A paid search campaign is an integral part of most marketing strategies in the modern world. With so many different platforms to pay for advertising, it is imperative to have an understanding of how they work.
Google AdWords is one of the most popular platforms for launching a paid search campaign. AdWords allows you to set a daily budget and invest in keywords that trigger an ad display on Google search results pages.
As you invest in more keywords and increase your daily budget, you will spend more money on ads. This can potentially lead to wasted spending if not monitored properly.
By using tools to track your AdWords spending, however, you can keep within a reasonable budget while still achieving the desired advertising effectiveness. This article will discuss how to monitor your AdWords spending to prevent excessive spending.
You will earn more from your ads
If you consistently spend your full budget in a day, Google will raise the price of your ads to try to discourage you from spending your full budget every day. This is called price suppression.
Google does this because they want to make money off of you-they are not altruistic organizations. If you continue to spend your full daily budget, Google will eventually raise the prices so high that you will not be able to afford them.
This is a way for them to control how many ads are served and how much advertisers spend on their platform. By curtailing the amount spent per day, they can maintain lower prices.
There is no real way to avoid this other than to manage your spending.
You will see a decrease in the cost-per-click (CPC)
As Google continues to reward advertisers who use their advertising budget consistently and efficiently, less expensive ads will appear more often. This is a big deal, as it will lead to more clicks for advertisers!
As the cost of advertising continues to rise, this will be a major advantage for advertisers. Google Adwords is not going to allow expensive ads to be clicked on if they are not effective.
There have been reports of Google Adwords limiting the amount of daily ad spend for accounts that overspend for extended periods of time. This is done to ensure the effectiveness of advertising and prevent spammers from taking over the platform.
These two features that limit spending on the platform will only continue to improve advertising and remove poor performers. It will also likely continue to lower CPCs as better-performing ads are rewarded.
Your ad impressions will increase
When your ad is predicted to meet its budget, Google will increase the number of ad impressions to keep up with demand. This is called increasing exposure through increased supply.
Because Google wants to meet their daily target for income, they will pull ads that are overbudget and replace them with newer ads that want more exposure.
This means that even if your ad is performing well, it could be taken off the screen due to this fact. Since there are now more ads competing for space, your ad may appear less often due to this.
You can either choose to pay more per click so that your ad stays on the screen longer, or you can lower your daily budget so that your ad does not overshoot and get taken off the screen.
Your ads will become more visible
As your campaign continues to meet its daily budget, Google will increase the cost per click it charges you. This is known as increasing the bid amount.
As your bid increases, so does the impression amount and click rate. This means that even though you are paying more per click, more people are clicking on your ad because it appears more often and is more prominent.
Because of this, Google will require you to increase your daily budget to keep up with the increased cost per click and impression amount. If you do not do this, your campaign will no longer meet its goal and will be paused.
It is important to keep an eye on your campaign’s performance so that you can consistently meet the new required daily budgets.
You may see a decrease in your click-through-rate (CTR)
As advertisers increase their spending, the amount they are required to pay per click increases. This means that in order to keep spending the same amount, the cost-per-click must go up.
Google’s algorithms use this fact to control advertiser spend. As prices increase, Google will require advertisers to meet a higher engagement benchmark in order to pay that price.
By requiring higher engagement, Google is reducing the chance of wasted spend. Waste can come in the form of clicks that do not convert or do not bring value to the advertiser.
By decreasing your average click-through-rate, your ads will cost more per click in order to meet Google’s required engagement levels. This can lead to an overall increase in spending depending on the campaign.
Your campaign may take longer to finish
If your campaign consistently meets its daily budget, your campaign will run longer. This is because Google algorithms recognize that your ads are being served to audiences that want them.
As a result, Google gives you more opportunities to place your ad on pages it thinks are relevant to what you’re advertising for.
Because of this, Google awards you with more credits called “cost per impression” (CPI). This is the average cost of one ad impression on Google.
By giving you more impressions at a lower cost, Google is effectively giving you a free boost in campaign effectiveness. More exposure leads to more potential customers!
However, there is a limit to how long a campaign can run before finishing. This is due to the amount of available advertising space on platforms such as Facebook or Google.
