Note: This is the sister improvement task to "Optimize campaign bids". Both tasks are concerned with budget caps, but this task only shows when your campaign is performing well compared to your target CPA.
Budget caps aren't as straightforward as they might seem.
Daily budget caps help to manage cost by making sure you don’t exceed your target level of spending.
If you've set a budget cap and your campaign is "limited by budget", that means Google will charge you for clicks until you run out of money for that day. By default, Google will do her best to evenly allocate clicks over each 24h period.
So if you're running out of money every day, why are you paying 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, removing the daily budget cap completely will allow your daily spend to be determined by how many impressions your lower CPCs achieved.
We believe that optimal campaign spend should be determined by the amount you bid on each keyword, not by daily caps.
When does it make sense to cap a campaign budget?
You'll still want to cap your Adwords budget if:
- It's a new campaign with unpredictable daily spend.
- It's a campaign designed to test broad keywords and exists only to seed new keyword themes.
- You're not able to tolerate spend fluctuations, or you're not able to give the campaign enough attention to catch issues in a timely manner.
How does this improvement work?
You’ll see this improvement if one of your campaigns is performing well compared to the account average, but is limited by budget. We'll suggest that you lift the cap to allow for better performance 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 resulting KPI changes 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.