Hitting Budget in AdWords? Try These Optimization Tips
September 11, 2018
September 11, 2018
Hey everybody. This is Adam with ParaCore and today’s video I wanna talk about optimizing an AdWords account when it’s already doing okay. So one thing that happens when we take over accounts at ParaCore, is we spend a pretty decent amount of time the first two to maybe four or six months, getting the campaign in a good position and getting it to a performing position. So, a lot of times what’ll happen is at six months or so, we get to this point where the Cost per Lead is strong, we’re hitting budget, and we’re like alright now what do we do next? Like how do we optimize this account? And in some instances, I’ve had this conversation enough times where I want to create a video about it because I’m sure we’re not the only ones that have this issue where you get an account to a point, it’s like alright well now what are we gonna do?
Alright, so what I want to do is I want to set the stage for this environment, for this scenario because there are very specific types of situations where you’d take specific types of actions, alright? So very point I want to make is that your campaign is hitting budget. So let’s say that your budget is $200 a day, you’re a plumber in the Phoenix area, and you’re hitting budget, okay? So, let’s start with that. Kay, so we have $200 a day and you’re hitting budget. So that’s like your spend, okay? So $200 a day, that represents, you know, what you’re hitting or what you’re spending every single day. And let’s say that you’re getting $100 clicks a day. It’s doing well, it’s $2 a click but you’re getting 100 clicks a day, okay? So, you have 100 clicks a day and that’s just kind of, you know, that’s basically what’s happening there. So 100 clicks per day and a $200 spend. And your conversion rate is, let’s say that it’s 10%. Right? So, 10% conversion rate. So you’re getting 10 leads per day. Alright, so that’s a pretty good account. I mean, if you’re a plumber and you’re getting 10 leads a day for $200 in spend, that’s $20 Cost per Lead, that’s really strong. So as an account manager, you might be like alright, what do I do now? How do I improve this campaign, it’s already doing really well? And so, what a couple of the different tactics that are options and that I hear sometimes. I sometimes hear, I’m gonna create new ads because I want to increase the Cost per Click. Alright, so that kinda makes sense. I’m just gonna put that down here and we’re gonna talk about ads.
Alright. And then or excuse me, click through is what I meant. Click the Rate I think I said Cost per Click. So we’re gonna increase the Click the Rate, okay? And so, alright I get that. Another thing I hear is I’m gonna increase the bids because increase bid means a higher on the page and we’re gonna increase the bids and get higher on the page because that’ll increase the performance. So we’re gonna talk about increasing bids, okay.
And so, okay good. And then, one other thing to point out in this scenario, is because we’re hitting budget we don’t have 100% search impression share. So let’s say that search impression share is, let’s just say it’s 50%. Search impression share is 50%, okay. Alright now, let’s talk through a couple of these different options, alright. So we have I’m gonna rewrite new ads because I wanna improve the Click through rate. Alright so, let’s just talk about that for a second. If you take your existing ads and you rewrite them, you improve the ads and you increase the click through rate. What is the possible outcome? The possible outcome is that you get a higher click through rate and unless it decreases the cost per click, and in many cases, it won’t to a dramatic extent. You’re still gonna get 100 clicks. You’re not gonna get any more than that, okay? So, you’re just gonna get there faster, right? So, if you have a 1% click through rate, and the ad is showed 100 times. And you get one click, that’s one click. It’s $2 a click. If you have a 50% click through rate, so the ad shown twice and you get one click, that’s still one click. You’re still gonna get 100 clicks for $2 a click.
So that’s actually not gonna change the performance of the campaign at all in any way, because you’re just gonna get there faster. So, I would say increasing ads, excuse me, improving ads and increasing the click through rate is not a strategy that I would employ here because it’s not gonna help anything, right? So what I’ll do is I’ll put leads up here too. Just so that we can see what this looks like. So let’s just say that we got 10 leads going through. Sorry I didn’t plan out my board before this conversation, so it’s getting a little gnarly. Well let’s just say we have 10 leads coming through and you’re still gonna get 100 clicks, so there’s nothing to do there. Alright, so now we’re talking about increasing bids, okay? So if you increase a bid, because you wanna get higher on the page. Let’s say your average page position right now is maybe three. What that’s gonna do is, it’s actually going to increase your Cost per Click and it’s gonna reduce the number of clicks that you get.
Alright? That’s not a good thing because now for the same budget, you’re getting fewer clicks because your bid is higher. So where before you were getting a $2 Cost per Click and you got 100 clicks, and you’re converting it 10% so you were getting 10 leads per day. Now, if you increase the bid to get higher on the page, let’s say that it decreases by 20%. Now you’re getting this number of clicks, you’re getting 80 and you haven’t changed your landing page, right? Because we’re not talking about the landing page. You’re still gonna convert it 10%. There’s no reason that conversion rate would change. And so, now you’re gonna get eight leads per day. So you’ve had a negative impact on the campaign. So it doesn’t matter what position you’re in. You could be in position one, two, three, four, 10, 37. It doesn’t matter what position you’re in, as long as you’re hitting budget. And so what we’ll often do is we like lower bids to keep going down, to keep decreasing the Cost per Lead, alright? So increasing bids is certainly not gonna help.
Another one that I hear, which I should’ve mentioned before, is adding keywords. Kay, so adding keywords is something that you know, seems like, hey I’m gonna expand the breadth of the campaign but again we don’t have a traffic problem. There is not a traffic problem with this campaign. There’s actually not like a major problem with this campaign in general but could the campaign be better and that’s what we’re trying to figure out. So by adding more keywords, making them more broad, you’re increasing the overall impression share world, environment for this campaign. But you’re still gonna get 100 clicks and you’re still gonna convert it 10% and you’re still gonna get 10 leads per day. So adding keywords doesn’t do anything, don’t do that.
Alright now, so you might be asking what should you do. Alright so, I mentioned that increasing bids won’t help anything right? Now what we wanna do is, and I wanted to do a visual with this. I’m going to create a new video at some point in the future with a visual. If you think about a click as a rock, okay? And let’s say that the rocks this big and you have a bucket. And in this case, you have a bucket that holds 100 rocks. Okay? And they all fit in there and it goes to the top and then you’re full and you can’t put in anymore. So that’s basically your budget is the bucket, $200. The rocks are the clicks. You can fit 100 rocks in the bucket and then you’re full. So how do you get more rocks in the bucket? How do you get more clicks in your campaign? And you only really have two ways to do that. One, is that you can get a bigger bucket, right? So that’s increasing your budget, that’s certainly an option. A lot of times, clients don’t wanna do that. For whatever reason they don’t feel like it’s the right thing to do, so they may not do that.
The second thing is, you can decrease the size of the rocks and so that means you’re gonna decrease the cost per click. And in a campaign like this, there’s two ways that we like to do that, from a manual perspective. The first one is simply manually decreasing the Cost per Click and so let’s say that, excuse me, not the cost but the bid. So let’s say that your bid is $2, ’cause that’s what you’re paying and so what I might do if the search impression share’s 50% I might decrease that bid to $1.50. And so, what happens when you decrease the bid to $1.50? I can’t do the math in my head, but your Cost per Click is gonna go down to let’s say $1.50. And then you have an additional $50 because 100 clicks is now an additional $50 to get something like 37 more clicks or whatever it is. I think that’s the math. So now, you have 137 clicks coming through, okay? You still have the $200 budget. You have 137 clicks coming through. You still have the 10% conversion rate, that didn’t change. Again, we’re not messing with the landing page. And so now you’ve got 13 leads in the same day, maybe 14, for the same budget. So you’ve improved the performance of the campaign by 30%. So when you decrease the bids that’s the type of impact. Now that can be a manual thing. So what I typically tend to do, is I will decrease the bids every two to three days to see when my campaign stops spending $200, ‘kay? So if I keep decreasing, I’m gonna go $1.50, $1.40, $1.30, $1.20 and once the campaign’s like only spending $170, $180, $170, $180 and it’s hovering under my $200 mark, then I know I’ve hit a threshold and then I bump it back up to let’s just say it ends up being $1.30 and then $1.30 is basically my threshold for this budget and I know that if I decrease the bid anymore, I’m gonna underspend. And if I increase the bid then I can get more clicks. But if I increase the budget, nothings gonna change because I basically maxed out the Cost per Click at this budget, alright?
The one way to do this automatically, which is a little bit faster, is to use Google’s maximize click setting in the campaign. And so, what maximize click does is it goes to that entire process and does that for you and it’s amazing. It’s really a powerful setting in AdWords that we found can increase performance by 30, 40, 50% just by hitting that. But the key, the absolute key that you cannot forget with maximize clicks, your search impression share has to be under 100 and you have to be hitting budget. If your search impression share’s 100%. So let’s say you’re spending $200 a day, you’re at 100% search impression share, and let’s say your budget is $500 a day, okay? So you want to spend $500 but this performance. If you do maximize clicks and you’re under your spend budget, it will spike your Cost per Click by two, 300% and it will destroy your campaign. So you do not wanna do that. However, what we’ve done with some accounts is we’ve actually taken an account like that and we’ve dropped the budget to 25% below what we were spending and then it hit maximize Cost per Click, maximize clicks and it automatically reduces the Cost per Lead dramatically and reduces the Cost per Click, it optimizes the entire campaign for you. So it goes through that entire process that I was just talking about and I don’t know if that’s how it does it, but that’s basically what it does. Where it’s decreasing the bids and it doesn’t matter what your position is. They’re basically saying, get the most number of clicks. And assuming that your conversion rate stays the same, which it almost always will, then you’re in good shape.
So that’s how I recommend, that’s how I approach optimizing a campaign when it’s performing well. There are a couple of criteria for this. It’s performing well, you’re search impression share has to be under 100%. If it’s 100% you do not wanna use this method because it’ll increase your bids. And actually the search impression share is the one major, major, major piece. Where you’re hitting budget and you can get more traffic in the same budget.
So check it out and give it a shot. Leave a comment or question below. I wanna hear if it worked for you, because this is something that I’ve seen work really well and if it doesn’t work for you then I’d be really curious to hear about that and why, maybe learn a little bit more. So thanks for watching and my name is Adam with ParaCore. I’m wearing my CallRail shirt, which is our call tracking software. So do not be confused, I’m not with CallRail but we love CallRail and if you have any comments or questions, please leave them below as usual, comment or like the video and thanks for watching. Subscribe or like the video. Not comment or like the video. Sometimes I talk too fast. Thanks for watching.
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