I'd like to remind people how bad the "daily budget" is in AdWords.
The design of the budget system is in Google's favour, not yours, and if you don't understand that, you'll end up paying much more than you need to.
If you think setting the budget to half is a way to halve your ad spend and get half the number of clicks, you're right, but you're also naïve.
If Google thinks your current rate of spend is going to exceed the daily budget, they'll effectively deactivate your ad for random impressions, leading to less spend.
but that isn't the best strategy. The best strategy is to lower your bids to win fewer auctions if you want to spend less. That way, you can spend half as much, but get more ROI, since the Google AI will be only showing your ad to those most likely to be interested in it.
A double digit percentage of AdWords campaigns are budget limited on any given day. I honestly can't believe how tens of thousands of marketing folk can't notice how much money they're throwing down the drain by using the budget limiter...
I agree with the broader point of view, yet I'm not sure if all you say makes sense. Most campaigns are budget limited because auto bidding is less ops intensive and, above all, sometimes works better than manual bidding (despite Google reducing the reach as you get nearer the daily budget).
Manual bidding is always preferable with fewer data points (low conversions, low clicks, no previous campaigns).
Auto bidding is preferable as your GA accounts grow in conversions and the algorithms start to create a better profile of your customers.
On the counterpoint there are some accounts who perform bad in morning and good in evening so throttling makes a huge roi difference. Don't think we ever profiled it per customer but it wasn't an easy decision to throttle versus spend whole budget in 10 mins for the day from 12:01 to 12:11
But what you do when close competitors (ie: companies that are physically near, or that you even know their owner in person) start to "race" you? For example putting ever increasing budget limits in an attempt to make sure your ads are never shown?
> The best strategy is to lower your bids to win fewer auctions if you want to spend less.
IIRC, some of its major channels do it when the campaign's going to exceed its budget. Or you can simply use a maximize clicks/conversions bidding strategy.
The optimal strategy for most businesses is one that google doesn't offer...
Most businesses have some marginal cost of providing service to a user, and are therefore happy to pay any amount up to that cost to get a user. So in the Google Ad dashboard, that would be "Target CPA", but instead of setting an average cost per acquisition, it would set the maximum cost per acquisition.
Whats the difference you ask? Some users will come via a 'cheap' route - for example directly searching for your company name, and clicking the top ad, costing you very little because your quality score is very high, and then converting at a high rate.
Other users will come via an expensive route - searching for a tangentially related keyword, unlikley to click through, and also unlikely to convert when they have clicked through.
You only want the guy from the expensive route if he, and all the others like him, cost less than your companies marginal cost of providing service. You don't want to include the guy who directly searched for your company name in the average when making that decision.
Why doesn't Google offer this? It would significantly cut down on overspend in the ad world (ie. spending more to get some customers than they are worth), and in turn significantly hurt their revenue and the internet as a whole.
3rd parties that use Googles RTB API can offer this though, although they are at a disadvantage of having a lot less private user data for targeting...
The design of the budget system is in Google's favour, not yours, and if you don't understand that, you'll end up paying much more than you need to.
If you think setting the budget to half is a way to halve your ad spend and get half the number of clicks, you're right, but you're also naïve.
If Google thinks your current rate of spend is going to exceed the daily budget, they'll effectively deactivate your ad for random impressions, leading to less spend.
but that isn't the best strategy. The best strategy is to lower your bids to win fewer auctions if you want to spend less. That way, you can spend half as much, but get more ROI, since the Google AI will be only showing your ad to those most likely to be interested in it.