Radically Increase the Efficiency of Your Paid Search Campaigns by Removing Budget Caps
Hello, my name is Charles Lumpkin. I appreciate you spending some time with me today. Were going to talk about, probably, one of the most common mistakes that I see. And I see it all the time. It’s that you have budget caps on your campaigns.
So, what is a budget cap? That means, hey, on this particular campaign I only want to spend $100/day. And then you look back historically and everyday it hits $100. This is a terribly inefficient thing to do in your campaigns.
What you actually want to do – and don’t get scared, people get scared when I say this – is set your campaign budget to $500/day or $1000/day. Something that you couldn’t possibly hit. Now, why won’t you hit them? It’s because you are actually going to adjust the bids on your phrases down significantly. You actually don’t want to hit the $100/day. What you want to do is adjust your bids downward so you are getting more clicks for the $100.
So, think about it. Let’s say you are spending $1/click and by noon you are out. The other way to do it is to not put the budget caps on the campaign, set it to $500 a day. And you set your bids to $0.25/click. Then you run the entire day at $0.25/click. And guess what? You got 200 or 300 clicks for $75 or $50 bucks – less than the $100 that you spent to get 100 clicks. And that’s the crucial thing to understand. Don’t budget cap your campaigns.
My name is Charles Lumpkin and you can find more of me at CharlesLumpkin.com.
Allison October 27, 2009
That makes sense. Honestly, I never knew this, but I will use this tip for sure. I have to handle the campaign budget for the chain of retail stores I work for. Good video. Will tune in for the others. Thanks!
Adam October 28, 2009
If you are managing your campaign to a ROAS then do you even need daily budget caps? Maybe to prevent Google from changing something and running up your account without you knowing… sounds like something they would do.