Working in Paid Search, you are always aware that you are spending money and at times your promised budget changes. Sometimes you are given more money to help meet new goals such as lead acquisition or ROI but other times your budget is reduced without a lot of notice. Here are a few ways for you to take action in your account to reduce your PPC spend without having to turn out your lights on your campaigns.
Reasons for lowering budgets
There are several reasons for quick budget changes and often you may never know the reasons why your budget was lowered. For some businesses, there are periods of seasonality and the traffic is not there and the budget goes down. Other times there could have been a staff change that is learning the business before giving Paid Search the budget it had before. The most recent change I encountered was the entire internal structure for my client changed and the staff could not handle the number of leads generated through PPC and we were asked to lower spending until more staff was hired and trained for our traffic. It is easy to get upset when your promised budget is taken away from you. By understanding that there is a reason for this action and by working with the client to lower the budget while keeping the quality up, you may find in time that you will get back to your normal budget or even find room for expansion.
Finding the Priority
When you are working on reducing spending, the first thing to focus on is your client’s priorities. Do they want to focus on a certain element of your campaign such as brand or do they still want to hit a certain KPI? If the client doesn’t have a focus besides just lowering spend, then make your recommendations based off of the KPIs you work on improving week over week. Once you know what metrics matter to the client besides spend you will be able to figure out what your next steps are for your account. Keep in mind, to hit the reduced budget goal, you may not be able to hit the other goals such as ROI, cost per lead, or cost per click. Set these expectations with the client beforehand so you are not working on explaining why you hit the new budget but the rest of the metrics look odd when comparing performance from previous periods.
Tactics on Lowering the Spend
Below are the 4 tactics I used with my client when we wanted to lower spend without increasing our cost per lead. The client wanted fewer leads since their call center didn’t have enough to nurture their current leads but they did not want to eliminate leads completely.
Push Brand and Lower Funnel Keywords
When the budget is temporarily cut and you know you will get more month in the next month or so, spend the majority of your budget on brand keywords or lower funnel keywords. Brand keywords typically have a lower average cost per click while lower funnel keywords, the conversion rate is higher. This is not recommended to do long term since you are not fueling the top of the sales funnel and at some point, the lower funnel keywords won’t retain the same amount of traffic they did previously.
Stricter Ad Scheduling
Pull a report to analyze the time of day and day of week traffic of your campaigns. If there is a window of time during the day where you have higher conversions or whatever metric you consider a success, make sure your campaigns are running during that period. Typically I would increase my bids for the higher trafficked time but when you are trying to reduce the spend, you might consider setting up an ad schedule where the campaigns are only alive for portions of the day where you have seen success in the past.
Limiting the Geo Target
For my most recent account, I had to reduce spending, the location they focus on the most was California and they targeted another 20 states. The client is based in California and users are more familiar with their product so the service is easier for their sales team to work. We decided at this time, promoting their services to other states with less spend would be spreading the budget too thin. We picked the top 9 states besides California where people from those states have engaged with the client in the past. Once we have more money in our budget, we are going to reconsider adding back all of the original locations before our spending cut.
In an earlier tactic, I mentioned focusing on brand keywords and lower funnel keywords with a certain percentage of spend. This tactic is about pausing keywords that do not convert and spend. This is not my favorite tactic long term because you might be pausing keywords that are part of the user’s research stage which could cause the user to search for your name again. This will eliminate traffic and spend but you will need to keep notice on how these paused keywords are affecting your brand searches in the future.