Google Ads Budgets – Monthly Spend, Segmentation, and Impression Share
It’s difficult for many to wrap their head around the nuances and complications involved with managing Google Ads budgets. In this post, we’ll dive into what Google Ads budgets are as opposed to what you’d intuitively imagine they are, how we segment and prioritize budgets and how we manage monthly spend against an advertiser target.
Google Ads budgets are set only at the campaign level. Most campaigns and advertisers only have access to daily budget, but there have been monthly budget setting tests on both Google and Bing. That said, the vast majority of campaign budgets are daily budgets. Intuitively, you’d imagine that if you set your daily budget at $10, your campaign would spend $10 each day. The platform is significantly more complex than that.
Your daily spend may vary, and one thing that causes that could be the amount of traffic that’s available for the keywords you’ve decided to target. Other factors could include number of competitors for the same click, bid prices, budget caps and the google AI/Machine Learning choices that get made in the background. As described in this official Google Ads support article, your daily spend may vary by up to 2x your daily budget on any given day.
According to Google, this variation in spend is to help your campaign better achieve any goals you have set using a bid strategy. It also allows you to win more clicks on days when customer activity is higher. While your average daily spend may vary, there is a “monthly charging limit”. If your budget is static for a specific campaign for a full month, you will not be charged more than
The monthly spending limit is the maximum amount you can pay for a campaign over a month.
You can calculate it by multiplying the average daily budget you set, by the average number of days in a month, which is 30.4 (365 days in a year ÷ 12 months). If your campaign starts during a calendar month, we will only take into account the days the campaign was running.
For instance, if your average daily budget is set to $10, your monthly spending limit is going to be $10*30.4 = $304.
If you change your campaign budgets mid month, it gets more complicated.
Generally, you should segment your keywords into three, maybe four main categories.
- Product/Category Keywords
- Competitor Brands
- Advertiser Brand
If four category account
- Research intent product/service terms
- Purchase intent product/service terms
- Competitor Brands
- Advertiser Brand
We segment our client’s keywords into campaigns grouped as outlined above so we can adjust daily budget to maximize performance against the stated client goal. We encourage clients to set goals which align with a positive, long term ROI. We assign value to things like phone calls, lead forms and ecommerce purchases. We estimate these values using available data and adjust estimates as we collect more information. Most of our clients want to balance lead volume and cost per lead, achieve a specific ecommerce return on ad spend, or maximize top line revenue where customer lifetime value over campaign cost is positive.
Buy all the brand
We know brand traffic, especially advertiser core brand terms, is highly converting. Showing up in the #1 Ad spot as close to 100% of the time as is practical has many benefits.
- Highest return on ad spend
- Reduce accidental clicks to competitor’s websites
- Present special offers discounts
- Highlight premium and upsell options
By creating a dedicated brand campaign we make it possible to gain a very high impression share for brand. Here’s a recent example.
In this example we can see that the brand campaign has over 95% impression share, while the overall account impression share is 15%. This means that 95 out of 100 people who search these targeted keywords saw our ads for branded search. Only about 15% of the people who searched for this advertisers products and services saw the ads for the same period. By prioritizing brand budget, we ensure that existing customers don’t accidentally end up on the competitor website. This also helps maximize return on ad spend because brand conversions are always significantly lower cost than non brand.
As we move up the funnel to conquest and category keywords, a similar budget prioritization makes sense. Where conquest keywords deliver higher return on ad spend, budget can be prioritized into that category. By keeping an eye on your impression share at the campaign level, you can understand whether there is additional traffic available for your higher producing categories.
Thanks for checking out our explainer about how we approach daily budget strategically. If you’d like to explore a fit as a client, please book a call. If you’re looking for more content related to PPC management, check out the youtube channel.