How to set perfect budgets for your Google Ads PPC campaigns

How to set perfect budgets for your Google Ads PPC campaigns

Whether you’re relatively new to Google Ads PPC or haven’t had much success, it’s always a good idea to look back at your campaigns to see what went wrong or what could have improved. Google gives you access to a huge amount of data and information so that you can make informed decisions, but it’s still complicated to think about factors such as the perfect budget for your business.

A lot of people ask how high they should set the initial AdWords budget and when they should lower or increase it. However, the reality is that it depends on a number of different factors. Coming up with the perfect AdWords budget allocation is challenging for a number of different reasons.

We have put together some useful information that will help you set the perfect budget for your Google ads PPC campaigns.

Multiple Campaigns Makes it Exponentially Harder

One of the earliest and most important things to remember is that running multiple campaigns makes it far more difficult. Most people set AdWords budgets to a single campaign, but it can get complicated especially when advertisers have multiple campaigns. As such, we believe that it’s important to first divide your campaign into three different categories; mobile searches, remarketing and Google searches.

With these three categories in mind, you might be able to see just how difficult it would be to allocate your PPC budget. These are all fantastic choices for growing your business, but if you’re working with a limited amount of money for an advertising budget, then you’ll need to restrict your choices and severely limit your investment. With that said, having some advertising budget leftover isn’t necessarily a bad thing unless you’ve been asked to spend an exact amount. It’s also completely possible to have some money left over so that you can invest in a category that makes more sense at the time.

Shared Budgets in AdWords

One of the ways to overcome the difficulty in this decision is to consider using shared budgets, a feature of AdWords. Instead of assigning a set budget to each of the categories, you can assign a single budget that is shared by multiple campaigns in your AdWords account. This means that it’s much easier to predict how much you’ll be spending to meet your marketing objectives. You also won’t need to worry about distributing it evenly or using it only on specific advertising categories.

While it may sound complicated, setting up shared budgets in AdWords is actually very straightforward. But first, it’s important to understand how they actually work under the hood.

To start, we need to set an example to make it easier to understand. Let’s imagine that you’re operating a business that is currently running three campaigns for a product. You categorise the campaigns into desktop searches, remarketing and also mobile search. If you set a marketing budget of $100 per day across all of your campaigns, then it might initially seem challenging if you have to pick how much budget each one gets. Fortunately, shared budgets can alleviate this problem.

With shared budgets, the categories will each receive budget adjustments depending on a number of different factors that use data collected from Google. This means that you’re getting access to a lot of different sources of information which are being used to make smarter decisions for your PPC campaigns. This is perfect for people that are relatively new to advertising campaigns and aren’t sure how much to spend for PPC, or for people that don’t want to stress over how much they spend on multiple campaigns.

Alternatively, if what you’re focused on is increasing engagement and conversions, then you might not necessarily care how much you split your budget as long as it gives you the best results. In a situation like this, using a smart budget can be a way to relieve the personal stress and responsibilities of managing and tweaking the budget so that you can focus on creating a better product.

Is Using a Shared Budget Worth It?

One of the most common questions that we see is; is a shared budget actually worth it? After all, you’re letting Google control your advertising budget and what it’s being spent on, so it might seem like it can easily be abused. And it also begs the question; who wins here? Does Google get the most benefit from this, or do the advertisers get a more efficient system that helps them draw in wider audiences?

The answer is easy; nobody knows.

Unless you use a shared budget and report on your own findings, it’s basically impossible to tell if Google has advertisers in their interests or if they’re more focused on draining every bit of money from your advertising budget while offering minimal gains. More realistically, it’s probably a balance of both.

For instance, nobody knows when the “shared” budget actually starts to take effect. If the budget is being shared between two vastly different campaigns, then it may lead to doubts whether the shared budget system even works or not. A fast campaign could generate a lot of impressions, but rarely any conversions. However, the metric that the shared budget uses to determine where to assign the budget could be largely determined by impressions and activity. This means that it could ultimately end up throwing money into a campaign that isn’t actually giving you much real benefit.

While shared budgets offer people a way to slowly introduce themselves to the world of AdWords, it’s probably not a long-term solution that you should rely on. It’s something that can help you get started if you’re a relatively new startup, but you want to rely on your own information, data and audiences to help you decide how you spend your AdWords budget. There’s not really a “perfect” budget as it changes depending on your business’s circumstances, so we definitely recommend that eventually grow out of using shared budgets and start tweaking the values on your own.

To take your online learning a step further, contact us regarding one to one mentoring or visit the Digital24 Facebook page for upcoming events and workshops. 

If you want to get booked in for a 1:1 session with one of our experts – please email hello@digitaltwentyfour.com