PPC Budgets: Optimizing Accounts with Budget Constraints

At some point in our account management adventures, we’ve all hit the point of needing to scale back our accounts’ budgets. Whether your account is large or small, it can be challenging to scale back your spend while maintaining an account’s performance. Whether your client has had to reduce their PPC budget, or you’re pulling back at the end of the month to stay under a pre-determined amount, here are some tips on the best ways to reduce your spend without sacrificing too much in terms of conversions/revenue:

Conduct a keyword bid audit. Look for keywords that currently have an average first position placement and see how far over your first page bid estimate you are. Usually can you can shave money off these bids and bring them down closer to their first page bid estimates without drastically effecting their average position or click-through rate. And, the easiest way to quickly save some money on keywords is to go through your account and pause all keywords that have a low click-through rate. You can also read more about reducing your spend with keyword bid changes in Rob’s post, Case Study: Bid Changes.

Adjust your campaign budgets. This one may sound incredibly obvious, but simply reducing your campaign budgets across the board will not be the most effective way to optimize your remaining account budget, unless all your campaigns are converting at an equal rate. I have yet to encounter a PPC account in which all campaigns were converting equally, so I’ll offer some suggestions:

  • Pause your campaigns that aren’t converting and let those that are carry the account. If you pause your under-performing campaigns you might even have extra money to put into your converting campaigns, which is a win-win situation.
  • Make sure you’re not only looking at your campaign budget amounts, but how much your campaigns are ACTUALLY spending. Just because your campaign budget is high doesn’t mean the campaign is spending that amount daily, so you might reduce a budget thinking you’re saving yourself money, when in reality your budget is still above the campaign’s spend. If you truly want to reduce your campaign spend, look at your spend column and not your budget column. You might be surprised at the discrepancy.

View your network segmentation. Are your Display Network campaigns spending too much? Scroll down to the bottom of your AdWords Campaign report and find out easily. If your Display Network metrics indicate a lower ROI than your search network investment, pause your Display Network campaigns. Hopefully you’ve segmented your search and Display Network campaigns separately. And if not, read more about best practices in Felicia’s post.

Use the Opportunities tab. Of course, I’m referring to the Opportunities tab in your Google account. Sorry, MSN! Sometimes you can rack your brain for ways to reduce spend effectively and still need some additional ideas. If you’re in AdWords you can ask AdWords to tailor its suggested opportunities to “maintain or decrease cost.” Sounds easy enough, right?

When I did this for one of my accounts Google suggested I try enabling automatic bidding for several of my campaigns. This was useful because it wasn’t something I had considered on my own. Briefly, automatic bidding takes your daily budget and tries to get you the most clicks for that budget.

The benefit of automatic bidding is that AdWords automatically adjusts your max CPC for you. This can make your keywords more elastic in not being married to the same CPC all day long. The downside is that you have less control over your bids, and ultimately over the daily shelf life of your ads is Google spends your budget early in the day. You might inadvertently further decrease your ad’s visibility if you use automatic bidding and have set a max CPC for your campaign, so you’ll want to monitor your ads closely if you try out this setting.

I hope this helps you reduce your account spend in an effective and methodical way if the need arises. Do you have some more suggestions to reduce an account’s spend in effective ways? Let us know in the comments below!

For additional information on reducing your spend, be sure to check out Jen’s post on ten tactics you can employ when you’re projected to be over budget.