When PPC Budgeting Goes Wrong

Having campaign budgets in your PPC accounts is a good thing. You can keep your spending in check and ensure that your advertising budget doesn’t go totally haywire. You can even target your spending so that certain products or verticals get a certain percentage of your budget, keeping your ad dollars allotted to the avenues that will make you money. But, since every PPC campaign has different content and goals, there’s no set formula for how to make the right budget. This means that sometimes budgeting can go awry.

I had an incident this week that reminded me of this fact. I added a new ad group to an existing campaign. This is usually a pretty innocuous change, but I didn’t count on how popular this ad group would be. I was pretty excited when I saw that campaign’s conversions double. Unfortunately, so did our CPA. In fact, this ad group drove so much traffic that it affected the overall conversion rate for the entire account.

Another consequence was that this new ad group was so popular that it sucked up all the impression share for the campaign that it was in. Since so many people were searching for the keywords in the ad group and clicking on our ads, we blew through the campaign budget pretty quickly. This meant that the new ad group was getting all of the campaign’s budget dollars and conversions (at a pretty expensive CPA, I might ad), and the rest of the ad groups didn’t even get a chance to show up. Ad groups that were converting at a pretty good rate last month had zero conversions month-to-date because they were being crowded out of ad display by the new ad group. This was leaving potential conversions on the table, which is never a good thing in PPC.

In a situation like this, there’s an easy solution: just separate the problem ad group into its own campaign, and give it it’s own budget to spend. There’s nothing wrong with having multiple ad groups in the same campaign, but if an ad group turns out to me extremely popular, it’s best to isolate it so that it doesn’t soak up budget dollars that could be going elsewhere. The toughest part is figuring out that there’s a problem in the first place. You may never know if a certain ad group is getting a disproportionate share of your budget unless you scrutinize each campaign at the ad group level.

So be careful out there. You might be spending too much money in an ad group at this very moment and you wouldn’t even know about it. This is yet another example of how pay per click marketers must be ever vigilant in our accounts. Follow the money, and make sure certain ad groups aren’t getting too much of it.

About Shawn Livengood

Shawn Livengood is a search engine marketing professional based in Austin, Texas. He has extensive experience managing pay-per-click ad campaigns for clients in various industries, from small home-based businesses to large international companies. You can connect with Shawn on Google+.
This entry was posted in PPC Basics and tagged . Bookmark the permalink.

Comments are closed.