Managing Google AdWords Budget

Google AdWords Budgeting Strategy

Budgeting for your AdWords campaign is not difficult if you know what you want to spend, but it is not a one-shot deal. Actively monitoring and managing your AdWords budget is the only way to get real value out of your ad spend.

If your budget is $10,000/month you should divide it by 30 (the average number of days in any given month) for your daily ad spend. You end up with $333/day. You can then divide the $333 across your campaigns.

The first day you launch an account, I recommend spending no more than 5% of your budget on branded keywords. Branded keywords are usually cheaper than other terms, and often not as valuable — since most companies rank well organically for branded keywords. Branded keywords also drive traffic already familiar with your brand. Why do that when you can spend money getting new customers?

Splitting your daily ad spend across campaigns is an ongoing exercise. When launching a campaign for the first time, you can’t know what sort of impression volume you are going to get, or the exact costs for individual keywords. Because of this, I begin by distributing my remaining budget evenly across campaigns. After a couple of days, campaigns not using the entire daily budget can be lowered to match the actual daily spend. The remaining ad spend can be added to campaigns which are maxing out their daily budget.

As the campaigns mature, you will want to move your ad spend into the campaigns and keywords that have the highest conversion rates and ROI.

AdWords uses a daily budget that is set at the campaign level. It is a daily target , which is flexible +/- 20%.  Google gives its explanation here. In simple terms, Google tries to meet your daily budget, but does so over the course of the month. Days where your account doesn’t spend its entire budget, the remaining budget may carry over to the next day — and vice versa when it spends more than your daily budget on a given day. You can rest assured that at the end of the month you will have spent almost exactly your daily budget averaged over the course of the month.