Note: This is the sister improvement task to Reduce Campaign Keyword 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 on campaigns help to manage costs, making sure you don’t exceed your target spend.
If you've set a budget cap and your campaign is "limited by budget", Google will charge you for clicks until you run out of money for that day. By default, Google will do her best to allocate clicks evenly over each 24-hour period.
So if you're running out of money every day, why are you paying so much per click? Reduce your bids! Bidding less per keyword means you might appear in a lower ad position, but more frequently. Within the same daily budget constraint, you'll be able to squeeze out more clicks.
Once you've refined your bids, increasing the daily budget cap 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 promptly.
How does this improvement work?
You’ll see this improvement if one of your campaigns is performing well compared to the account's average CPA, but is limited by budget. We'll suggest you raise the cap to take full advantage of the campaign's potential.
We'll recommend raising the cap by a specific amount and give you an estimate of resulting changes in your campaign's CPA.
To help you decide whether to Raise Budget Cap or Dismiss this improvement, we'll simulate resulting KPI changes for the next 30 days and compare them to the previous 30 days.
If you'd like to raise the budget cap by a different amount, click Adjust to set the increase manually.
We'll ignore campaigns created fewer than eight days ago.
We'll ignore campaigns with shared budgets.
We'll ignore campaigns 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 a campaign budget-capped if it has spent over 85% of its budget on average over the last seven days. It's more aggressive than AdWords, but in our experience more appropriate.
The estimate of the spend, clicks and CPA after the bid change isn't going to be precisely accurate. The actual effect of the budget cap increase is going to depend on available extra impression inventory for that campaign.