Don't Use the PPC Budget Tool

Here’s a statement that might shock some PPC managers:

If it is an appropriate time of the day for your ads to show, you never want them to be shut off because your account has hit its budget. If this is happening, you are not spending your money as wisely as you could be.

Let me say that another way: you don’t want your campaigns to hit their daily budget.

Now you’re thinking questions like…”Huh, don’t I want to spend my money to get visitors to my website? Isn’t that the point of PPC advertising?  If I don’t have a budget, how do I keep from spending too much?”  The short answer is bid less.  Let me explain the longer answer with a very general description.

If you’re spending $2 per click and your daily budget is $200, then the most clicks you can get is 100.  After you hit 100 clicks, your ads are turned off and don’t show the rest of the day.  This means your ad is not collecting as many clicks as it could be. Since you undoubtedly have to be on some kind of budget, you don’t want to just let your ads run and spend out of control without considering ROI. Instead, you want to control your spending with your bids.

If you lower your bid to say $1.50, then you could theoretically get 133 clicks before your ads are turned off.  If you are still hitting your budget, lower your bids again.  If you spend $1.00, you could get 200 clicks before your ads are turned off, and so on…

What you want to do is find the sweet spot where you are spending just under your daily budget on a consistent basis.  This is the spot where you will get the most clicks for your budget.

With this simple experimentation method, you’ll find the spot where you can gain the most visitors for your money given your account performance and you’ll never need a Budget Tool again.  And of course, the more visitors you get for your money, the more conversions for your business.

Then, you can look at your ROI over time and decide what to do with your bids to maximize profit.