Note: This is the sister improvement task to "Optimize campaign bids". Both tasks are concerned with budget caps, but this task only shows when you campaign is performing well compared to your target CPA.
Budget caps aren't as straightforward as they might seem.
Setting a daily budget cap is the easiest way to make sure that you don’t exceed your desired level of spending and helps to keep costs under control.
When you've set a budget cap and your campaign is "limited by budget", that means Google is charging you for clicks until your run out of money for that day. By default, Google will do its best to spread the clicks out over the entire time 24h.
But if you're running out of money every day, why are you choosing to pay so much per click? Reduce your bids! Within the same daily budget constraint, you'll be able to squeeze a higher number of cheaper clicks.
Once you've refined your bids a little, if you can tolerate more daily fluctuation, you can remove the budget limit completely and have your daily spend be driven by how many impressions you were able to get with your lower CPCs. This is the smarter way!
That's why we believe your campaign budget should usually be controlled by the amount you bid on each keyword, not by daily caps.
When capping your AdWords budget makes sense.
You'll still want to cap your Adwords budget when:
- This is a new campaign which has unpredictable spend
- This is a campaign designed to test out broad keywords, which exists only to seed new keyword themes
- You're not able to tolerate spend fluctuations, or you're not able to give that campaign enough attention to catch issues in a timely manner
How does this improvement work?
You’ll see this improvement when one of your campaigns is performing well compared to the account average, but is limited by budget. We'll suggest that you lift its budget cap to let your account perform better overall.
We'll recommend lifting the cap by a specific amount, and give you an estimate of the resulting change in your campaign's CPA.
To help you decide whether to push or dismiss this improvement, we'll simulate the effect of the change on the KPIs and compare the data to your current projected KPIs for the next 30 days.
- We'll ignore campaigns that were created less than 8 days ago
- We'll ignore campaigns with shared budgets
- We'll ignore campaigns that are performing within +/-5% of your CPA target.
- For calculating CPAs, we'll look at the last 30 days of data.
- To find out if a campaign is budget capped, we don't use the same method as AdWords. We'll consider that a campaign is budget capped if it has spent over 85% of it's budget on average over the last 7 days. This is a bit more aggressive than AdWords, but in our experience it is more appropriate.
- The estimate of the spend, clicks and CPA after the bid change isn't going to be exactly accurate. The actual effect of the budget cap increase is going to depend on available extra impression inventory for that campaign.