Is Your Adwords Campaign “Limited by Budget?”

One of the first things I notice when I audit PPC accounts are campaigns that are “Limited by Budget.”  It’s hard to ignore it when Google is telling you to increase the budget cap because you “may be losing clicks due to a limited budget”.  The simple fix is to just increase the budget cap until the notice goes away, but the reality is majority of advertisers don’t have unlimited budgets. When I see the notice below it tells me that the advertiser is bidding too aggressively and paying too much per click.

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Many advertisers ignore this notice mostly because of the reason I pointed out above, companies don’t have unlimited budgets. So what can we do to get additional clicks without increasing the budget cap?

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Assuming you have set budgets, the simplest thing to do is to decrease your overall keyword bid & ad position.  The point here being we don’t need to be in the top ad positions and pay premium dollars if we can get those same clicks in a lower ad position at a cheaper cost.  Remember, customer quality and intent doesn’t change no matter what ad position you are in, all ads are showing up for the exact same search query every time someone performs a search.  If we can get cheaper clicks in a lower ad position you will naturally increase your overall click volume with your given budget. Would you rather pay $0.25 CPC in ad position 4 and get 4 clicks for a dollar, or $1 in ad position 1 and get 1 click for that same dollar?

From an implementation point I like to work in small increments over several days.  Day 1 I will start by decreasing keyword bids by roughly 10%, especially high CPA & non-converting keywords. I will repeat this process working with different percentage increments until I am just hitting the daily budget cap. You should start seeing increases in overall click volume, and in return more conversions at a lower CPA as your budget is spent more efficiently. Once I get to this point is when I will start looking at more granular optimization points like ad scheduling, device performance, match types and the list goes on to further optimize campaigns. This is a very simple step that I see many advertisers overlook that can be fixed easily and quickly.

At the end of the day when you see “Limited by Budget” what Google really means is they are losing out on additional ad revenue. It’s simple, you spend more and Google makes more.  I don’t think Google still understands that companies don’t have unlimited budgets, ROI matters and the point of diminishing returns.