Controlling your Costs in AdWords

Some good tips to minimize your spending and maximize your ad exposure can be found here. Don’t forget to set your ad goal first and choose the right ad campaigns for you, whether on the Search or Display Network.

When it comes to choosing how to best budget your ads, there is a wealth of information to take into account first. Once you’ve chosen the right budget option for you, you can optimize it by using Google AdWords automatic options or budget recommendations. Understand why sometimes Google may charge you more than you have set for an ad, or what to do when your ad budget runs out.

Take a look at your bidding options:

Bidding Options AdWords

Automatic/Manual CPC

CPC bidding is the price you are willing you are willing to pay for someone to click on an ad. Each CPC is unique and adjustable, depending on the kind of business you have. If you own an store where each paintbrush costs €2, and you have a car dealership with cars priced well into the thousands, your CPC will vary.

An automatic budget amount allows you to choose exactly how much you wish to spend for each campaign. To give you peace of mind, your set daily budget is the maximum you will be charged for an ad in any auction (this is known as the max CPC). During auctions (when Google acts as the judge and decides which ad to display and in what order), the amount you will be charged will vary from day to day, depending on your competitor’s ads. Yet it will never exceed the budget you set. If Sheila O’Flanagan wanted to spend €2 per day, per month the max she will pay will be (2 X 30.04)= €60.80. Keep in mind, if Sheila decided to budget to €1per day, her ad may appear in a position further down the Google Search Results Page, or even on the second page, less visible by the viewers. If Sheila chooses automatic bidding, this means that her adverts will seek out to as many clicks as possible based on her budget.

Keyword bidding can also be manual, although if you have many keywords, it may be very tedious to individually set a CPC for each. Let’s say Sheila wants to sell a certain product more than others, for example ‘kitchen utensils’. She could manually choose to change the CPC for that particular keyword and set it at a higher price so that it is displayed more often, therefore attracting people to the kitchen utensils section within her business.

You can also set a max CPC for ad groups, keywords and placements. If an ad group with a specific set of keywords is doing better than another within that campaign, you can increase the CPC. If your ad is doing well on a particular website, like a blog, you can increase the placement-based CPC.

For Keyword bidding, you can allow Google AdWords to help you choose which keywords would require manual bidding or how much you should bid for. Go to Opportunities within the Keywords tab. There you will find the Bid Simulator which would estimate your impressions and clicks if you had set a higher bid over the past 7 days. This will give you a good idea whether to increase or not your keyword CPC bid. Also, with Enhanced CPC you can have your max CPC increased by 30% so that your ad can compete better against competitors and in the ad auction to appear on sites likely to lead to customer clicks. If an ad is not doing so well at a particular time, it will fluctuate the bid to generate as many clicks as possible. Conversion tracking also will allow you to know which keywords trigger conversions (whether sales or subscriptions), and when. If you know which keywords lead to conversions, you can increase the bid for that particular keyword. First page bid and top page bis estimates will also tell you the approximate bid amount necessary to stay on top of the page on the first search results page.

The Conversion Optimizer will also help you to get more conversions, but unlike Enhanced CPC that works within a max CPC, the optimizer automatically choose a CPC bid for each ad auction, but will be limited by your CPA bid.

The max CPC you set is also affected by Quality Score and Ad Rank.

Inside a campaign you have running, click on Ad groups and ‘Display Network Max CPC’. Your CPC for Search Network and Display Network are not dependent.

Manual CPM

Unlike CPC, with CPM you can only manually set the budget amount. CPM bidding is generally recommended for those marketers who wish to bring more brand awareness, or for example who are on the ‘Display Network Only-Remarketing’ or ‘Display Network- All Features’ campaign types. Choosing image or video ads is also a good way to control and maximize CPMs. Ads with specific messages in them such as venues, dates, times, locations etc. are ideal for CPM bidding since viewers don’t necessarily need to click on the ad to see information. You can also set a max CPM. You can set up CMP at ad group level and placement level. If Sarah’s bakery sells scones and she has many types, such as ‘raisin scones’, ‘fruit scones’, ‘chocolate scones’ etc., she may want to draw attention to the ‘scones’ ad group and increase the CPM for those keywords. If her ad does well on baking blog websites, she can increase the CPM bid for those locations (a.k.a. placements).

CPA

CPA bidding is not always an option. You must show Google that you have a conversion tracking enabled, since you are bidding for acquisitions (that is direct sales/signups, or conversions). You must have at least 15 conversions in the past 30 days and a clear, steady conversion history for the past few days and an e-commerce website.

Each budget you set is unique to each campaign. Within the Campaigns tab, go to Select Campaign Settings and go to Bidding and budgets to establish a budget. SAVE!

It is a good idea to check your daily budget regularly as if your budget is low or used up, it means your ads will not display, missing out on impressions and clicks.

If you change a budget in the morning or mid-day, your ads will be displayed according to when it generates more clicks. If your budget change is big, your ad will display evenly throughout the day to use up you budget change.

If you change your budget many times per day, Google will charge your based on your highest budget of course.

If you change your budget in the middle of the month, Google will charge you the new budget amount multiplied by the number of days left in the month, plus the amount spent before you made the change with your old budget.

Keep in mind that if you change the campaign date, delivery mode or time zone, this is is considered also as a budget change.

When Google Charges You More Than Your Daily Budget 

Don’t panic. It’s for the Good. If Sarah has an ad about lunch meal offers in her take-away restaurant, and Google sees that people are most likely to click on her ad during lunch time on weekdays, it will choose to display her ad at that time during the week, meaning that a maximum of 20% increase in her daily budget can occur, but this will be leveled out by the end of the month so that it complies with your monthly budget.

What If Your Daily Budget on AdWords Runs Out?

How can you make sure that your budget does not run out and risk your ad not being displayed? Some options include tweaking the budget and bidding options or choosing a delivery method for your ads.

There are more than one bidding options in AdWords. CPC is the maximum you will be charged daily when someone clicks your ad. You can choose Manual or Automatic bidding. Manual bidding is the default setting. You choose the bid amount for each ad group or individual keywords. Automatic biding will allow AdWords to manage bids, based on your specified budget in an effort to gain you as many clicks as possible within the limit of your budget.

In your Campaigns section, select the Keywords tab and you can change the bid budget per keyword. Unsure how much you should bid for? There are some tools that help you decide the amount you should bid for like Google Keyword Planner.

While it may seem logical that the more you pay, the more likely your ad will be a success, that may not be the case. It also depends on the Quality Score of your ad.

Sometimes you may need to enhance your campaigns and set bid adjustments. With bid adjustments, your bids will increase or decrease depending on how it competes against other ads in similar locations or times of day, but never passing the bid budget you have set. Set your budget for each campaign as high as you can allow. Don’t forget the View recommended budget option as a guide, if its available. AdWords will track the performance of your ad and if it appears successful and meets its daily budget, it will show you ways to optimize your budget for more impressions and clicks. Go to Settings, Budget and Edit. Then View recommended budget. Interested in how these recommendations are calculated? Well, AdWords takes into account keywords in your ad and sees how many people may have clicked on it if you were not restricted by budget. Let’s say Joe’s ad contains the keywords ‘best pizza delivery in Dublin’, and his budget ran out at 5pm. His ad will no longer be shown, but that is not to say that people won’t search for ‘best pizza delivery in Dublin’ in the evening and night, therefore he loses on the chance to have his ad clicked on. A potential number of impressions is calculated by AdWords. This hypothetical number is compared to your CTR, and how much each ad click costs, i.e. your CPC. It also takes into account your current budget to recommend a reasonable new budget to you.

There you have it! All the ways to control and set your ideal budget for AdWords, how to choose the right bidding option for your ad campaign, and how to maximize the amount of interaction you receive from your target audience.