Is there such a thing as too little ppc spend?

Yes there is! Today we are going to talk about some of the trade-offs for when spending too little of your budget could actually hurt your overall performance and drive poor spend efficiency.

What are some of the common pitfalls of under-spending?

  1. Lack of conversions (due to lost demand)
  2. Campaigns that are budget constraint (restricting ad rotation and leading to lower overall performance)
  3. Spreading ppc spend too thin

All of the the above are some key pitfalls however, all of which have great impact on overall PPC performance.

What are some high-level recommendation when planning the appropriate amount of PPC spend?

  1. Check your industry’s average CPCs (This will help with getting closer to understanding potential CPAs and all-in conversions for particular keywords
  2. Identify business KPIs and expectations around lead goals (In order to level-set expectations around conversion projections)
  3. Build your PPC campaigns for scale

The most common mistake I’ve experienced when inheriting a Google Ads account is unrealistic lead projections and expectations.

It is important to calculate when high average CPCs may lead to higher CPAs and overall spend. It is almost definitely going to put a stop on your PPC investment if the amount of spend exceeds what may be reasonable for the business’s target CPA. Leading to negative ROI and poor investment.

What if our campaign budgets are “limited by budget”?

Limited by budget is an indicator that the total amount of budget for a particular campaign is insufficient to capture a meaningful amount of traffic for the set up keywords within your campaign.

This is most common for campaigns that have a lot of keywords with high CPCs combined with a daily budget that is only capable of a few clicks.

The best practice for setting your budgets to avoid being considered “limited” is to increase the daily budget and adjust your overall spend at the ad group or keyword level. This can be done by using bid modifiers, adjustments, or a combination of both.

If it is your first time using Google Ads feel free to reach out for a free consultation to get an introduction into the ins and outs of Google Search and methodologies related to driving traffic to your web experience.

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