7 Steps to Set Up a New Campaign in Google AdWords

Google AdWords is extraordinary compared to other promoting alternatives on the web. Google has more than 1.17 billion clients, and that is the reason AdWords is an extraordinary method to get your site before the eyes of your buyers.

Did you realize that for each $1 spent on Google AdWords, the normal entrepreneur winds up with $2 in income? It's difficult to beat that ROI with other publicizing stages. That is the reason in case you're searching for a decent choice with regards to promotions, you ought to consider Google AdWords.

It's not hard to begin with Google Adwords, but rather it can be overpowering. That is the reason I will walk you through 7 stages to set up a crusade regardless of whether it's your first time signing into AdWords.




Step #1: Go to the Google AdWords Campaign Website

Go to https://adwords.google.com. You will then observe, "Begin Now." Click on that and agree to accept your AdWords account. You would then be able to tap on the catch that says, "Make your first crusade."

Step #2: Choose a Campaign Type and Name
You have choices for a battle compose. When you're simply beginning, it's best to pick "Pursuit Network as it were."

Name your crusade. You might need to pick a name that needs to do with the item or administration you're publicizing.

Step #3: Select Ad Display Location

You have numerous alternatives with regards to individuals' areas. You can pick a huge or little territory. For example, a whole nation or only a city. On the off chance that you need a particular region, you can utilize scope longitude organizes.

Make certain you know the areas of your optimal client. In case you're a nearby entrepreneur, you need to target individuals around your zone. In case you're pitching your items and administrations to individuals all through the United States, pick the U.S. For entrepreneurs who offer universally, you might need to set up a few crusades for nations that have the most astounding deals or where a large portion of your shoppers live.

Step #4: Set Your Daily Budget

Until the point that you turn into a capable AdWords client, it's best to set a low day by day spending plan. This enables you to begin gradually, accumulate information, and afterward extend what's working once you are more comfortable with your crusades. Note that Google can and will go marginally finished your every day spending plan. Consequently, it's essential to watch out for your battles and change your financial plans every week to guarantee you don't go over your most extreme month to month promotion spending plan.

You should likewise set up your installment choices.

Manual Payments: You pay before your promotion appears.

Programmed Payments: You interface your record to your charge card or financial balance and the cash is drafted naturally.

Month to month Invoicing: Google gives credit lines to some entrepreneurs who qualify.

Step #5: Add Keywords

This can be dubious, particularly for first time promoters. Your first slant is probably going to include whatever number catchphrases as could reasonably be expected that you believe are significant for your business. Indeed, this is precisely what Google needs you to do in light of the fact that then you'll spend more cash.

Battle that desire! Rather, concentrate just on what we call the bulls eye catchphrases. These are where there is positively presumably that the individual scanning the watchword is searching for precisely what you offer. There may just be a modest bunch of these bulls eye watchwords and that is OK. Try not to include any watchwords where there is any uncertainty the searcher may not search for your item or administration.

Step #6: Create an Ad

This is the point at which the fun starts. You get the chance to make a promotion that will draw in your purchasers and influence them to snap to go to your site. Prospects will probably tap on an advertisement that has the watchword they utilized as a part of Google's inquiry bar. In this way, on the off chance that you are focusing on a particular watchword state your buyers use (in the wake of doing catchphrase inquire about), make certain to utilize that expression in one of the two features.

After the features, you can proceed onward to the advertisement depiction. Spotlight on the key advantages of your item or administration, depict your exceptional offer on the off chance that you have one, and end with a solid invitation to take action.

Ultimately, we prescribe sending individuals to a point of arrival that is made to explicitly coordinate your promotion. By doing this, you can guarantee that the data in the promotion is considered the presentation page, which will prompt more grounded transformations. Individuals frequently wrongly set up a promotion that publicizes an extraordinary arrangement and afterward sending them to their landing page that never specifies this arrangement. This exclusive prompts disappointment with respect to your prospect. A point of arrival ought to be exceedingly focused for the catchphrase expression you utilized as a part of your promotion.

Step #7: Set Up Conversion Tracking

This last advance is to set up all the proper transformation following for your business. Google gives you the accompanying choices:

Webform drives (ex. quote demands)

Internet business orders (ex. orders from your internet shopping basket)

Calls from advertisements (ex. telephone calls from the number showed on your promotions)

Calls from site (ex. telephone calls from the number showed on your site)

Imports from deals that happen off of the web

Ensure you set up all the suitable transformation following choices previously you turn the advertisements on. Else, you won't have the capacity to quantify the adequacy of your promotions!

Following, Adjusting, and Conquering Effective Adwords Campaigns

As your advertisements run, watch out for the investigation. You'll have the capacity to perceive what is working and what isn't working. As you focus on what your advertisements do, you'll have the capacity to get nearer to what will give you the best outcomes.

When you've made sense of which promotions your buyers tap on the most, you can make comparative ones for higher cost-per-click catchphrases. This will enable you to build your ROI.

Presently, simply ahead and begin. When you make a plunge, you'll begin to take in more about what works for your crusades and that AdWords can be an awesome method to publicize your business.

6 Adwords Tips to Maximize Your Campaigns for 2017

This month I've heard a lot about New Year's resolutions and goals for 2017. For businesses using Google AdWords, those resolutions include something about maximizing their ad budgets to ensure a strong ROI.

Here are 6 tips from our AdWords analysts to maximize your campaigns this year. 

Tip #1: Say No to Broad Matching

According to Google, Broad Match "lets a keyword trigger your ad to show whenever someone searches for that phrase, similar phrases, singular or plural forms, misspellings, synonyms, stemmings (such as floor and flooring), related searches, and other relevant variations." While using broad match may enable your ad campaign to show up for more keywords, they may not be the keywords that really convert for your business.

Jane recommends only using Broad Match Modified if you are experienced and have tested your target keywords well.

AdWords provides multiple keyword match types: Exact, Phrase and Broad Match. You should always use Exact and Phrase match in your AdWords account. To get more reach, use Broad Match Modified (not Broad Match). Broad Match Modified can be identified by the + sign in your account.

Here are examples of the different keyword match types:

• Exact Match looks like this: [Adwords ROI]
• Phrase Match looks like this: "Adwords ROI"
• Broad Match looks like this: Adwords ROI
• Broad Match Modified looks like this: +Adwords +ROI

Staying away from Broad Match allows you to conserve budget until you are sure which terms convert well for your business.

Tip #2: Give Top Keywords Ample Budget

Once you have an idea of what keywords convert best for your business, it's important to make sure that your budget is being spent to support those keywords.

While you want to leave some budget to be spent on testing new keywords, it's a good idea to manage your top converting keywords by putting them in their own campaign. Then, you can dedicate the majority of your budget to flow to that campaign so you're investing in what works. This will ensure your ad spend is directed at the keywords that will perform best for your business.

Tip #3: Separate Search and Display Campaigns

Although AdWords offers the option to combine both (search network with display select), it's usually best to run these tactics separately.

There is a lot of variation between search and display performance for most accounts, so by keeping them separate you can better control budgets. When you set up a new campaign, based on what you're trying to target, make sure you choose "search network only" or "display network only."

Tip #4: Always Use Negative Keywords

Adding keywords that are irrelevant to your business as negatives can be just as beneficial as the keywords you're bidding on.

Negative keywords help reduce the amount of times your ad is served on irrelevant queries. For instance, if you run a dental practice that offers root canals, and you're bidding on keywords related to root canals, you don't want your ad to show for someone searching for "root canal malpractice".

Negatives are particularly important when running Phrase, Broad, and Broad Modified match types. You can always see the actual searches that trigger your ads by going to your keywords tab and clicking on the "search terms" button. If any searches show up in that report that you don't want to be advertising on, then add them to the negative keyword list.

Tip #5: Include Ad Extensions to Your Campaigns

Aside from the benefit of adding relevant information about your business, ad extensions work to improve overall metrics. Adding extensions can increase your click through rate, improve your quality score and even make your ads stand out from the crowd.

According to Google, accounts that include at least one ad extension see an average of 10-15% increase in click-through-rate.

You can manually add extensions like sitelinks and click-to-message to improve relevance and lead submissions. Sometimes, Google will include automatic extensions to your ad based on the information it pulls from your AdWords account.

Tip #6: Run Responsive Display Ads

Google recently introduced responsive display ads to replace regular display ads. The main difference between the two is that you no longer need several image ads (or banners ads) to set up a display or remarketing campaign. Instead, you just need to upload an image, a headline, and your destination URL.

The image will automatically adjust its size, appearance, and format to fit any available ad space. This means, your ad can show in a native, dynamic text or image format in any size, on any website with ad space. This new ad format most importantly increases your reach and saves you time with setup.

3 Steps to Pick the Best AdWords Keywords

In today’s article I provide 3 criteria for selecting the best keywords for your Google AdWords campaign.  

If you have ever conducted keyword research for a Google AdWords search campaign, then you know the process can be daunting. Go to adwords.google.com/KeywordPlanner and start searching for relevant keywords for your business.  Within seconds you'll literally have hundreds of pages of keywords that Google has determined are related to your products or services.

 

That's a lot keywords to comb through!

 

In addition to the sheer volume of keyword possibilities there is another problem.  How do you know which keywords are better than others?  Google's keyword planner tool provides search volume, estimated cost per click and competition, but there is no column that grades the keyword opportunities.  Sorry, it's up to you to figure that out on your own.

 

To grade your keywords, you need to first list the criteria that make keywords better advertising opportunities.  In this article, I'll present 3 basic criteria that every keyword must meet before you add it to your AdWords campaign.

 

Criteria #1. Searched In Google

This first criteria should be obvious.  If the keywords you're targeting are not searched in Google, then you're not going to generate any leads or sales from your ad campaign.  There's no harm in adding keywords that are not searched, but you shouldn't expect to get anything from them.

OK, moving on we'll assume we're now only considering keywords that have search volume.

 

Criteria #2. Searched By Your Prospects

Next, we need to make sure the keyword is in fact searched by your ideal prospect.  For example, can you imagine situations where your prospect would turn to Google to search this particular keyword?  Or is it more likely that other people besides your ideal prospect would be searching?

This is not a perfect science and it requires you to put yourself in the shoes of your prospect.  Play devil's advocate and try to think about all the other people that might be searching for your keyword.  Also, review the current ads in Google.com for your keyword to see if those ads are targeting your prospect.  If they are, then that's a good sign.

 

Criteria #3. Searched To Make a Buying Decision

Finally, consider whether the keyword is more likely searched in order to make a buying decision or to do more research.  Your keywords can easily pass the first 2 criteria, but many will fail this last test.

Let's look an example for a chiropractor.  Consider these two keyword opportunities:

1. back pain
2. San Francisco chiropractor

Both are searched in Google. Check... Both are searched by a chiropractor's ideal prospect. Check... But one of them does not pass this 3rd criteria.  Can you guess which one?

It's "back pain."  The "back pain" keyword has no intent to make a buying decision.  It's more of a research keyword.  However, just about everyone that types in "San Francisco chiropractor" is looking to make a buying decision.  See the difference?

Again, this is not a perfect science and it requires you to put yourself in the searcher's shoes.  Think about all the different reasons why someone would search for the keyword you're considering and prioritize the keywords that are more likely searched by prospects looking to make buying decisions.  This will ensure you're targeting keywords in your AdWords campaign that are more likely to drive sales.

 

Default Campaign Settings In AdWords — The Good, The Bad & The Ugly

Fellow SEM experts, how many times has this happened to you? A newbie joins your company (or a company with which your SEM agency is working) and is convinced that he is an SEM master. He’s read a few SEM books, attended a conference or two, and gone through the AdWords tutorials, after all. It’s just keywords and text ads!

In a worst-case scenario, this genius has enough confidence to convince folks higher up in the organization that he can truly make positive improvements to the path of the company’s SEM fortunes and suddenly has some control over the campaigns. My favorite example of this scenario happened last year when a self-proclaimed “searchologist” did a re-org of a B2B AdWords campaign that resulted in an 85% conversion rate — a nice increase over the 3% conversion rate the campaigns had seen for the prior three years.

When I pointed out that this was likely due to a misplaced conversion pixel on the landing page and that this 85% “conversion rate” was more likely indicative of a 15% bounce rate, the searchologist shot back saying that it was the new account structure that was driving these incredible results. As with many things in life, SEM is easy to do, but hard to do well. This axiom is proven to me every day by neophytes who have anointed themselves searchologists, as in the case above.

To demonstrate how dangerous it is to start an AdWords campaign without a lot of deep knowledge, I recently set up a new AdWords campaign and looked at the default settings that AdWords recommends. As you’ll see in the following deep-dive, starting a campaign on AdWords recommended settings can easily lead you to a world of hurt.

Search & Display Or Search & Destroy?

The default campaign type when starting a new AdWords campaign is “Search Network with Display Select,” and the default setting is “standard” versus “all features.” Sticking with the default setting of “standard” here can cause advertisers to miss out on all sorts of opportunities to fine-tune their PPC campaigns, as you’ll see throughout this column.

Display Select is a recent addition to the AdWords world; it pushes your text ads onto parts of the Google Display Network (GDN). GDN can be a very powerful network if managed properly — we have many clients that see 30-40% of their acquisitions coming from GDN — but it can also be a cesspool of irrelevant and occasionally fraudulent sites. (Example: I recently evaluated a B2B telephony site that was spending thousands of dollars a month on a website that had articles about getting cat urine out of carpets!)
Moreover, we’ve found that the conversion rate on banner ads on GDN is astronomically higher than the conversion rate of text ads, so this “display select” offering (which involves text ads only) is a double-whammy for newbie AdWords users.

Devices: All For One, One For All

Regardless of whether you choose “standard” or “all features,” you are defaulted into all devices when you set up your campaign:

Of course, since the advent of Enhanced Campaigns, we are all defaulted into all devices. What’s missing here is the ability to exclude mobile devices by bidding at -100%. Assuming that new AdWords advertisers are the least likely to have mobile-optimized sites, running full-throttle on mobile is likely going to be pretty painful.

Location: Pakistanis Searching For “Los Angeles Burger King”

The next option is location targeting. The default setting (for US customers) goes to US and Canada, which makes sense to me. The advanced options (which I have highlighted in yellow in the screenshot) are missing for “standard” users:

I’ve found a surprisingly large variance in performance between “people in my targeted location” and “people searching for or viewing pages about my targeted location.” In general, folks outside the US perform much more poorly than people in the US (due to shipping costs or the local nature of a product or service). I generally recommend that you exclude these “geo intent” keywords unless you have data that suggest otherwise.

Extensions: PLAs MIA

Ad extension options are unchecked by default in the “standard” edition; they also exclude several more advanced options (yellow represents the excluded options):

Again, in the spirit of simplicity, I totally understand why Google has unchecked these and excluded some choices. That said, an advertiser that at a minimum doesn’t have sitelinks is going to be at a huge disadvantage for competitive terms, especially now that Google has tweaked its algorithm to factor ad extensions into ranking.
Additionally, for e-commerce businesses, not even showing product listing ads (PLAs) as an option is a pretty big deal. For many merchants, PLAs perform better than text ads, and Google appears to be giving PLAs more and more prominence.

Day Parting: All AdWords, All The Time

“Standard” setting users are not shown day-parting options, whereas the “all features” users at least get the ability to click and open a section on day-parting:

Depending on the business, day-parting can be very important. For example, brick-and-mortar businesses that do not have online storefronts are usually better off shutting off ads when their store is closed. B2B companies see conversion rates drop over the weekends.
Moreover, the options shown above aren’t even the most advanced choices — power users can also make bid adjustments by time of day, as opposed to just on/off functionality.

Ad Rotation: CTR FTW!

“Standard” users don’t get to choose ad rotation preferences. “All features” users can open up a hidden field to make their choice, although the “recommended” and default choice is to optimize for CTR:

My preference is to optimize for a combination of CTR and conversion rate, but given that this isn’t a choice, I’d rather chose to optimization for conversion rate.

Keyword Matching: Close Only Counts In Horseshoes & Hand Grenades

The last “all features”-only option allows advertisers to opt-out of exact and phrase near-match:

I haven’t seen a huge impact one way or the other from this feature, but when in doubt, I prefer to have more control over my keywords, so I opt out.

The Average Man Thinks He Isn’t

As I’ve said numerous times in this article, I don’t fault Google for making choices in the name of simplicity. Amongst self-serve online advertising platforms, Google has the best training and FAQs and the easiest-to-use interface. All that being said, the things that are missing from the default campaign settings in AdWords are the nuances that often make or break an account.
And, this ultimately goes back to my original point: people who think they know AdWords but actually don’t will get burned badly by simply following AdWords’ recommended settings. If you think an expert is expensive, wait until you see what a novice will cost you!

The PPC Experiment You Never Dare Run

A question that PPC account managers frequently have to deal with is, “Why are we paying for this traffic? Aren’t we going to get that traffic anyway?”
It’s a fair question, even if it is completely annoying to hear for the twentieth time by the twentieth new accounting manager you’ve had to break in. No matter what data you present, no matter how perfectly your charts demonstrate perfect, positive correlation between ad spend, revenues and profits, they never seem satisfied with your answer.
“Fine,” you say. “Let’s try an experiment. We call it the PPC nuclear option.”
“The nuclear option?” the accountant gasps. ”What’s that?”
“Well,” you continue obligingly, “We take all our PPC ad campaigns offline for a few months, and see what the true impact on our bottom line looks like. I just need you to sign off on it here….”
That usually ends the discussion — at least until next month’s AdWords and Bing Ads bills come due.

The PPC Nuclear Option — For Real!

I won’t bore you with the juicy details of how it came about (unless you promise to buy me a drink next time we meet), but the long and short of it is that I am now in the middle of a real-life PPC nuclear option experiment.
Campaigns that had been running for a few years were taken offline abruptly three months ago, and we are just about to put them back online. The website is now relying completely on referral and organic search traffic. The website itself and all downstream processes have remained virtually unchanged.
I thought it would be interesting to make a few simple observations at this point in the experiment. I’ll save deeper analysis for a later date, after we’ve put the campaigns back online.
Observation #1: Greater Than Expected Decline In Keyword Conversion Performance

Keyword conversion performance  before and after the “PPC Nuclear Option” was detonated.

Before we detonated the nuclear option, we were aware we’d lose substantial traffic to the site because about 70% of our traffic was coming from paid traffic sources. What we didn’t know was how our brand keywords or our highest ranking keywords (which were also part of the URL) would fare.
In the chart above, I’ve summarized the before and after conversion volumes for most important keywords that have driven conversions and was surprised by some of the results. We looked at our brand keywords, keywords that were prominent on the site and which appeared in our website URL, as well as our most productive non-brand keywords.
Branded Keywords - Our client’s brand is not a household name and there’s not a lot of search volume associated with it, so our brand keywords have never been our largest source of search conversions. They do, however, rank highly and so we were surprised to see conversion volume on them drop by 28%. We figured, based on earlier studies on brand keyword cannibalization, that we’d see only 10-15% drop in conversion volume for our high-ranking brand terms.
What would account for a greater than expected decline in brand term performance? I have a hunch that our Google GDN display ad campaigns may have been providing a lift while they were running, but since we are not a famous brand, that halo effect only lasted while our display ad campaigns were running. If my theory is correct, we should expect to observe an uplift once we start advertising again. Stay tuned.
URL Keywords – Our next best performers were keywords that literally described our products and which appeared in our website URL. These keywords have generally been at or near the top of the organic search listings, and they perform more like brand terms than generic keywords. We were most surprised that these would have dropped by a whopping 59%.
Non-Brand Keywords – We were also astounded at how deeply the PPC nuclear option demolished the performance of our best non-brand keywords, which dropped pretty near to zero.
Clearly, this client is too dependent on paid search on its most important terms.
Observation #2: Organic Traffic Needs To Contribute More Search Volume

After taking PPC campaigns offline, online organic and referral traffic remain.

This Google Analytics graph shows all search traffic from 2009 through 2013, and to my last point, demonstrates a highly unbalanced mix of online traffic sources, since 75% of their visitor traffic dropped when the nuclear option was detonated. I don’t know what the perfect ratios should be for organic to paid search traffic, but in general, I think most of us would agree that, over time, the mix should start to skew toward more unpaid sources of traffic and rely less on paid traffic.
Of course, figuring this out didn’t require taking the nuclear option because the data has been there the whole time. It does certainly lay bare the situation unambiguously, however. The accounting manager will love this data, and so will the SEO team (that doesn’t exist at the moment) because it shows how even modest investments in SEO can be justified financially.
Observation #3: Friendly “Ghost Clicks”

Google Analytics reports a small amount of PPC ad “ghost clicks” even after taking campaigns offline.

Even two months after taking the campaigns offline, we are still getting visitors from “ghost clicks.” Most ghost clicks happen when a visitor types your URL into their browser after first clicking on your ad. When they start typing the URL, their browser cache types ahead for them, showing them your URL along with your original URL tracking variables. We observed about 4% of our visitors coming in this way, but they represent only about 1% of the original ad click volume.
I don’t know what a good “ghost click” ratio might be, but I’d like it to be higher because that means that our site was so memorable that people typed it into their browser rather than doing a new search.
Observation #4: Unfriendly “Ghost Clicks”
I’ve observed that not all PPC Ad ghost clicks are friendly. In some cases, they may be competitors doing deep dives on your site for whatever nefarious purposes they have in mind. Here’s my evidence of unfriendly ghost clicks:

Hmmm… Lots of visits all of a sudden from PPC ad ghost clicks. Does not look like a friendly ghost to me.

Why would we, all of a sudden, get hundreds of PPC ad ghost clicks when our campaigns are clearly turned off? My first guess was that someone accidentally turned them on; but no, that wasn’t it. I dug one level deeper in Google Analytics and found that all the clicks were coming, on different days, from different locations.

Who clicks from Beverly Hills, Little Ferry and Trinidad? Jet setter, perhaps?

Using my best TV detective deduction skills to develop a profile of the perp, I see that the clicks come from Beverly Hills, CA and Little Ferry, NJ. Both are pretty affluent suburbs. I also see clicks from Trinidad. Could this be a rich jet-setting venture capitalist trying to discover our secret sauce? If so, I’ll bet they are also reading my column; so to you I say, “I know who you are, and I saw what you did.”
Observation #5: Google Analytics’ Accounting For Paid Search Clicks Is Excellent
I had a weird observation when looking at my paid search clicks versus my analytics data. Google Analytics was reporting 7% more clicks than we actually paid for from all our paid traffic sources. I know that Analytics and AdWords account for clicks differently and that Google Analytics reports clicks (suspicious or otherwise), but I never took notice of how great the difference was.
I ran an AdWords invalid clicks report and subtracted those from my Google Analytics total, and found that the number of clicks from our paid search campaigns matched up almost perfectly (99.1% match) with the clicks Google Analytics reported receiving.
An added surprise was my discovery that Google AdWords continues to credit invalid clicks to the account even after turning off all spend. It wasn’t a large amount, but it was a very pleasant surprise nonetheless to see additions to our account balances.

Questions About The PPC Nuclear Option?

I’ve touched on just a few of my own casual observations from this unplanned PPC nuclear option experiment, but there are so many other observations to be made as we bring this campaign back to life. If you are curious about any part of our experiment, and have questions of your own, please leave a comment below, and I’ll see if we can get an answer for you.

Easily compare your ad performance over time

Which campaigns are down this week? How is my performance this month compared to last month? If you’re like most advertisers, you ask yourself these questions on a regular basis. Over the next few days, we’re rolling out a feature that makes it much easier compare metrics across different time periods by putting the data right in your AdWords tables.

Once “compare dates” is enabled in your date selector, you’ll see a new + button at the top of many columns. Click the + above Clicks, for example, and the Clicks column expands to show you this week’s Clicks, last week’s Clicks, the absolute change and the percent change.

Click to enlarge

This new functionality has been added to many reports across AdWords, on most metrics. All of the additional columns are also sortable and filterable, which makes it easy to answer questions like:

Which campaigns saw the largest increase in clicks?
Which ad groups saw conversions drop by more than 20%
Which keywords saw an increase of at least 100 clicks?

You can also use filters on these columns. This makes it easy, for example, to create a saved filter which finds all campaigns that saw a decrease in clicks of 20% or more:

Click to enlarge

Click to enlarge

Quality Score Explained by former Google Employee

With the continuing expansion of ad space at the top of the page (from ad extensions like sitelinks with descriptions), it’s more important than ever to make sure your ads have a great ad rank. But CPCs are on the rise – so unless you can improve your conversion rate so you can increase bids, Quality Score (QS) optimization may be your only way to maintain a high rank without breaking the bank.
While I’ve been a panelist representing Google in Quality Score sessions at more conferences than I can remember, I’ve been meaning to put together some of my insights on the topic for a broader audience. So, here goes….

The Evolution Of Quality Score

Even if you don’t care much for a history lesson, it may help paint a picture of why QS exists in the first place, and the evolution of factors may give you some insight into what Google cares about.
When I started working at Google in 2002, Quality Score didn’t exist. But what set Google apart from the other PPC ad systems at the time was how they determined if ads were relevant enough to warrant an impression. In addition to having a team of humans reviewing all ads, the system was also monitoring the click-through rate (CTR) of every keyword — if a keyword’s CTR fell below 0.5%, it would become disabled for poor relevance. Google was using the wisdom of the crowds to let its users determine which ads should show and which shouldn’t.
The problem with disabling keywords at an arbitrary CTR level was that advertisers were unhappy to see some of their keywords disabled forever (unless, of course, they knew of the workaround to resubmit the same keyword with different capitalization). So, we started to evolve the system. Instead of disabling keywords, we came up with new statuses like “slowed,” “in trial” and “on hold.”
The idea was to give advertisers a way to fix low-relevance keywords by giving them a small allowance to run ads that were considered poor quality so that they might prove otherwise. We also gave the system more flexibility so there wasn’t a hard cutoff at the 0.5% CTR level. Ultimately, though, most advertisers still saw keywords they really wanted to advertise on get disabled, and they remained displeased.
Google addressed this with the introduction of the minimum bid. Rather than flat out disabling keywords, they asked advertisers to pay more for keywords that had low relevance — the idea being that eventually, it would make no sense for an advertiser to keep paying the high cost-per-click (CPC), and they’d either optimize the relevance or delete the keyword.
In today’s system, the minimum bid has been engulfed by the first page bid, which also takes into account competition. It’s a little harder to see the direct correlation between what you pay and the quality score, but the connection’s definitely there.
Below is an example of where we see the correlation between the average CPC and the QS in our Quality Score Tracker tool.

As the Quality Score starts to increase, the average CPC in this campaign starts to drop.

Quality Score’s Impact On Ad Rank

When Google launched AdWords Select and started to shift from CPM-based pricing to CPC-based pricing, they couldn’t afford to lose all the revenue from their CPM program (which was called AdWords at the time). They were still a pretty small company, and Yahoo/Overture was a formidable competitor. So, to ensure revenue was maximized, they ranked ads in the CPC program according to a very simple rule:
Ad Rank = Max CPC * CTR
If you take a minute to look at this more closely, you’ll quickly see that ad rank is, in fact, equal to CPM or dollars-per-impression. This was the simple but brilliant insight that made AdWords so powerful — advertisers only had to pay when they got clicks, users would see more relevant ads because ads with high CTRs were more likely to appear high in the results, and Google was making as much money as possible from these ads.
The equation for ad rank is a whole lot more complicated these days and now includes thresholds for appearing at the top of the page, landing page factors, and more. But at the heart of it, the original principle still applies: if Google can show more relevant ads, they will get more clicks, have happier users and make more money. And, the key component for achieving this is CTR.
The importance of CTR to Quality Score is a bit like the importance of TF-IDF to SEO. While there are hundreds of factors that go into ranking in paid or organic search, these long-established principles are still some of the most important ones. In the 80/20 rule, these are your 80 percent factors and the first ones you should pay attention to.

Factors Of QS

While I’ve explained that CTR is a main driver in QS, it’s useful to understand how Google thinks about CTR. After all, there are many things that influence the CTR you see in your account such as the device, the network, or the position of your ad on the page. Thus, the average CTR you see in your account is not the CTR Google uses to determine Quality Score.
To make sure advertisers have a level playing field, they evaluate small slices of CTR.
For example, they look at different CTRs by device type so that your performance on mobile won’t affect your performance on desktops. They also have a different CTR they look at for the Display Network and Google Search — a good thing, since CTR on Display is usually much lower, and you wouldn’t want that to hurt your QS for search.
Where possible, they also favor looking at the CTR when the keyword in your account matches the search query exactly (don’t confuse this with the “exact match” keyword match type), and they normalize the CTR based on the number of ads on the page and your ad’s position amongst them.
Furthermore, Google has to make some guesses before they have a statistically significant amount of CTR data for new accounts, new keywords and new ads, and they do this by evaluating the CTR at different levels as explained in the diagram below.

The various levels at which Google evaluates CTR to determine Quality Score.

As you can see, there are 3 levels of CTR evaluation: the account, the keyword and the ad. These CTR elements are all combined into a secret formula and out comes your keyword-level Quality Score and the corresponding number between 1 and 10 that you can see in your account.

How Quality Score Is Set For New Keywords

When a keyword is new in an account, there is not a strong historical element for how the keyword performs with its ad text (factor 3), so the QS is mostly based on system-wide data for that keyword in all other accounts. That gets combined with data for how this particular account and its ads have performed historically. If these elements have good QS, the new keyword is likely to also start off with a better QS.
To give an example, if you have 2 accounts, you should see a lower starting min bid in the account with the better account-level QS. If you have 2 domains, you will see a lower starting min bid when using the domain that has a better QS.
After the system gets enough data about more specific things, like how the keyword performs with the ad you wrote for it, it will rely much more on this to determine the Quality Score. This is why it’s so important to have great account structure and split up your ad groups in a way that allows you to create great performing ad texts for each grouping of tightly related keywords.

Other Relevance Factors

According to Hal Varian, Google’s Chief Economist, QS also considers “relevance” in addition to CTR. But what does that mean? The easiest way to think about this is once again based on click-through rate — but, rather than using CTR to generate the QS number between 1 and 10 that you see for each keyword in your account, it’s used at the time a user does a search to determine if there are any correlations between that user’s search and your ad that could predict the CTR (Google’s Quality Score is a predictive system that tries to predict CTR for each ad and each query). Some examples:

1. Did the user’s search include some additional words, and do those correlate with your ad’s expected chance of getting clicked? E.g., if you have a job website and want to advertise on the keyword [jobs], your ad is probably not relevant when someone searches for “Steve Jobs.”
2. Does the location of the user have any correlation to your predicted CTR? E.g., if your business is in the US and the searcher is in Belgium, perhaps it’s less likely your ad will get the click because the users may prefer a business closer to them.
3. Does the time or day of week influence your predicted CTR? E.g., Google may know that users are less likely to click on your ad on a Tuesday.

These factors let Google assign you a real-time quality score which they can use to better rank your ad for that particular query. There could be many other “relevance factors,” but just know they’re all based on the same principle of trying to predict the likelihood of your ad getting a click based on something Google knows about that specific query.
While the lack of transparency into the factors may be annoying, this relevance component has helped advertisers by automatically giving them more good clicks and fewer bad ones.

Landing Page Quality Score

The landing page is one of the newer factors used for QS. Landing Page Quality (LPQ) started as a way to counteract bad sites that duped users into clicking their ads and hence had a good CTR but a lousy user experience. Now that LPQ can also improve your QS, it’s getting a lot more attention from advertisers (probably more than it warrants).
Remember, the CTR of your ads is still the bigger QS factor and probably the better thing for most advertisers to focus on optimizing. Every now and then, I hear of advertisers who are spending a ton of time creating one landing page per keyword so that the keyword will appear on the page and score a better LPQ. That’s probably overkill — Google is very good at understanding how words are related, so it’s unnecessary to include every variation on the page.
My personal recommendation is to also keep a close eye on bounce rates and time on site, two metrics you can see directly in AdWords when you link it with Analytics. A high bounce rate or very short time on site both provide a great way for you to find keywords that are not relevant in the minds of users.

Optimizing The Right Elements Of Your Account

If you haven’t guessed by now, optimizing Quality Score is really all about optimizing for CTR. The challenge is to optimize for the right CTR. For example, because Google uses position normalization when determining how your CTR impacts your QS, it could very well be that your ad with a 15% CTR in the top position on Google is actually worse than your 3% CTR ad in the last place on the right side of the page.
You should also look at the impression-weighted Quality Score to determine which keywords and ad groups are most in need of an optimization. I shared a script for automating the calculation with AdWords Scripts.

Google Adds Enhanced Campaigns Bid Adjustment Reporting To Google Analytics

Google announced today that Bid Adjustments reports for AdWords enhanced campaigns are now included in Google Analytics.
The reporting, found in the Advertising section under Traffic Sources in Analytics, are designed to help advertisers analyze the performance of each bid adjustment within a campaign — by device, location and time of day.
You’ll notice in the Google-provided screenshot example above, there are columns for Revenue and Ecommerce Conversion Rate in the Summary view. These metrics are available when Ecommerce tracking is enabled in Google Analtyics, allowing you to analyze bid adjustment performance by ROI. However, when you look at your own reporting, you may see that the Summary view only shows goal results and that the columns for Revenue and Ecommerce Conversion Rate appear under the Ecommerce view instead.

The Most Important KPI For A Performance Marketer

Many performance marketers continue to consider click-through rate (CTR) as a key performance indicator of their search campaigns’ effectiveness and evolve their PPC optimization strategy around that.
At the end of the day, what matters most is achieving the best ROI given your business objectives and budget, and you might optimize directly to CTR or ROI or a combination of success metrics to achieve that.
In order to have the best optimization strategy for your SEM campaigns, it is important to understand and quantify the influencers of ROI.

The Two Extreme Optimization Strategies

There are two types of strategies performance marketers consistently use as their campaign optimization strategy:
1)    Optimizing To A CTR Goal
One of the main factors influencing Quality Score (QS) is CTR, which affects your cost-per-click (CPC) and in turn affects your ROI. An increase in QS due to a boost in CTR would lower CPC and improve ROI.

2)  Optimizing To An ROI Goal (Revenue-Per-Click & Cost-Per-Click)
Direct optimization to revenue or a conversion metric is a common strategy amongst performance marketers. Making sure an intelligent bid management is in use will be crucial to your campaign’s success.

While perhaps no marketer purely optimizes to CTR or ROI, they tend to skew towards one of these camps. Each method has its pros and cons. A CTR strategy will get you more clicks but does not guarantee the highest ROI. A purely ROI approach will get you the highest ROI but you potentially lose out on customers early in the sales funnel who might eventually convert.

ROI Breakdown

ROI equals Revenue-Per-Click (RPC) over Cost-Per-Click (CPC). Data analyzed from over two dozen advertisers using econometric methods (a simplified version of the equation is shown below) shows that 34% of ROI is influenced by RPC and 66% by CPC.
Bid management is by far the most important influencer of ROI. Forty-nine percent (49%) of ROI is influenced by bid management, 13% by other factors (i.e., marketplace, seasonality, etc.), and 4% by CTR. The data show the importance of having an intelligent bid management strategy in place for your SEM campaigns. But, does this mean a CTR maximizing strategy is a wasted effort?

A Deeper Dive Into The Relationship Between ROI & CTR

Previous studies have looked at the relationship between CTR & ROI by purely relying on correlations. A correlation analysis alone cannot determine the effects of CTR on ROI, and a more robust statistical technique is required to answer that question. These techniques enable us to control for all the factors that can potentially influence ROI.
From the chart below, we do see a relationship between the CTR & ROI — but not a very strong one.


Applying statistical modeling techniques will allow us to quantify any statistically significant relationship between the two if it exists.
In this model, I control for position, CPC, industry, and bid management differences across the different advertisers in the data in addition to CTR.
The results show that there is a statistically significant relationship between CTR and ROI; but in terms of impact, it’s quite small. For a 10% increase in CTR, expect to see a 1.2% increase in ROI. This means that if you increase your CTR from 10% to 11% for a campaign with an average ROI of $5, the ROI will increase to $5.06 due to the improvements made in CTR.

Key Takeaways For Performance Marketers

• Campaign managers should utilize both strategies above in optimizing their campaigns; main focus should be on ROI but do not completely ignore CTR
• 49% of ROI is influenced by bid management; intelligent bidding is integral to a campaign’s success
• CTR does have a small but statistically significant impact on ROI; a 10% change in CTR affects ROI by 1.2%

In Summary

Focus on optimizing your SEM campaigns for ROI but keep an eye on CTR. There is no need to purely optimize to CTR as it influences only 4% of ROI; but, it is important to account for it in your longer term strategy and make sure healthy CTR rates are met and maintained.
Intelligent bid management heavily influences ROI and is absolutely necessary to ensure your ROI goals are met.

Give your sitelinks additional detail in enhanced campaigns

Ads that provide detail and precision can help people make more informed decisions.  Sitelinks help people find information deeper in your site so they can get to where they want to go faster.   In February 2012, Google improved sitelinks by using text from other ads in your account or My Client Center to create sitelinks with additional detail.  Today, Adwords going one step further by enabling you to nominate specific text for your sitelink descriptions from within your AdWords account.  This will allow you to control the descriptions that display when this sitelink format shows.

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In testing, users have reported that sitelinks with additional detail were more useful and relevant, and clickthrough rates were significantly higher than the same ad with traditional 2- and 3-line sitelinks.

The new sitelink format with additional detail is available only in enhanced campaigns.  Enhanced campaigns enable you to reach people with the right ads in the right context - location, time of day and device type -  without setting up and managing numerous campaigns. All campaigns will be upgraded to enhanced campaigns on July 22nd.

After upgrading to enhanced campaigns, you will have the option of adding extra text to your sitelinks - simply fill out both lines of the "Description" field when creating a new sitelink or editing an existing sitelink.

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Note that your ads won't always show sitelinks, and when they do, the format that appears could vary.

The core guidelines for sitelinks remain the same with these improvements:

• Sitelinks cannot violate the duplicate sitelink URL policy
• Sitelink text cannot use keyword insertion
• Sitelink text cannot be the same as other sitelinks in the same ad group/campaign or the main ad that’s serving
• In addition to this 4 sitelink view, there is also a 2 sitelink variation

Before You Quit Pay-Per-Click, Follow These PPC Tips

The thought of advertising your small business is both exciting and unnerving.  Many business owners are proactive when it comes to marketing their own business, using pay-per-click (PPC) advertising for instant results. When business owners try to handle their own PPC ,  they can spend  hundreds or even thousands of dollars on pay-per-click advertising  only to see little return on their investment.
Before you give up on PPC, consider the common mistakes that business owners make when managing their own advertising campaigns:

1. Having Unrealistic Expectations
2. Not Checking the Terms They are Actually Paying For
3. Not Adding Negative Keywords
4. Creating Ads Without Keyword Relevant Landing Pages

Having Unrealistic Expectations

Small business owners need to be broken out of the traditional advertising mindset.  For years, small business owners advertised on printed media, radio, and television. They are used to seeing and hearing their own ad constantly.  With  PPC advertising,  your ad will not be up 24 hours a day, 7 days a week. Often, business owners will set up a PPC campaign, search their keyword, and not find their ad. When this happens, their first thought is, “Where is my ad? This is not working!” PPC is a lot different than traditional advertising.  You pay for performance.  
There are a few reasons why you might not be seeing your ad:

1. Your ad  might have already been clicked on a few times today. Once you reach your daily budget, your ads will stop running for the rest of that day.
2. You may be targeting too many keywords or not the right keywords.  In general, the more specific the keyword, the better the results. See my post on longtail keywords.
3. Your daily budget may be too small. If your spending less than $10 a day, your budget might not be enough to provide meaningful results.

Not Checking the Keyword Details (Query String Report)

When I have talked to small business owners that manage their own PPC, I was surprised to learn how few people actually use this. The keyword details are the actual search terms that you paid for. You can also think of this as keywords driving traffic.  Lots of valuable information can be found in this report. You can quickly see if you are wasting money or may see opportunities for new keywords. Hands down, this is my #1 PPC tip.
Here is how you can see the query string report:

Click on the keywords tab.

Select all keywords to see every search term that you paid for.

Click on view keyword details.

See which search terms are actually driving traffic. Notice that this list doesn’t exactly match your keyword list. Look for keywords that will never result in new business and add them as a negative keyword.

When you look through this report, you should ask yourself one question- could this search term result in business?
For example,  I was recently looking at a PPC campaign for a maid service company. One of their targeted keywords was “housekeeping.” I looked at the query string report and I saw that she had a lot of traffic coming from people searching for “housekeeping jobs.” The business owner was paying for this traffic and didn’t even know it. I also found something rather amusing.  One of the search terms was “arnold schwarzenegger housekeeper”. I am not sure why a person searching for this ended up clicking on an add for maid service; perhaps it was an accident. Anyways, after I checked the query string report, I added 71 negative keywords to this campaign. One was “jobs” and the other was “arnold schwarzenegger”. with the addition of negative keywords, the business owner does not have to worry about paying for these terms that will won’t result in a sale.

Not Adding Negative Keywords Every Month

This is somewhat repetitive to the step above, but it is so important I wanted to break it out into its own section.  Negative keywords are terms that you don’t want to advertise for.  This is almost as important as choosing the words you do want to advertise for.
Let me illustrate with an example. If you own a carpet cleaning service, you might have “carpet cleaning” and “cleaning service” as keywords. Without negative keywords, someone searching for “window cleaning service” might see your ad and call you to find out that you don’t offer window cleaning.  Not only is this annoying for both the customer and the business owner, it also eats up your PPC budget.
Many small business owners running their own PPC campaigns don’t create a negative keyword list.  PPC platforms like Adwords and adCenter are designed for anyone looking to get started ASAP. There are few requirements in the actual interface. You need a budget, some keywords, and an ad with a landing page.  Because negative keywords are not required, most small business owners don’t set them up. Adding negative keywords will make your campaign much more effective by spending your budget only on keywords that will drive  new business.

Creating Ads Without Keyword Relevant Landing Pages

One of the biggest mistakes is not having the actual keyword you are targeting on your landing page. For example, say you are an HVAC company. You have a home page that talks about your company with some marketing language about “why choose us.”  You want to advertise your business when people search for “Water Heater Repair In Houston,” but no where on your home page do you have those keywords in that order. This is like shooting yourself in the foot. If you want to get results for this keyword, this is how you should up your campaign:

1. Sign into Adwords and create a campaign. Set your daily budget and target your ads to be shown in Houston.
2. Create an ad group called water heater repair.
3. Add keywords specifically about water heater repair (water heater service, water heater not working, broken water heater, etc.)
4. Add negative keywords related to this service (jobs, etc)
5. Create ads specifically about water heater repair.
6. Create a landing page specifically about water heater repair using the keywords from step 3.

Follow the above tips to get the most out of  your PPC, increase conversions, and drive potential customers to your website. You’ll enjoy the boost to your bottom line that a properly executed PPC campaign can create!

New Upgrade Center For Enhanced Campaigns Lets Advertisers Do Bulk Upgrades & More

Google AdWords is rolling-out a new upgrade center today for advertisers using Enhanced Campaigns. Accessible from the left-hand nav bar on the Campaigns tab, the upgrade center lets advertisers managing several campaigns perform bulk upgrades to multiple campaigns simultaneously and merge selected campaigns in a few simple steps.

The bulk upgrade feature allows advertisers to select multiple campaigns, choose a mobile bid adjustment, view traffic estimates and upgrade their Enhanced Campaigns with fewer clicks, making it easy to upgrade individual campaigns all at once.
The upgrade center also identifies search-only or search+display campaigns that have similar keywords and location targets, and offers a preview of possible campaigns that could be merged. Advertisers can then adjust the proposed settings, ad groups and extensions for merged campaigns.

Google notes that ad groups and budgets will be combined by default, and any campaign level settings and extensions in the Primary campaign will override Secondary campaign settings and extensions.
According the Inside Adwords blog, the upgrade center will roll-out to advertisers over the next few weeks.

How To Determine Your Hourly Bid Multipliers In AdWords

While hourly bid multipliers aren’t new, they remain a crucial tactic for optimizing your AdWords campaigns. They work by reducing your ad spend at poor-performing times of the week and increasing your exposure at the best times of the week. Here, I’m going to share the steps you can take (along with a helpful spreadsheet) to determine your hourly bid multipliers for better campaign optimization.

Step 1: Pulling An Hourly Performance Report From AdWords

On the Campaigns tab in AdWords, go to Columns>Customize Columns and ensure that you’ve selected the appropriate metrics. Performance metrics required for the spreadsheet to function properly are as follows: Campaign, Clicks, Impressions, Cost, Avg Pos, and Conv (1-per-click) — all other metrics selected in the screenshot below are optional:

Once your performance metrics have been selected, hit the “Download Report” button. When prompted, add the “Day of the week” and “Hour of day” segments:

This should provide you with all the data you need to analyze hourly performance at the campaign level.

Step 2: Determining Hourly Bid Multipliers

Similar to the template used to determine mobile and geo bid multipliers, I’ve created a basic spreadsheet to help analyze hourly performance and easily determine your hourly bid multipliers. You can download it here.
Copy and paste your AdWords report into this spreadsheet as directed. From here, you can take a closer look at the following:
a. Performance By Day Of Week

b. Performance By Hour

c. Performance By Hour & Day Of Week

If you have collected enough hourly data for each day of the week, you should absolutely make bid adjustments on an hourly basis. This process can be time consuming, as it requires making adjustments on a very granular level, but the results are well worth it.
For those times with less traffic, you can still leverage daily and/or hourly trends. For instance, looking at campaign #43 in the attached spreadsheet, it appears that there was not enough data collected on Sundays from 4:00 am to 5:00 am to make a specific bid multiplier suggestion — but you might still want to increase the bids, since the data indicate that both Sundays and the 4:00 am to 5:00 am window perform well in general.
The attached spreadsheet will only address those times of the week with sufficient hourly data, while keeping in mind that “bid adjustments for locations, days, times, and any ad group-level targeting methods can be set from -90% to +900%.” Thus, it can help you to determine relevant hourly bid multipliers between -90% and +900% when there are a statistically significant number of clicks:

Step 3: Implement Hourly Bid Multipliers In AdWords

At the campaign level, navigate to the “Settings” tab; then, go to the “Ad schedule” section. The first step is to specify when you want to make bid changes. Select a day of the week from the drop-down menu:

From there, you can you can adjust the effective hourly bid multipliers, as calculated by the spreadsheet:

Conclusion

All of this is fairly straight-forward; however, your hourly bid multipliers need to be maintained over time, hence the importance of a (semi-)automated process. Also, keep in mind that once set in AdWords, those hourly bid changes do not take into account multiple time zones. For instance, if your AdWords account is set to “(GMT-08:00) Pacific Time,” and you want to increase the bids by 20% at 1 pm, then these bid changes will occur at 1 pm PST across all PST/MST/CST/EST locations. As a result, it makes sense to break down your top campaigns by time zone in order to set more accurate hourly bids.

How To Manage PPC Closely To A Budget

A few weeks ago, at SMX West in San Jose, George Michie of RKG, was talking about the challenges of managing enterprise-level PPC campaigns, and he made the interesting observation that you can either manage to ROI or to budgets, but not both at the same time.
The context of George’s remarks was setting expectations with client C-Level executives and educating them about what is and what is not possible with online marketing campaigns.

Maximizing PPC ad spend and managing to best ROI are usually conflicting goals.

ROI Targeting Differs From Budget Targeting

The reason these two goals are generally incompatible is that ROI targeting takes the dynamics of the auction into account and lets the ROI dictate the amount of ad spend. Spend rises and falls based on your ability to deliver profitable results. When you are told you must spend to a specific budget, your budget actually influences the dynamics of the auction and your ability to optimize CPAs.
For example, if you are given an extra $100K and told to spend it this month, you only have a few options available to you in the short term. You can increase bids to get more traffic from higher positioning; but, you’ll pay more for that traffic. You can also allow more budget to flow to your marginal campaigns, which also degrades your ROI.
If on the other hand, your budget is constrained, then you are forced to make decisions like advertising only on your brand terms, slowing down the pace of your ad serving by using standard ad delivery, or simply letting your campaigns run out of money before the end of the month, allowing your competitors to reap the benefits of your dropping out of the auction.
I think that most SEM pros and corporate CEOs would agree that managing PPC campaigns to ROI targets with unconstrained budgets is the ideal budgeting scenario. Common sense seems to suggest that if your paid search campaigns are improving both revenues and profits, you would want to spend as much as you can to keep the good times rolling.
Unfortunately, the reality (and unreality) of corporate accounting and planning structures often dictates that short-term budget targets are cast-in-concrete and to be met at all costs, regardless of business results. In this environment, missing your budget either by under-spending or over-spending is an undesirable outcome, and draws unwanted (and often unwarranted) attention to your campaign management prowess.
So, unless you are one of the lucky PPC managers with unlimited budget as long as you hit ROI targets, or you have the bravado to ignore budgets to prove your management machismo, your best bet is to come in right on the mark.

Staying Within Range Of Your Target Budget

I generally worry about three things when it comes to managing monthly budget targets: (1) going over budget, (2) getting too far under budget and (3) Blowing through our budget before the end of the month. Of these worries, preventing over-spend is probably the easiest problem to avoid.
Preventing Over-Spend
If we are severely budget-limited, taking the campaigns offline when the budget is exhausted is the certainly the easiest option. I don’t prefer doing this because it seems so contrary to common business sense.
However, I have also found that nothing is more motivating to clients than the thought of their competitors gaining advantage by having the search results pages all to themselves! So, sometimes this option works well to free up more funding for paid search.
Going Over Budget
To prevent campaigns from going over budget, the first line of defense is to use the budget settings within Google AdWords and Microsoft Bing Ads.

Bing Ads: Bing Ads allows you to set monthly or daily budgets for your campaigns. If you choose to set monthly budgets, Bing Ads will show your ads whenever they qualify for an auction and then pause them when your monthly budget is exhausted. Alternatively, you can also use Bing Ad’s daily budgeting feature to spread your ad spend across the entire month.

For example, if your monthly budget is $3,000 for a month with 30 days, setting your daily budget to $100 will ensure that your ads show every day. With daily budgeting, you can also set the ad delivery to either standard or accelerated pacing. Standard delivery means Bing will pace the delivery of your ads so that they show throughout the day based on your budget. Accelerated delivery means your ads will show in all eligible auctions until your daily budget runs out.

Google Ad Words: In AdWords, you can’t set a monthly budget directly. Instead, Google calculates an effective monthly budget based on your daily budget setting. AdWords multiplies your daily budget by 30.4 (the average number of days in a month) and uses that value as your monthly maximum spend.

During the month, your AdWords spend may vary, exceeding the daily limit by as much as 20%; but at the end of the month, your budget will not exceed your target ad spend. So, for example, if your daily budget is $100 per day, then your total monthly maximum spend will not exceed $3040. You can also share a budget across some or all of your campaigns to ensure your whole account stays within limits.

Under Spending
Under spending budget is also one of my budgeting worries, and it is a tough one to manage if you get behind. Under spending can happen for a number of reasons: inattention to campaigns, ads that have been suddenly disapproved, another big competitor has entered your space and is eating into your search click volume, or your client suddenly decides they need to dump a lot more funding into your campaigns in the middle of the month.
In big corporations, this tends to happen at the end of fiscal quarters or the end of fiscal years. While no one ever likes to turn down additional budget, dealing with a huge budget bump can be very tricky in the short term.

Tracking Daily Spend

When hitting budget numbers becomes an overriding requirement, it is important to keep a very close eye where we are relative to the target monthly spend and make bid and budget adjustments daily. The challenge is knowing how big or small the adjustments should be, because every day of the week has its own traffic and ad spending profile that needs to be taken into account.
For this reason, we like to take day-of-week spending patterns into account when making adjustments.

PPC Ad Spend Weighted by Day of Week helps inform bid and budget decisions.

The above chart shows two curves. The orange curve shows the average daily spend we need to achieve in order to reach our month end target, somewhere around $325 per day. The second curve, the blue one, shows a spending plan weighted by day of week based on our typical intra-weekly spend patterns.
We developed the curve below simply by taking the daily profile of the last five or six weeks of ad performance, and weighting the ad spend based on how individual days of the week perform as percentage of the entire week’s ad spend. As you see, there is a big difference between Sunday and Monday average ad spending:

Each day of the week has its own ad spend profile.

Using a weighted average can make a big difference in the adjustments you make to your bid and budget allocations day-by-day compared with using a straight line average. For example, when your month begins on a Thursday, and you come in on Monday morning, you’ll see that your daily ad spend might look like this:

Daily PPC Spend plans – weighted versus straight line average.

If you are comparing your actual ad spend against the orange straight-line average target spend curve, you may be  inclined to make a much bigger set of adjustments than if you were comparing things to the weighted average. The weighted average curve looks very similar to your actual ad spend, so you would probably make smaller adjustments.
When we work from a weighted average in managing closely to monthly budgets, we find we are less likely to make yo-yo adjustments – too aggressive one day, and too aggressive in the opposite direction the next.
In general, it is always preferable to work to ROI targets and allow ad spend to drift up and down as market efficiencies dictate. However, if you are required to also keep close to your budget targets, it’s a good idea to keep track of where you are relative to your strict monthly budget goals on a daily basis.