Managing an AdWords budget: part 1
By alison ~ July 20th, 2009. Filed under: Advertising, Web.
Recently I was asked by someone to create and manage a Google AdWords account for her business. Excited by the prospect of finally getting to practice some of my media buying skills, I decided to give it a try. Establishing the account, choosing keywords and writing the ads were a piece of cake. Google really does a great job of automating most of this. The real trouble comes from managing the budget.
Google allows you to set a daily limit on your campaign spending, however this is more of an estimate than a flat number. If you set your budget to $10 per day for the campaign, and you’ve already hit $9.99 in clicks – Google will continue to show your ad until you reach your limit. So if you bid $1.50 on a keyword, you end up spending $11.49 for the day. It may not seem like much, but when you have a limited budget- it really makes a difference.
To complicate things a bit further, by default Google sets your content ads to auto-bid. This means that Google will automatically determine the cost-per-click to place your ad on a relevant Web site. While content ads are ideal, newbies should not use the auto-bid feature. I learned this the hard way. My daily budget was a measly $1.50 for a campaign. It worked out to about 5 clicks per day. I had set the keyword bids, but kept the auto-bid on for the content ads. The next day, I checked my report and saw that Google ended up blowing my entire daily budget on one content ad!
In theory the auto bidding for content ads makes sense. Content ads are worth more because they are displayed on relevant Web sites. You are more likely to convert that lead into a sale. However, my experience has taught me that this is not the best way to start out with AdWords. Clients want to see numbers, AdWords cost $X for X impressions. There is no way to calculate the impressions if you use auto-bidding. I believe content ads are great, but when it comes to cost – I prefer a fixed bid.
My work with AdWords is ongoing. Once my client’s Web site makeover is complete, I will be increasing the budget and hopefully bringing in a lot more traffic to her site. As I learn more about calculating that perfect budget, I will be sure to let you know. And remember, traffic means nothing if you don’t make sales! Make sure your Web site is the best it can be before you splurge on AdWords.
