and save up on your budget. Skim through your Search Terms Report every 2 weeks, and pick all the terms from user search queries that may have gotten your ads clicks that were irrelevant and costed you (the same amount which could have been used for other relevant clicks) and put them under Negative Keywords.
  1. Consider Standard Delivery Ads instead of Aggressive. Standard Delivery of Ads will ensure that your budget is spread evenly through the day, whilst Accelerated Delivery option instructs the system to get you as many clicks as possible without any restriction of the time of the day.

 

2 Expert replyverified_user

Re: What happens when search campaign consistently meets its daily bud

Community Manager
# 2
Community Manager
Thanks for sharing this Sonakshi!

Re: What happens when search campaign consistently meets its daily bud

Explorer ✭ ✭ ☆
# 3
Explorer ✭ ✭ ☆

 Hi Sonakshi!

 

Thanks a lot for the sharing! Very insightful and excellent thinking Smiley Happy

 

I also would like to discuss my thoughts on how the budget is set. I'm the in-house advertiser for our business and we of course do have monthly budget as well. But basically this budget is quite flexible - we calculate the ROI by two metrics which are conversions(leads) and Cost per conversions.

 

It doesn't took too much time to figure out the reasonable cost for a conservation that can maintain a continuous business. So the number is 40 USD per conversion, and we're always happy to acquire leads that cost around the number. Apparently, we're more than happier to invest more money when it's getting more cheaper.

 

Based on that context, my solutions are concluded as below:

 

1) I pull out all the best performed keywords/ad group and form several new campaign, which can beat the target cost per conversion all the time so I'll leave this campaign as unlimited budget setting.

 

2) For those rest of the campaign that are a bit expensive, I've already accumulated 12 month back data. If you look at the dimension tab, you'll found the performance by Hours of A Day, which is great reference on how you could adjust your bid according to it. For example, during your high peak period, you should bid up, and do conversely in the low peak, assuring your ads can show in lower ad position without sacrificing too much impression while avoid bad clicks in the meanwhile.

 

3) If you're really care about the budget limitation, I would strongly suggest you focus on a longer time period way of looking it. Spend more on the well-performing day and vice versa. In my cases, Weekdays are much better than weekends so I can beat the monthly target without increasing a dollar to the budget. Google automate features can help achieve everything like that.

 

Please discuss with me if you disagree with the approach above or any other good ideas!

 

Thanks,

Jason