Anyone who’s ever done strength training knows the challenge of overcoming a plateau. Once your body gets used to a certain regimen, it’s important to scale up your activity level — but without hurting yourself by doing too much too soon.
The same logic applies to scaling your PPC budget.
When your account is already performing well and receives a significant financial boost (like the one many brands will experience as we come out of the COVID-19 pandemic), it can be difficult to spend more while maintaining the same level of ROAS or CPA.
While it’s fairly simple, it certainly isn’t easy.
With that being said, here are some tips to help you to take greater control of your PPC budget without compromising on ROAS and CPA goals.
Manage your budgets better
If it sounds straightforward, that’s because it is. Effective budget scaling begins with making your marketing dollars work more efficiently, and a better understanding of where your account is experiencing the greatest returns and wastage.
Fortunately, Optmyzr gives you the tools to get where you need to go.
Optmyzr’s Spend Projection tool uses historical data to predict future spend.
Spend Projection: This insight from Optmyzr predicts your account’s likely spend by the end of the selected time period (user guide).
Optimize Budget: Use this tool to identify budgets and campaigns losing impression share due to budget and optimize them to maximize ROAS (user guide).
Budget Simulator: Found as a feature in the Optimize Budget tool, this gives you intelligent suggestions for budget reallocation, including daily budgets. It tells you how much budget a campaign or shared budget can actually spend. This recommendation is based on years of historical spend analysis and current spend patterns.
If your current campaign setup and traffic don’t exhaust your budget, there are additional steps you can take.
Grow your account
Given the way your current campaigns are set up, you may not have significant opportunity to grow your account traffic. In this case, you’ll need to grow your account.
You can achieve this with a two-pronged approach.
1. Hone more keyword opportunities
Reviewing search terms with good performance can open up a world of possibilities that you may have neglected or been unaware of. Optmyzr lets you do this with a number of one-click optimizations.
Find search queries with conversions and high CTR using the Keyword Lasso tool. Add them as new keywords, or create entirely new ad groups.
Create and automate custom strategies to manage search queries using the Rule Engine (work with Google Microsoft, and Amazon advertising accounts).
The Rule Engine allows you to add keywords based on queries that are driving conversions or that have a better CTR than the associated keyword, or to add keywords of another match type.
Use the Keyword Lasso tool to discover new opportunities to fully utilize your budget.
2. Promote existing keywords, ad groups and campaigns
Sometimes, it’s not a question of looking for new opportunities, but optimizing the ones you’re already capitalizing on to yield better results. We can help you take performing campaigns up a notch without needing to do the heavy lifting yourself.
Use the Conversion Grabber to increase bids for converting keywords losing impression share due to ad rank.
The Optimize Target ROAS and CPA tool allows you to tweak target ROAS and CPA values at ad group level for ad groups losing Impression Share due to ad rank.
Apply bid adjustments based on time, location, gender, and audience to maximize campaign performance and better utilize available budgets.
The Optimize Target CPA & ROAS tool helps increase conversions with automated bidding.
The importance of risk mitigation
At Optmyzr, we believe risk mitigation is a vital component of any evolving PPC strategy. So while you explore these options to expand your account and promote existing inventory, be sure to have a safety net in place.
Acquire a list of expensive keywords or product groups, and update it on a regular basis. Keep an eye on these so they don’t accrue unnecessary cost, raising CPA and reducing ROAS.
Automate the process of adding negative keywords to search or shopping campaigns in order to limit clicks that don’t convert. Use the Non-Converting Search Queries strategy in the Rule Engine.
Maintain and monitor ROAS performance
Once you have the different pieces in place, it’s important to keep a regular eye on things. As humans, we can provide context that machines don’t have and increase the chances of a favorable outcome.
Alerts and budget tracking on the MCC dashboard will drop notifications if the performance for a metric falls below target — or even if it starts trending in the wrong direction.
When running a manual bidding strategy, establish and track target ROAS for keywords using the Rule Engine. If you prefer to use automated bidding, this piece by Optmyzr and Google might offer more relevant insights.
Conclusion
PPC strategy is never as easy as we’d like it to be, and challenges like the ongoing pandemic add variables that can affect performance overnight.
At a time when current data is volatile and historical data is unreliable, this ‘human context’ is more critical than ever to getting the most out of machine learning.
By regularly checking in on your automations, you’ll be able to exert greater influence over how and where your marketing dollars are channeled, giving you a better chance of seeing the results your brand is looking for.
AdWords announced a major change to how overdelivery will work with daily budgets. As of October 4th, overdelivery will be capped at 100% of the daily budget rather than 20%.
This means that you could now be on the hook for double your daily budget rather than 120%.
Overall this is a reasonable change from Google’s end because it helps them better achieve a target monthly budget which is what most advertisers have in mind. Few businesses are operated with daily budgets of any kind. Monthly, quarterly, or annual budgets are much more common. So what typically happens is that a business budget is divided by the number of days in the period to derive the daily budget that AdWords needs.
In the case of a monthly budget target, simply divide the amount by 30.4 to get the daily budget. Why 30.4? Because a typical year has 365 days and divided by 12 months that’s 30.41666…
You might wonder why Google doesn’t simply have a monthly budget in the first place. Several reasons:
1. Some campaigns are flighted and have a set start and end date. For example, a campaign to promote a new movie usually doesn’t start on the 1st and end on the last of the month.
2. One of the big selling points of AdWords is that you can always change your mind. So if an advertiser finds the results aren’t what they expected, they can terminate a campaign on any day. It’s better in this case that they are only on the hook for the number of days a campaign ran rather than the monthly equivalent.
Daily budgets are good for more control
PPC experts clamor for more control. When Google changed how exact match works (by allowing word order to be different and function words to be included or excluded) or when Google removed bid adjustments for tablets (which have since returned), agencies and other professional account managers bemoaned the loss of granular controls.
With daily budgets, Google is actually providing a more granular way to control things than if they had monthly budgets so we should not ask Google to replace daily budgets with monthly budgets. Rather we need to understand how to use the granular controls they’ve given us to achieve the goals set by clients.
The way overdelivery works just introduces a new challenge but it should not come as a total shock since overdelivery has been around for as long as AdWords (in its current CPC form) has existed.
A Primer on Overdelivery
Overdelivery exists in AdWords to give the ad serving system the flexibility to spend different amounts based on the available opportunity. If you look at your costs for different days of the week, you’ll notice that for most campaigns there is a day of week fluctuation. This could be due to search patterns in your industry, or simply because fewer searches are done during the weekend than during the week.
Overdelivery prior to October 4, 2017 was limited to 120% of the daily budget. Two things happen when Google processes an advertiser’s charges:
1. The maximum daily bill can be no higher than 120% of the daily budget
2. The maximum monthly bill can be no higher than 30.4 times the daily budget
Any amounts in excess of either rule are returned to the advertiser and will appear as an overdelivery credit. Note that this is not a situation where Google charges you the higher of two numbers – both conditions are mutually exclusive. For example, it is possible to get a daily overdelivery credit even if the monthly bill is less than 30.4 times the daily budget.
An example for an advertiser with a $100 daily budget:
Here we have a month that contains 30 days. Let’s look at week 1. During this week, even though Google accrued costs above the daily budget on the first 3 days, they only overdelivered $50. The last 3 days of that week, there weren’t many searches and they underdelivered by $80. For that week, they spent $30 below the advertiser’s target.
In weeks 2 through 5, they overdelivered $35 on Monday and Tuesday and for each of those weeks, that put them right on the mark. However they were not allowed to charge more than $120 on any given day, so the advertiser still gets a $30 credit every week: $15 for Monday and $15 for Tuesday.
For the entire month, they accrued clicks worth $3040 but can only bill $2920, $80 below what the advertiser wanted.
After October 4, 2017, overdelivery can now bill up to twice the daily budget on any day. So it now has these restrictions:
The maximum daily bill can be no higher than 200% of the daily budget
The maximum monthly bill can be no higher than 30.4 times the daily budget
In the same example as the table above, Google would no longer have to issue an overdelivery credit for daily overages since they never went above $200 on any day. They would also be right on target for the monthly rule of $100 * 30.4 = $3040 for the month.
This is a reasonable thing for advertisers because they are now spending what they implicitly told Google their goal was.
Wait, aren’t advertisers now paying more for the same?
In both scenarios laid out above, advertisers got the same traffic, but before Oct 4th they paid $120 less than they would now. Clearly, that is a bad thing. However, Google doesn’t like to give away clicks for free when there are other advertisers willing to pay for those clicks so they’d gotten really good at staying within the 20% daily overdelivery cap so in reality, few advertisers were seeing these credits. They used to be common 10 years ago, but not recently.
One way Google got really good at preventing overdelivery was by becoming really conservative when serving ads when a budget might be almost depleted. Because there is some delay between when a click happens (and becomes billable) and when the ad serving system knows that this new click has been charged towards a budget, Google slows down ad serving once advertisers come close to their budget. By being conservative, Google hopes that all the billed clicks are known to the serving system before more ads are served. This has generally resulted in a rule-of-thumb guideline that a budget should be at least 10 times the amount of the highest CPC bid within that budget. In other words, a lawyer bidding $100 per click would need at least a $1000 daily budget to get their ads to show with reasonable confidence.
This is really the simplest case and you don’t need to change anything you do. Google will continue to do its best to reach 30.4 times your daily budget. If they were not able to meet the target in the past because your ads were turned off on weekends, or because there just wasn’t much volume on some days of the week, they may now start to serve more ads on the days with more available volume to make up for the lower days. This makes it more likely they will fully spend your budget.
If you shift budgets around during the month
Budgets don’t exist in a vacuum. Usually, you’ll have more than 1 budget for an advertiser. A simple example: one budget to sell used cars, another to sell new cars. As the month goes on, used inventory may increase and you may want to allocate a bigger portion of the overall budget to it. When you make a budget change in the middle of a month, Google only has to credit back any amounts above twice the daily budget. While it is unlikely to happen, there can now be a scenario where after 15 days, your true monthly budget target is depleted because Google charged you double the daily budget every day.
I say this is unlikely to happen because Google would only try to do this if it expected no searches to happen for your keywords in the second half of the month. I expect that most of the time Google will try to spend the equivalent of a weekly budget in any week so you might see some expensive days in a week, but they’d be balanced out by lower days that same week.
I think it is likely that if you change budgets mid-week, you may end up having exceeded a weekly budget target as early as Wednesday.
Tools to manage Budgets
Our goal at Optmyzr is to provide PPC experts with tools to make their lives easier. That often means we help you bridge the gap between what the advertiser wants and the way Google lets you manage to those targets.
We offer several ways to make budget management easier.
AdWords Script: Advanced Budgets – Pause when things spend too much
This script is primarily used by advertisers to maintain an account-level monthly budget. Rather than maintaining a shared budget for many campaigns (which is inflexible and doesn’t allow allocating more money to high performing campaigns), advertisers can continue to use the more flexible campaign-level budgets and use this script to detect when the account has exceeded its overall monthly budget threshold before automatically shutting it down until the next month starts.
A lesser-used, but now very important capability of this same script is that it can be used to enforce campaign daily budgets. The script can control budgets for keywords, ads, ad groups, campaigns, and accounts, and it can use a daily, weekly (M-S), weekly (S-S), or monthly date range. We never thought that a campaign daily budget would be particularly useful since that’s what AdWords provides. But now that they changed the rules on overdelivery, this script can be used to set a cap on the daily budget.
Here’s an example: Say you have a $100 daily budget and you were okay with 20% overdelivery but 100% overdelivery scares you. Simply set the script to enforce a $120 daily budget and within an hour of the campaign reaching that amount, it will be paused until the next day. Obviously, you could set the threshold a bit lower if you don’t even want the few dollars that might be spent during the 60 minutes in between when the script runs every hour.
What’s nice is that thanks to Optmyzr’s Enhanced Scripts system, you can very easily mix and match settings and do so for all your accounts. So it’s possible to enforce both a daily campaign budget and a monthly account budget on the same account. The two settings won’t interfere with one another.
AdWords Script: Reach Target Monthly Spend
The whole point of what Google is trying to achieve with this change to overdelivery is to more accurately hit monthly targets. We’ve been providing that functionality at Optmyzr for quite some time already with a script that updates budgets every day to redistribute the remaining money to the remaining days.
For example, with a $3000 daily budget in a 30 day month, you’d start with a $100 daily budget. If for some reason you spent none of that money on day 1, this script would divide the remaining $3000 by 29 days and set a new daily budget of $103.45.
The script is more sophisticated than this and can deal with day-of-week fluctuations. It looks at historical spend patterns for different days in an account and can overallocate the necessary amount to fully capture each day’s full potential. In other words, rather than saving budget for the future when we already know that future days typically are pretty weak, we’ll let the script set a higher budget if it feels today’s a day with high potential.
We are monitoring how this script performs with Google’s new overdelivery levels. My expectation is that it will do quite well for anyone already using the ‘Based on Day of Week Potential’ allocation method because this sets a lower budget when it expects there to be less traffic. If for some reason the day is unusual and more traffic is available, it would overdeliver but because the base budget is set lower by the script, the overage will also be lower.
Note that the setting ‘Evenly with Increases For High Potential Days of the Week’ doesn’t set lower values based on day-of-week performance, it only sets higher values for high potential days. It doesn’t lower the value for lower potential days just in case those days actually end up being unexpectedly better. Now that Google can overdeliver more, it may be worth considering switching from this setting to the setting ‘Based on Day of Week Potential’
We also recommend running this script in conjunction with the one mentioned above that limits overall spend.
Both scripts have the capability to take inputs from a Google Sheet which massively reduces the amount of time account managers have to spend clicking through our interface to maintain budget goals. If you don’t see the bulksheet settings in your Optmyzr account, please request it from the support team.
Budget Forecasting and Re-Allocation
We have updated our budget forecasting tools to account for the higher potential overdelivery. Our machine learning-based tool for budget forecasting already deals very well with seasonality and should continue to help you forecast your budgets.
Hour of Week Bid Adjustments
Our tool for helping set bid adjustments to capture more impression share on days of the week that have better CPA or higher ROAS will also continue to work with the new updates from Google. If you’re curious about how the quality of traffic fluctuates from day to day during the week, this tool is an easy way to investigate that. Results can even be included in automated scheduled reporting.
Managing PPC budgets can get extremely tedious so we’ve recently introduced 4 new tools to help make life a little easier.
Spend Projection Tool
Our newest addition to Data Insights is our Spend Projection tool. It helps predict how much you will spend by a certain date and recommends how much budget you should allocate to reach a target level of spend.
See an estimate of how much your PPC campaigns will spend by the end of the month or any other date in the future.
As you can see in the example above, the projected spend ranges from $968 to $1,305 and is most likely going to come in at $1,202. The way we calculate the range is based on recent performance and we show that performance in the “recent trends” view shown below.
See how much your PPC has spent for the past few days and get a sense of how consistent your spend is from one week to the next.
You can enter a target spend and target date to get some further insights in this tool. Based on your actual performance we can tell you how you are pacing against your target. For example, if you should have spent $100 by today but your actual cost is only $90, then you are pacing at 90%, slightly behind where you should be.
See how your actual spend compares to the target and the amount you should have spent by today to reach that target.
The final insight this tool provides is how much you should spend for the remainder of the budget period in order to hit your target spend. The recommendation takes into account very recent performance trends since you may have already adjusted budgets recently based on how you were pacing.
Get a recommendation for how much to spend per day to reach your target PPC spend for the month.
With this recommendation, the next step is to change budgets to meet that recommendation. That brings us to our second new tool…
The Optimize Budgets One-Click Optimization™ is designed to help allocate budgets in the most efficient manner. Remember that AdWords operates with daily budgets at the campaign level or shared budgets that encompass one or more campaigns. This tool helps translate monthly budget targets that are commonly used by companies to daily budgets as required by AdWords.
As with all optimizations, using the most granular setting should produce the optimal results, so we recommend using individual budgets for every campaign. However this tool works equally well with shared budgets, or even a mix of shared budgets and individual campaign budgets.
By enabling the custom columns for the key performance indicators (KPIS) you care most about, you can quickly prioritize campaigns that should have their budgets changed.
Re-allocate budget between campaigns and shared budgets to optimize overall PPC account performance.
In the example above for a lead-gen focused advertiser, we have enabled the column “Cost / Conv” as well as “IS Lost (Budget)”. Now we can easily see if there are budgets with opportunity for increased spend that also have a great CPA. Advertisers could also use the data in this tool to reduce spend, or improve performance for branding or ecommerce focused accounts.
Advanced Budgets – Pause when things spend too much
The 3rd new tool is an Enhanced Script™ for AdWords and is one of 2 new scripts to give you the ultimate level of automation for budget management. In fact, most advertisers will want to use both of our new Enhanced Scripts™for budgets at the same time.
This one prevents you from spending more than intended. If you’ve been spending time manually checking budgets at the end of the month to make sure you’re not overshooting the target, this script will automatically do this for you every single hour.
Here’s how you’d set this one up to prevent an account from spending significantly more than $10,000 per month:
Don’t spend more than intended in an AdWords account using this Enhanced Script.
This script can be copied-and-pasted into AdWords (either at the MCC or individual account level) and scheduled to run automatically every hour. As soon as the script detects that the cost for the month exceeds the maximum, all active campaigns can be paused and labeled. The script can even re-enable all campaigns it had paused at the start of the next month.
While this script is very useful for automating monthly budget management, it can do a lot more. For example, you can apply budgets at any level of the AdWords hierarchy: account, campaign, ad group, keyword, or ad. You can set budgets to be monthly, weekly (Monday through Sunday), weekly (Sunday through Saturday) or daily. An example use case is to enforce a daily budget for a set of experimental keywords (which you have labeled) so that they are not taking up too much budget from old keywords you already know to be performing well.
The 4th and final new budget management tool is another Enhanced Script™ but this one updates daily budgets based on how much money is left to be spent for the month.
Just like clients don’t like it when you overspend their target budget, they also don’t like it when you don’t spend enough. When used in combination with the previous script, this one can help ensure you end the month as close as possible to the target spend without having to monitor and tweak it manually.
Use this script to automatically update daily budgets to help reach a target spend by the end of the month.
This script works with either campaign-level or shared budgets. You simply specify the name of the budget (or the campaign) and how much you’d like to spend for the month. Tell it what to do when the budget has been exceeded (normally I leave the budget as-is because the other script handles that situation) and how to divide the remaining spend over the days remaining in the month. You can either split it evenly, front-load or back-load it, or use our most sophisticated method which uses historical data to determine the typical spend on different weekdays and then allocates bigger budgets on days with a higher usual spend potential. For most advertisers, this setting would set a higher budget on Mondays than on Sundays because there are usually more searches and more clicks on Mondays than Sundays.
There are additional settings to tell the script how many weeks of data to use for determining day-of-week spend, and to allow the script to carry over unused budget from last month.
When you run this script using the verbose output mode (this is an advanced setting you can enable), you’ll see something like this:
When running the script you might see logs like these indicating that the daily budget has been adjusted to help meet the monthly target spend.
We hope you’ll give our new budget management tools and automations a try. We built these based on customer feedback and we’d love to hear more feedback about how else we can make these more useful, or what completely new methodologies you wish Optmyzr would build next.
The two things people care most about when managing AdWords campaigns are reducing cost and increasing conversions. Therefore, it is not surprising that one of the most common questions we get asked at Optmyzr is “how can your tools help me reduce spend and increase conversions?” In this blog post, we want to highlight the top four tools in Optmyzr that can help you reduce wasted spend on AdWords instantly.
1. Non-Converting Keywords
This is a one-click optimization that finds keywords that have not converted in the last 30 days. It takes into account statistical significance of data and only recommends those keywords to be paused that have received enough traffic but haven’t converted yet. It lets you pause these keywords with a single click. To help you make an informed decision, the system includes assisted conversion data and data from Google Analytics like bounce rate and average time on site. (One-Click Optimizations -> Non-Converting Keywords)
2. Hour of the Week Bid Modifier
Scheduling your ad to not show or to run at a reduced bid during underperforming times of the week is another great way to reduce wasted spend. This methodology lets you allocate more budget to those times of the week that perform well. The Hour of the Week Bidder lets you set bid modifiers with a single click in your AdWords account. It also gives you the option to imitate a metric where you can set bid modifiers based on the trend line conversions follow during the week. (One-Click Optimization -> Hour of the Week Bid Modifier)
One good way to optimize your campaigns is to make sure you’re reaching users in the right geographic location. With the Geo HeatMap you can find locations that result in spend but no conversions and locations that have a low ROAS. (Data Insights -> Geo HeatMap)
There are two ways to use this data:
Exclude underperforming geographic locations
Split your campaigns by location and allocate more budget to better performing locations
Ads leading to 404 error pages always result in wasted spend and a bad user experience. It is difficult to keep track of landing pages that stop working. This Enhanced Script for AdWords automatically check landing pages for all active ads and automatically pauses them to stop money from being spent on wasted clicks. (Enhanced Scripts -> Check Destination URLs) Read more about how this script works
Anyone who’s ever done strength training knows the challenge of overcoming a plateau. Once your body gets used to a certain regimen, it’s important to scale up your activity level — but without hurting yourself by doing too much too soon.
The same logic applies to scaling your PPC budget.
When your account is already performing well and receives a significant financial boost (like the one many brands will experience as we come out of the COVID-19 pandemic), it can be difficult to spend more while maintaining the same level of ROAS or CPA.
While it’s fairly simple, it certainly isn’t easy.
With that being said, here are some tips to help you to take greater control of your PPC budget without compromising on ROAS and CPA goals.
Manage your budgets better
If it sounds straightforward, that’s because it is. Effective budget scaling begins with making your marketing dollars work more efficiently, and a better understanding of where your account is experiencing the greatest returns and wastage.
Fortunately, Optmyzr gives you the tools to get where you need to go.
Optmyzr’s Spend Projection tool uses historical data to predict future spend.
Spend Projection: This insight from Optmyzr predicts your account’s likely spend by the end of the selected time period (user guide).
Optimize Budget: Use this tool to identify budgets and campaigns losing impression share due to budget and optimize them to maximize ROAS (user guide).
Budget Simulator: Found as a feature in the Optimize Budget tool, this gives you intelligent suggestions for budget reallocation, including daily budgets. It tells you how much budget a campaign or shared budget can actually spend. This recommendation is based on years of historical spend analysis and current spend patterns.
If your current campaign setup and traffic don’t exhaust your budget, there are additional steps you can take.
Grow your account
Given the way your current campaigns are set up, you may not have significant opportunity to grow your account traffic. In this case, you’ll need to grow your account.
You can achieve this with a two-pronged approach.
1. Hone more keyword opportunities
Reviewing search terms with good performance can open up a world of possibilities that you may have neglected or been unaware of. Optmyzr lets you do this with a number of one-click optimizations.
Find search queries with conversions and high CTR using the Keyword Lasso tool. Add them as new keywords, or create entirely new ad groups.
Create and automate custom strategies to manage search queries using the Rule Engine (work with Google Microsoft, and Amazon advertising accounts).
The Rule Engine allows you to add keywords based on queries that are driving conversions or that have a better CTR than the associated keyword, or to add keywords of another match type.
Use the Keyword Lasso tool to discover new opportunities to fully utilize your budget.
2. Promote existing keywords, ad groups and campaigns
Sometimes, it’s not a question of looking for new opportunities, but optimizing the ones you’re already capitalizing on to yield better results. We can help you take performing campaigns up a notch without needing to do the heavy lifting yourself.
Use the Conversion Grabber to increase bids for converting keywords losing impression share due to ad rank.
The Optimize Target ROAS and CPA tool allows you to tweak target ROAS and CPA values at ad group level for ad groups losing Impression Share due to ad rank.
Apply bid adjustments based on time, location, gender, and audience to maximize campaign performance and better utilize available budgets.
The Optimize Target CPA & ROAS tool helps increase conversions with automated bidding.
The importance of risk mitigation
At Optmyzr, we believe risk mitigation is a vital component of any evolving PPC strategy. So while you explore these options to expand your account and promote existing inventory, be sure to have a safety net in place.
Acquire a list of expensive keywords or product groups, and update it on a regular basis. Keep an eye on these so they don’t accrue unnecessary cost, raising CPA and reducing ROAS.
Automate the process of adding negative keywords to search or shopping campaigns in order to limit clicks that don’t convert. Use the Non-Converting Search Queries strategy in the Rule Engine.
Maintain and monitor ROAS performance
Once you have the different pieces in place, it’s important to keep a regular eye on things. As humans, we can provide context that machines don’t have and increase the chances of a favorable outcome.
Alerts and budget tracking on the MCC dashboard will drop notifications if the performance for a metric falls below target — or even if it starts trending in the wrong direction.
When running a manual bidding strategy, establish and track target ROAS for keywords using the Rule Engine. If you prefer to use automated bidding, this piece by Optmyzr and Google might offer more relevant insights.
Conclusion
PPC strategy is never as easy as we’d like it to be, and challenges like the ongoing pandemic add variables that can affect performance overnight.
At a time when current data is volatile and historical data is unreliable, this ‘human context’ is more critical than ever to getting the most out of machine learning.
By regularly checking in on your automations, you’ll be able to exert greater influence over how and where your marketing dollars are channeled, giving you a better chance of seeing the results your brand is looking for.
AdWords announced a major change to how overdelivery will work with daily budgets. As of October 4th, overdelivery will be capped at 100% of the daily budget rather than 20%.
This means that you could now be on the hook for double your daily budget rather than 120%.
Overall this is a reasonable change from Google’s end because it helps them better achieve a target monthly budget which is what most advertisers have in mind. Few businesses are operated with daily budgets of any kind. Monthly, quarterly, or annual budgets are much more common. So what typically happens is that a business budget is divided by the number of days in the period to derive the daily budget that AdWords needs.
In the case of a monthly budget target, simply divide the amount by 30.4 to get the daily budget. Why 30.4? Because a typical year has 365 days and divided by 12 months that’s 30.41666…
You might wonder why Google doesn’t simply have a monthly budget in the first place. Several reasons:
1. Some campaigns are flighted and have a set start and end date. For example, a campaign to promote a new movie usually doesn’t start on the 1st and end on the last of the month.
2. One of the big selling points of AdWords is that you can always change your mind. So if an advertiser finds the results aren’t what they expected, they can terminate a campaign on any day. It’s better in this case that they are only on the hook for the number of days a campaign ran rather than the monthly equivalent.
Daily budgets are good for more control
PPC experts clamor for more control. When Google changed how exact match works (by allowing word order to be different and function words to be included or excluded) or when Google removed bid adjustments for tablets (which have since returned), agencies and other professional account managers bemoaned the loss of granular controls.
With daily budgets, Google is actually providing a more granular way to control things than if they had monthly budgets so we should not ask Google to replace daily budgets with monthly budgets. Rather we need to understand how to use the granular controls they’ve given us to achieve the goals set by clients.
The way overdelivery works just introduces a new challenge but it should not come as a total shock since overdelivery has been around for as long as AdWords (in its current CPC form) has existed.
A Primer on Overdelivery
Overdelivery exists in AdWords to give the ad serving system the flexibility to spend different amounts based on the available opportunity. If you look at your costs for different days of the week, you’ll notice that for most campaigns there is a day of week fluctuation. This could be due to search patterns in your industry, or simply because fewer searches are done during the weekend than during the week.
Overdelivery prior to October 4, 2017 was limited to 120% of the daily budget. Two things happen when Google processes an advertiser’s charges:
1. The maximum daily bill can be no higher than 120% of the daily budget
2. The maximum monthly bill can be no higher than 30.4 times the daily budget
Any amounts in excess of either rule are returned to the advertiser and will appear as an overdelivery credit. Note that this is not a situation where Google charges you the higher of two numbers – both conditions are mutually exclusive. For example, it is possible to get a daily overdelivery credit even if the monthly bill is less than 30.4 times the daily budget.
An example for an advertiser with a $100 daily budget:
Here we have a month that contains 30 days. Let’s look at week 1. During this week, even though Google accrued costs above the daily budget on the first 3 days, they only overdelivered $50. The last 3 days of that week, there weren’t many searches and they underdelivered by $80. For that week, they spent $30 below the advertiser’s target.
In weeks 2 through 5, they overdelivered $35 on Monday and Tuesday and for each of those weeks, that put them right on the mark. However they were not allowed to charge more than $120 on any given day, so the advertiser still gets a $30 credit every week: $15 for Monday and $15 for Tuesday.
For the entire month, they accrued clicks worth $3040 but can only bill $2920, $80 below what the advertiser wanted.
After October 4, 2017, overdelivery can now bill up to twice the daily budget on any day. So it now has these restrictions:
The maximum daily bill can be no higher than 200% of the daily budget
The maximum monthly bill can be no higher than 30.4 times the daily budget
In the same example as the table above, Google would no longer have to issue an overdelivery credit for daily overages since they never went above $200 on any day. They would also be right on target for the monthly rule of $100 * 30.4 = $3040 for the month.
This is a reasonable thing for advertisers because they are now spending what they implicitly told Google their goal was.
Wait, aren’t advertisers now paying more for the same?
In both scenarios laid out above, advertisers got the same traffic, but before Oct 4th they paid $120 less than they would now. Clearly, that is a bad thing. However, Google doesn’t like to give away clicks for free when there are other advertisers willing to pay for those clicks so they’d gotten really good at staying within the 20% daily overdelivery cap so in reality, few advertisers were seeing these credits. They used to be common 10 years ago, but not recently.
One way Google got really good at preventing overdelivery was by becoming really conservative when serving ads when a budget might be almost depleted. Because there is some delay between when a click happens (and becomes billable) and when the ad serving system knows that this new click has been charged towards a budget, Google slows down ad serving once advertisers come close to their budget. By being conservative, Google hopes that all the billed clicks are known to the serving system before more ads are served. This has generally resulted in a rule-of-thumb guideline that a budget should be at least 10 times the amount of the highest CPC bid within that budget. In other words, a lawyer bidding $100 per click would need at least a $1000 daily budget to get their ads to show with reasonable confidence.
This is really the simplest case and you don’t need to change anything you do. Google will continue to do its best to reach 30.4 times your daily budget. If they were not able to meet the target in the past because your ads were turned off on weekends, or because there just wasn’t much volume on some days of the week, they may now start to serve more ads on the days with more available volume to make up for the lower days. This makes it more likely they will fully spend your budget.
If you shift budgets around during the month
Budgets don’t exist in a vacuum. Usually, you’ll have more than 1 budget for an advertiser. A simple example: one budget to sell used cars, another to sell new cars. As the month goes on, used inventory may increase and you may want to allocate a bigger portion of the overall budget to it. When you make a budget change in the middle of a month, Google only has to credit back any amounts above twice the daily budget. While it is unlikely to happen, there can now be a scenario where after 15 days, your true monthly budget target is depleted because Google charged you double the daily budget every day.
I say this is unlikely to happen because Google would only try to do this if it expected no searches to happen for your keywords in the second half of the month. I expect that most of the time Google will try to spend the equivalent of a weekly budget in any week so you might see some expensive days in a week, but they’d be balanced out by lower days that same week.
I think it is likely that if you change budgets mid-week, you may end up having exceeded a weekly budget target as early as Wednesday.
Tools to manage Budgets
Our goal at Optmyzr is to provide PPC experts with tools to make their lives easier. That often means we help you bridge the gap between what the advertiser wants and the way Google lets you manage to those targets.
We offer several ways to make budget management easier.
AdWords Script: Advanced Budgets – Pause when things spend too much
This script is primarily used by advertisers to maintain an account-level monthly budget. Rather than maintaining a shared budget for many campaigns (which is inflexible and doesn’t allow allocating more money to high performing campaigns), advertisers can continue to use the more flexible campaign-level budgets and use this script to detect when the account has exceeded its overall monthly budget threshold before automatically shutting it down until the next month starts.
A lesser-used, but now very important capability of this same script is that it can be used to enforce campaign daily budgets. The script can control budgets for keywords, ads, ad groups, campaigns, and accounts, and it can use a daily, weekly (M-S), weekly (S-S), or monthly date range. We never thought that a campaign daily budget would be particularly useful since that’s what AdWords provides. But now that they changed the rules on overdelivery, this script can be used to set a cap on the daily budget.
Here’s an example: Say you have a $100 daily budget and you were okay with 20% overdelivery but 100% overdelivery scares you. Simply set the script to enforce a $120 daily budget and within an hour of the campaign reaching that amount, it will be paused until the next day. Obviously, you could set the threshold a bit lower if you don’t even want the few dollars that might be spent during the 60 minutes in between when the script runs every hour.
What’s nice is that thanks to Optmyzr’s Enhanced Scripts system, you can very easily mix and match settings and do so for all your accounts. So it’s possible to enforce both a daily campaign budget and a monthly account budget on the same account. The two settings won’t interfere with one another.
AdWords Script: Reach Target Monthly Spend
The whole point of what Google is trying to achieve with this change to overdelivery is to more accurately hit monthly targets. We’ve been providing that functionality at Optmyzr for quite some time already with a script that updates budgets every day to redistribute the remaining money to the remaining days.
For example, with a $3000 daily budget in a 30 day month, you’d start with a $100 daily budget. If for some reason you spent none of that money on day 1, this script would divide the remaining $3000 by 29 days and set a new daily budget of $103.45.
The script is more sophisticated than this and can deal with day-of-week fluctuations. It looks at historical spend patterns for different days in an account and can overallocate the necessary amount to fully capture each day’s full potential. In other words, rather than saving budget for the future when we already know that future days typically are pretty weak, we’ll let the script set a higher budget if it feels today’s a day with high potential.
We are monitoring how this script performs with Google’s new overdelivery levels. My expectation is that it will do quite well for anyone already using the ‘Based on Day of Week Potential’ allocation method because this sets a lower budget when it expects there to be less traffic. If for some reason the day is unusual and more traffic is available, it would overdeliver but because the base budget is set lower by the script, the overage will also be lower.
Note that the setting ‘Evenly with Increases For High Potential Days of the Week’ doesn’t set lower values based on day-of-week performance, it only sets higher values for high potential days. It doesn’t lower the value for lower potential days just in case those days actually end up being unexpectedly better. Now that Google can overdeliver more, it may be worth considering switching from this setting to the setting ‘Based on Day of Week Potential’
We also recommend running this script in conjunction with the one mentioned above that limits overall spend.
Both scripts have the capability to take inputs from a Google Sheet which massively reduces the amount of time account managers have to spend clicking through our interface to maintain budget goals. If you don’t see the bulksheet settings in your Optmyzr account, please request it from the support team.
Budget Forecasting and Re-Allocation
We have updated our budget forecasting tools to account for the higher potential overdelivery. Our machine learning-based tool for budget forecasting already deals very well with seasonality and should continue to help you forecast your budgets.
Hour of Week Bid Adjustments
Our tool for helping set bid adjustments to capture more impression share on days of the week that have better CPA or higher ROAS will also continue to work with the new updates from Google. If you’re curious about how the quality of traffic fluctuates from day to day during the week, this tool is an easy way to investigate that. Results can even be included in automated scheduled reporting.
Managing PPC budgets can get extremely tedious so we’ve recently introduced 4 new tools to help make life a little easier.
Spend Projection Tool
Our newest addition to Data Insights is our Spend Projection tool. It helps predict how much you will spend by a certain date and recommends how much budget you should allocate to reach a target level of spend.
See an estimate of how much your PPC campaigns will spend by the end of the month or any other date in the future.
As you can see in the example above, the projected spend ranges from $968 to $1,305 and is most likely going to come in at $1,202. The way we calculate the range is based on recent performance and we show that performance in the “recent trends” view shown below.
See how much your PPC has spent for the past few days and get a sense of how consistent your spend is from one week to the next.
You can enter a target spend and target date to get some further insights in this tool. Based on your actual performance we can tell you how you are pacing against your target. For example, if you should have spent $100 by today but your actual cost is only $90, then you are pacing at 90%, slightly behind where you should be.
See how your actual spend compares to the target and the amount you should have spent by today to reach that target.
The final insight this tool provides is how much you should spend for the remainder of the budget period in order to hit your target spend. The recommendation takes into account very recent performance trends since you may have already adjusted budgets recently based on how you were pacing.
Get a recommendation for how much to spend per day to reach your target PPC spend for the month.
With this recommendation, the next step is to change budgets to meet that recommendation. That brings us to our second new tool…
The Optimize Budgets One-Click Optimization™ is designed to help allocate budgets in the most efficient manner. Remember that AdWords operates with daily budgets at the campaign level or shared budgets that encompass one or more campaigns. This tool helps translate monthly budget targets that are commonly used by companies to daily budgets as required by AdWords.
As with all optimizations, using the most granular setting should produce the optimal results, so we recommend using individual budgets for every campaign. However this tool works equally well with shared budgets, or even a mix of shared budgets and individual campaign budgets.
By enabling the custom columns for the key performance indicators (KPIS) you care most about, you can quickly prioritize campaigns that should have their budgets changed.
Re-allocate budget between campaigns and shared budgets to optimize overall PPC account performance.
In the example above for a lead-gen focused advertiser, we have enabled the column “Cost / Conv” as well as “IS Lost (Budget)”. Now we can easily see if there are budgets with opportunity for increased spend that also have a great CPA. Advertisers could also use the data in this tool to reduce spend, or improve performance for branding or ecommerce focused accounts.
Advanced Budgets – Pause when things spend too much
The 3rd new tool is an Enhanced Script™ for AdWords and is one of 2 new scripts to give you the ultimate level of automation for budget management. In fact, most advertisers will want to use both of our new Enhanced Scripts™for budgets at the same time.
This one prevents you from spending more than intended. If you’ve been spending time manually checking budgets at the end of the month to make sure you’re not overshooting the target, this script will automatically do this for you every single hour.
Here’s how you’d set this one up to prevent an account from spending significantly more than $10,000 per month:
Don’t spend more than intended in an AdWords account using this Enhanced Script.
This script can be copied-and-pasted into AdWords (either at the MCC or individual account level) and scheduled to run automatically every hour. As soon as the script detects that the cost for the month exceeds the maximum, all active campaigns can be paused and labeled. The script can even re-enable all campaigns it had paused at the start of the next month.
While this script is very useful for automating monthly budget management, it can do a lot more. For example, you can apply budgets at any level of the AdWords hierarchy: account, campaign, ad group, keyword, or ad. You can set budgets to be monthly, weekly (Monday through Sunday), weekly (Sunday through Saturday) or daily. An example use case is to enforce a daily budget for a set of experimental keywords (which you have labeled) so that they are not taking up too much budget from old keywords you already know to be performing well.
The 4th and final new budget management tool is another Enhanced Script™ but this one updates daily budgets based on how much money is left to be spent for the month.
Just like clients don’t like it when you overspend their target budget, they also don’t like it when you don’t spend enough. When used in combination with the previous script, this one can help ensure you end the month as close as possible to the target spend without having to monitor and tweak it manually.
Use this script to automatically update daily budgets to help reach a target spend by the end of the month.
This script works with either campaign-level or shared budgets. You simply specify the name of the budget (or the campaign) and how much you’d like to spend for the month. Tell it what to do when the budget has been exceeded (normally I leave the budget as-is because the other script handles that situation) and how to divide the remaining spend over the days remaining in the month. You can either split it evenly, front-load or back-load it, or use our most sophisticated method which uses historical data to determine the typical spend on different weekdays and then allocates bigger budgets on days with a higher usual spend potential. For most advertisers, this setting would set a higher budget on Mondays than on Sundays because there are usually more searches and more clicks on Mondays than Sundays.
There are additional settings to tell the script how many weeks of data to use for determining day-of-week spend, and to allow the script to carry over unused budget from last month.
When you run this script using the verbose output mode (this is an advanced setting you can enable), you’ll see something like this:
When running the script you might see logs like these indicating that the daily budget has been adjusted to help meet the monthly target spend.
We hope you’ll give our new budget management tools and automations a try. We built these based on customer feedback and we’d love to hear more feedback about how else we can make these more useful, or what completely new methodologies you wish Optmyzr would build next.
The two things people care most about when managing AdWords campaigns are reducing cost and increasing conversions. Therefore, it is not surprising that one of the most common questions we get asked at Optmyzr is “how can your tools help me reduce spend and increase conversions?” In this blog post, we want to highlight the top four tools in Optmyzr that can help you reduce wasted spend on AdWords instantly.
1. Non-Converting Keywords
This is a one-click optimization that finds keywords that have not converted in the last 30 days. It takes into account statistical significance of data and only recommends those keywords to be paused that have received enough traffic but haven’t converted yet. It lets you pause these keywords with a single click. To help you make an informed decision, the system includes assisted conversion data and data from Google Analytics like bounce rate and average time on site. (One-Click Optimizations -> Non-Converting Keywords)
2. Hour of the Week Bid Modifier
Scheduling your ad to not show or to run at a reduced bid during underperforming times of the week is another great way to reduce wasted spend. This methodology lets you allocate more budget to those times of the week that perform well. The Hour of the Week Bidder lets you set bid modifiers with a single click in your AdWords account. It also gives you the option to imitate a metric where you can set bid modifiers based on the trend line conversions follow during the week. (One-Click Optimization -> Hour of the Week Bid Modifier)
One good way to optimize your campaigns is to make sure you’re reaching users in the right geographic location. With the Geo HeatMap you can find locations that result in spend but no conversions and locations that have a low ROAS. (Data Insights -> Geo HeatMap)
There are two ways to use this data:
Exclude underperforming geographic locations
Split your campaigns by location and allocate more budget to better performing locations
Ads leading to 404 error pages always result in wasted spend and a bad user experience. It is difficult to keep track of landing pages that stop working. This Enhanced Script for AdWords automatically check landing pages for all active ads and automatically pauses them to stop money from being spent on wasted clicks. (Enhanced Scripts -> Check Destination URLs) Read more about how this script works
