Lately I’ve been hearing some horror stories related to Adwords PPC budget management. While spending under budget can sacrifice some opportunities, severe overages can be devastating to the advertiser.

To set a proper budget strategy, first let’s examine how AdWords and Bing Ads budgets work. 

Campaign Budgets

This sets a total maximum dollar amount for all keywords for the amount the advertiser wants to spend. In AdWords, this is the average per day. The “average” means that on days where there is more search volume, Google can over deliver and incur costs of up to +20 percent of the budget cap. There is an option to set a monthly budget in AdWords. To do this, you can either pre-pay each month from a credit card or get a monthly invoice.

For Bing Ads, caps can be set daily or monthly. In the monthly setting, ads are shown as quickly as appropriate, so the advertiser may run out of money before the end of the month. With both platforms, once the budget has been depleted, the ads will stop running.  

Shared Budgets

AdWords sets a cap for several campaigns grouped together, which is appropriate for campaigns with similar searcher intent and similar volume size. There is not a specific priority among keywords. 


Common Scenarios and Adwords Budget Approach

Starting Up

Advertisers often want to know how to set up initial budgets. At first, this requires some basic steps:

  1. Total budget / 30 days in a month = daily budget 
  2. Divide the daily budget by the number of campaigns or organizational goals. 
  3. Once data is gathered, adjust each campaign’s budget to allocate more by the metric that is most important – for example, ROI or click traffic. 
  4. Be sure to pause or greatly reduce low performers, and redistribute that to the top performers.

Maximizing Budgets

Assuming the account is effectively running, some advertisers will want to maximize budgets to capture as much opportunity as possible.

  1. Set budgets higher as applicable on priority campaigns. 
  2. Review AdWords, and Bing Ads bid and budget tools to explore performance estimates. Check to see if the recommendations make sense and can roll out efficiently. 
  3. Use Accelerated Serving, but watch for ads ending too soon in the day or that don’t have enough high-volume keywords dominating the budget. 
  4. Use Broad Match or Modified Broad Match on keywords, and control relevancy through use of negative keywords.

Containing Budgets

Given a lower budget, there are ways a budget can be micro-tuned to make the most of it.

  1. Set budget to serve to Standard, which will serve ads evenly over time. 
  2. Use data to determine the best time of the day or days of the week to run ads, and use ad schedules or bid modifiers to control spend. 
  3. Use data to analyze performance by geography. Adjust geo-targeting and use bid modifiers to control spend.

PPC budgeting can be challenging for some advertisers, but approaching budgets with several different tools can help take control.

What are your favorite tips? Tell us in the comments.

This post, Paid Search Budgeting Tips: Avoiding Budget Horror Stories, was first published on SearchEngineWatch.