The whole purpose of economics is balancing our infinite wants with the limited resources we have available. This is a fundamental issue in PPC management, and at some point you’re going to login to your Adwords account and see the following:

Hitting Your PPC Budget

If you’re hitting your budget then you should take action, because when your budget is reached your ads will stop showing. You can use the Adwords system to optimise for clicks to try and achieve as many clicks as possible for a particular budget, but for full control, insight and to ensure it’s done correctly, you’ll want to do this yourself.


Increase Your Budget?

While Google does tend to give fairly good advice on how to get the most from your PPC campaign, one of the areas where they’re totally selfish is when you’re hitting budget. The Adwords system will automatically encourage you to increase your budget, and if the budget simulator is available for your campaign, Adwords will even display a pretty graph showing all those extra clicks you could get by approving a budget increase.
However, this isn’t always the best thing to do, and it’s rarely the first thing you should do.


Reduce Your Cost-Per-Click

By reducing your bids, and therefore lowering the amount you pay for each click, you’ll naturally move away from hitting your budget.
As you reduce your bids, you’ll begin to squeeze more clicks out of your budget. For example, paying 10p per click with a budget of £10 will get you 100 clicks, but reducing your click cost to 8p will get you an extra 25 clicks.
At the same time, reducing your cost per click will also reduce your ad position, and so you have to play a careful balancing game. On the one hand you want to pay less per click, but on the other you need to maintain a click through rate that means you’re actually getting extra clicks and still making the most of your budget. We all know that lower ad positions means lower click through rate, so make changes carefully and slowly.
Taking a look at the bid simulator for any keyword or ad group will help you make more informed decisions.

keyword bid simulator

Do bear in mind that once again, Google can be a bit biased and suggest that a lower bid will always result in fewer clicks, but they don’t take into account budget constraints when presenting these figures. Add in a budget cap and you will find that in a lot of cases, carefully reducing the bid will actually get more clicks. The graph in the bid simulator can be helpful to show an estimation of the way click numbers will behave with different budgets.

– Position 1 is best for Organic SEO, position 1 is not always best for PPC

– Studies have shown that the conversion rate does not change based on an ads position
It’s important to spend some time balancing your click cost and click through rate to achieve an optimum bid for each ad group or keyword. Your target should be to spend as little as possible per click but still use up your daily budget. If your campaign hits your daily budget at 23:59 each day, then you’ve got it spot on.
Now You Can Increase Your Budget

Once you’ve got a well oiled campaign that’s running consistently, and generating a positive return on investment, now is the time to turn things up a notch. You’ll have your old click cost data saved in your account, so analyse this and work out what’s the maximum that you’re willing to spend per click (based on your conversion data). Then begin gradually adjusting your bids to reach this level and increase your budget to a comfortable level. Then it’s time to repeat, optimise your bids to make the most of this new budget while keeping an eye on ROI.
The first stage is always to optimise and make the most of your current budget to find out how things are working with that campaign, what the search-intent is for those keywords, and find out how the traffic is performing on site. Then it’s time to increase the budget based on that feedback.
Whether you’re on a really tight PPC budget or you’ve got cash to burn, you’ll perform far better by optimising clicks to each budget level. Every business has a budget, and making the most of it means using it wisely.
Polaris Agency is one of the leading PPC agencies in Kent and is the only agency in the county to have a full Google Adwords accreditation. For more information please give us a call or get in touch.

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