What To Do If Your AdWords Campaign Is Limited By Budget

When we optimize campaigns that are limited by budget there are certain steps we can follow to improve performance. These steps are the most basic optimization procedures, but without them, you would be throwing your money away.

Once we have determined that our campaigns are not performing to their max potential because of lack of funds, we must decide how to fix this.

The first thing to consider is, are you experiencing a positive return on your investment? If so, then go ahead and up your budget. Simple as that!

However, if you have not yet reached a positive ROI, consider the following actions to help you get there:

Use Ad Scheduling

One of the great things about AdWords is that it provides you with almost unlimited amounts of information. One of those pieces of information is the ability to know when conversions occur.

And this is where ad scheduling can help you bring down costs. For example, recently, one of the campaigns we handle was severely limited by budget; ads rarely showing past 2 pm.

Upon analyzing traffic, a pattern emerged: we identified that clicks at the beginning of the day (8 am – 12 pm) were almost 50% more expensive than later in the day.

Is this due to increased competition in early hours where all budgets are starting fresh? Do more businesses choose these hours to advertise?

Whatever the case, scheduling our ads from 6 am to 8 am and then from 12 pm onwards has allowed us to show our ads later in the day and increase a number of customer calls.

Is ad scheduling right for you? It more than likely is. When analyzing the data, be sure to use a sufficient date range to ensure a complete picture of your traffic.

Decrease Bids To Place In Lower Positions

Sometimes, AdWords managers, especially those still green behind the ears, insist on being in top position. To them, being first means being best. Well, that’s not the case in AdWords.

The top position will oftentimes be the most expensive and least productive position to be in.

By decreasing your bid, and position, you will be paying less per click. This means that if before you were bringing in 30 clicks per day with a $60 budget ($2 CPC), by bringing down bids to $1.5, you can generate 40 clicks. That’s a 33% increase in clicks!

More clicks mean more visitors to your site and more potential customers. Review your campaigns and consider running a test for 2 weeks where you bring down bids and compare conversions to previous periods. You might be surprised with the results!

Pause Non-Converting Keywords

This strategy should only be undertaken if you have conversion and call tracking installed on your account. If you do not, please don’t try this at home.

Before you begin to pause keywords, you need to make sure they are not generating online conversions or phone calls.

A great way to keep track of which keywords are converting (online and offline) is to import your call tracking data into analytics and then into AdWords.

You can then label those keywords in AdWords to ensure you don’t pause any keywords that have converted in the past.

After identifying those non-converting keywords, you can pause them, allowing your converting keywords more budget to perform. This will result in a boost to your sales and ROI.

Pause High CPC Keywords

As I mentioned above, top position is oftentimes the most expensive and the least productive position to be in, except when it’s not.

These high-ranking keywords may be among the most expensive in your campaign but may be bringing in conversions.

At this point, we want to analyze the Cost Per Acquisition of these keywords and determine whether our budget may be better utilized by keywords that convert at a lower price.

If the answer is yes, then we can pause those keywords and see our sales increase.

Add Negative Keywords

An oldie, but goodie… When reaching daily budget, make sure that you are only showing up for relevant searches.

Negative keywords not only stretch out your budget, but they increase your campaign’s CTR, which will improve your Quality Score and decrease your Costs Per Click, resulting in more clicks for your budget.

The above steps are all meant to decrease your Cost Per Click and provide more bang for your buck. But as always, they should be performed with sufficient data to ensure the desired outcome.

Make sure you have the necessary tracking tools in place to measure account performance.

If you find you have decreased your overall spend, but have also decreased your traffic, or worse your conversions, review your actions and make the necessary changes to increase performance.

About Adwords Return on Investment (ROI)

Whether you use AdWords to increase sales, generate leads, or drive other valuable customer activity, it’s a good idea to measure your return on investment (ROI). Knowing your ROI helps you evaluate whether the money you’re spending on AdWords advertising is going to a good cause: healthy profits for your business.

How ROI Works

ROI is the ratio of your net profit to your costs. It’s typically the most important measurement for an advertiser because it’s based on your specific advertising goals and shows the real effect your advertising efforts have on your business. The exact method you use to calculate ROI depends upon the goals of your campaign.

One way to define ROI is:

(Revenue – Cost of goods sold) / Cost of goods sold

Let’s say you have a product that costs $100 to produce, and sells for $200. You sell 6 of these products as a result of advertising them on AdWords, so your total cost is $600 and your total sales is $1200. Let’s say your AdWords costs are $200, for a total cost of $800. Your ROI is:

($1200 – $800) / $800

= $400 / $800

= 50%

In this example, you’re earning a 50% return on investment. For every $1 you spend, you get $1.50 back.

For physical products, the cost of goods sold is equal to the manufacturing cost of all the items you sold plus your advertising costs, and your revenue is how much you made from selling those products. The amount you spend for each sale is known as cost per conversion.

If your business generates leads, the cost of goods sold is just your advertising costs, and your revenue is the amount you make on a typical lead. For example, if you typically make 1 sale for every 10 leads, and your typical sale is $20, then each lead generates $2 in revenue on average. The amount it costs you to get a lead is known as cost per acquisition.

Why ROI matters

By calculating your ROI, you can find out how much money you’ve made by advertising with AdWords. You can also use ROI to help you decide how to spend your budget. For example, if you find that a certain campaign is generating a higher ROI than others, you can apply more of your budget to the successful campaign and less money to campaigns that aren’t performing well. You can also use ROI data to try improve the performance of the less successful campaigns.

Use conversions to measure ROI

To identify your ROI, you first need to measure conversions, which are customer actions that you believe are valuable, such as purchases, signups, web page visits, or leads. In AdWords, you can use the free conversion tracking tool to help track how many clicks lead to conversions. Conversion tracking can also help you determine the profitability of a keyword or ad, and track conversion rates and costs-per-conversion.

Tip

Many AdWords advertisers use Google Analytics to track conversions. It’s a free web analytics tool that helps you learn how your customers interact with your website. Learn more about importing conversions from Google Analytics..

Once you’ve started to measure conversions, you can begin to evaluate your ROI. The value of each conversion should be greater than the amount you spent to get the conversion. For example, if you spend $10 on clicks to get a sale, and receive $15 for that sale, you’ve made money ($5) and received a good return on your AdWords investment.