Google Ads and budgets

VillainousRaccoon

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Mar 15, 2021
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Need help setting out budgets for google ads, my company wants to run keyword-based ads and we have never done this before.

I've looked through the google documentation and I roughly know basic concepts (short tailed, long tailed keywords etc.) but I also know that google SEM is exorbitantly expensive and I'm worried about what I can do to reduce costs or make it economical.
 

fisicx

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Depends on what you are selling and to whom.

You can run successful campaigns for £10/day or you can spent £50/click.
 
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One of the most common ways people waste money using Google Ads is by not having conversion tracking set up so that the value of the click is not quantified.

£1 per click can be more expensive than £10 per click if you don't know what you're getting back from your £1 (other than a website visit).

If you don't have online sales to track, make sure you are tracking something useful such as form submissions, calls, emails, downloads, sign-ups etc.

The second most common reason for wastage - that I see - is a poorly structured account eg having only 1 ad group with, say, 300 broad match keywords in it.

If you want to maximise control you might consider using SKAGs - single keyword ad groups, containing only exact match or phrase match keywords.
 
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makeusvisible

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    To give some context to my answer below, and for transparency, I'm replying from the perspective of a digital agency owner.

    Ok, firstly, no disrespect meant in any way. But my advice is don't run a Google Ads campaign yourself. You have already indicated that your not fully knowledgeable about it.

    I have worked in the digital marketing sector for 10 years. I personally wouldn't dream of running a Google Ads campaign for myself or for a client, and I'm exposed to it every day.

    The reason; it's simply too complex a beast.

    I work in the same room as a colleague who manages our client Google Ads accounts. The way Google Ads works is changing constantly, and unless you are constantly researching, and learning, you cannot have a full handle on the capabilities of the systems, nor the potential pitfalls. Google Ads is designed to get you spending money. I know of no quicker way to leak cash than Google ads, other than standing at a petrol pump with your fist clenched.

    Over the years we have managed some hugely successful campaigns and still do. But I have heard literally hundreds of people come to us to discuss marketing over the past decade, who have said "google ads doesn't work". Those people had one thing in common....they had tried to do it themselves.

    That's not to say Google Ads can work for everyone, it isn't the right fit for every business. Leading onto your question about the budget;

    A Google Ads campaign (in fact almost any digital campaign) will never work month one, in the same way as it will month 2, 3, 6 etc. From month one you should have a target cost per conversion.... how much money are you willing to spend for every sale/lead generated. This is your target CPA.

    Your goal, is to reach that target CPA. So for example, if you set your target CPA at £50, and the average click is costing £1, that means that for every 100 people for click on your Ad, you need to generate 2 conversions.

    An ad campaign can only be improved by using data. So lets say in the example above your budget was £1,000 per month. That means you generated 1000 visits. You can now drill into the data, and look at which keywords generated the clicks, and which ads. You then need to analyse which keywords are converting the best. For example;

    Someone typing in "cheap diamonds" may convert at 20%, and someone typing in "buy diamonds" at 1%.

    To make decisions on which keywords are working, you of course need volume. You cannot even think about percentages, until you have several hundred visits, and the nature of PPC, those visits, and thus the data is going to cost you £.

    So in terms of budget, think about how much the average click costs in your sector, and then think about how many clicks you need in order to make rational judgments on the performance of specific keywords, ads and of course landing page of your website. A budget too low, and you won't have volume enough to make those decisions.

    Remember also with the above there are multiple streams of Google Ads. Above I am talking predominantly about Text Ads. A well-run campaign will also incorporate display ads, possibly shopping ads, and a remarketing campaign.

    To answer your original question; how can you reduce cost; You can reduce cost in the long run by investing in a properly run campaign initially, having solid conversion tracking, and ensuring you have the tools in place to measure performance, and the skill set in place to ensure that the campaign is adjusted based on data not intuition.

    Hope that helps.
     
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    There’s some useful advice above, but before you get into keywords, bids and budgets you need to think through a few things...

    What is the purpose of your advertising campaign? Is it to..

    - bring traffic to your website (national or local brand, product or service awareness)
    - sell a product, service or subscription off the site (Ecommerce)
    - collect customer details (contact forms)
    - generate leads (enquiry forms, telephone calls)
    - encourage footfall (eg. to stores or restaurants)
    - a combination of these things
    The purpose will determine the type of advertising campaign you run (Search, Shopping, Display, Video) which will impact costs and budget.

    How will you measure success ? eg...

    - number of website visitors
    - volume of sales
    - value of sales
    - number of leads
    - number of bookings
    If you don’t/can’t measure ‘conversions’ (an action arising from your campaign that you want to be taken) you’ll have no idea whether it’s working or not. Some conversions are relatively easy to track (eg. with code on a website), some harder (eg. telephone enquiries) but most are possible.

    How do you value a conversion ?

    Aside from simple traffic volume (awareness) you need to assign a monetary value to each conversion action. Sometimes it’s straightforward (eg. an ecommerce sale) but for other types of conversion you might need to calculate and assign a...

    - nominal value
    - average value
    - lifetime value
    Even an arbitrary conversion value helps you understand whether your campaign (down to keyword level) is producing an acceptable return.

    Finally...

    Make sure the place your campaign is driving visitors to (website/call-centre/customer service) is fit for purpose.

    Ok – now you’ve done the easy part!
     
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    UKSBD

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    Finally...

    Make sure the place your campaign is driving visitors to (website/call-centre/customer service) is fit for purpose.

    Ok – now you’ve done the easy part!

    finally - and importantly

    There is a reason why a well organised lead generation type company can make money on Adwords when a small local business can't

    Small local business may get 10 leads from an ad but only be able to service 2 or 3 of them.

    Well organised system will ensure all enquiries can be serviced by having someone to provide the service or by outsourcing it elsewhere and not wasting a click.
     
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    Paul Carmen

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    This should be part of a marketing plan, as posters above have already said there are loads of elements to consider. Effectively, if you don't have a marketing plan, and an activation strategy based on this plan, then you're doing this the wrong way round.

    There's so much more than just keyword type and budget; if you don't understand match types (Google are dropping broad match modifier and phrase match now behaves in much the same way), negative keywords and buying intent, you will waste most of your budget.

    If you don't understand how to carry out relevant research to get a proper plan in place; e.g. customer, market, product, keyword etc, then you're likely to waste a lot of their money. You should discuss getting professional advice and quotes like you would with any other specialist work that's not the core business of your company.
     
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    Is it true that some of the competitors can abuse these ads in organic searches wherein they can easily abuse the clicks with the competitors ads and wasted all the consumable fund within the ad?

    There's nothing to stop competitors from clicking on your ads. In theory, Google should identify multiple clicks from the same source and classify them as 'invalid' (ie. you don't pay for them). How well they achieve this is a matter of debate.

    More dangerous is running a display campaign where people may be paid to click on ads. Typically the 'clicker' visits one or two pages for just a few seconds before leaving.

    <rant>The worst offender for wasting your Ads budget is Google themselves. On the pretext of preserving user privacy they're making it harder and harder for you to monitor keyword performance and eliminate unwanted clicks.</rant>
     
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    Shaun Gambit

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    Is it true that some of the competitors can abuse these ads in organic searches wherein they can easily abuse the clicks with the competitors ads and wasted all the consumable fund within the ad?

    Technically they can do this but Google does have spam filters. Also by clicking on your ad they inadvertently increase your click through rate, which should result in a better quality score. This means you could actually end up paying less per click for your ads over the long term, which actually helps you. I guess it also depends on how they do this, but them just searching and clicking will either be filtered out or help your click through rate. You can actually check your Google analytics account and see how many different people visit your site vs the number of adwords clicks.
     
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    Shaun Gambit

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    May 17, 2021
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    You need to make sure your online footprint is 100% before you start running ads. If it's not you are wasting your money

    I don't know about 100%, sure you should make sure its decent before you start but 100% isn't always viable or possible from the start. Also the more data you have the better you're going to be able to optimise, and you don't want to wait months before you can start collecting that data. Fail fast, learn faster...
     
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    Technically they can do this but Google does have spam filters. Also by clicking on your ad they inadvertently increase your click through rate, which should result in a better quality score. This means you could actually end up paying less per click for your ads over the long term, which actually helps you. I guess it also depends on how they do this, but them just searching and clicking will either be filtered out or help your click through rate. You can actually check your Google analytics account and see how many different people visit your site vs the number of adwords clicks.

    I'm sorry but this is all wrong and should be ignored.
     
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    Shaun Gambit

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    May 17, 2021
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    I'm sorry but this is all wrong and should be ignored.

    Unfortunately I can't post links yet, so just Google 'Google's ad fraud prevention' and you'll find info on how they protect against click fraud.

    Then Google 'Quality score factors wordstream' and you'll get an article detailing that one of the highest contributing factors is click through rate.

    I also did say it depends on how it done, and the assumption is that most competitors will just just try and manually click on your ads every now and then, which can and will increase your quality score if they do it without triggering a spam filter. The assumption is based on the fact that most competitors don't know black hat techniques and/or bots, or wouldn't hire someone to do it.

    So you say it's all wrong, but maybe you want to be more specific?
     
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    Shaun Gambit

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    No - I'm quite happy for you to tell your clients that click fraud is good for them.

    So firstly thanks for acknowledging that my post is in fact accurate, albeit through sarcasm.

    Secondly, I never said that ad fraud was good. I did however imply that in most sittuations your competitors would only manually click on your ads in fairly small volumes, and that this is negated through a self correcting system governed by the fundamental mechanics of quality score.

    If however they did not keep it to a small scale Google would pick it up as ad fraud. Also if they are worried about it, they can check Google analytics and see if it is a real problem.

    Unlike your advice which basically says they can't detect click fraud well, and in fact they waste more of your budget through privacy rules than click fraud ever will - way to keep clients informed, surprised they even want to use Google Ads after that advice
     
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    fisicx

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    So firstly thanks for acknowledging that my post is in fact accurate, albeit through sarcasm.
    He didn't acknowledge any such thing.

    Google is really bad at detecting click fraud. If your competitors click on your ad google won't know it's fraud and it won't help your quality score. Don't know where you got the idea that it does but you are wrong.
     
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    Shaun Gambit

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    May 17, 2021
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    He didn't acknowledge any such thing.

    It's called sarcasm, and I apologies it seems to dilute my point so I won't use it again.

    Let me reiterate:

    Firstly Google is not bad at picking up ad fraud, in fact they have better systems in place than most. Just do a quick Google for phrases like "google ad fraud prevention" and you'll quickly find that many authorities on the subject like Wordstream.com for example agree. Google is amazing at detecting many kinds of spam, the reason that they are the largest search engine in the world. They are able to keep their results in good shape despite black hatters trying to hack the system and rank organically for all kinds of spammy websites.

    Secondly when we talk about ad fraud, it happens either on a large scale or a small scale. When it happens on a large scale it is much easier to identify (usually these appear as invalid clicks in your Google Ads account), so this is less likely to impact the average small business.

    The case that I am saying is most likely is when it happens on a small scale, so if a competitor casually clicks on your ads at random times over a period in order to use up your ad budget. This scenario is much more likely than the large scale ad fraud mentioned before, and is the most likely situation to not be picked up by Google as invalid click activity (because the behavior seems more natural than if you tried this with a service or software).

    Now in the case of this small scale ad fraud, it really sucks that it does use up your budget (and it's not a good thing). But a little known or thought of mechanic (even if it's a bit controversial) is that it improves your click through rate (% of times an ad is clicked on vs it appearing - just making sure you know - sorry I said I wouldn't but couldn't help it).

    If you deny that a competitor clicking on your ads improves your click through rate then I understand why you're having an issue with this. The concept is that if a competitor performs a search, your ad appears and they click on it = higher % CTR - simple concept. This all happens under the assumption (again) that it is on a low volume and has a much more natural behavior pattern than a full scale black hat click fraud attack and so will not be picked up as click fraud.

    Now we get to the second part of the logic: Click through rate is one of the highest contributing factors for improving your quality score. The reason for this is that if you user performs a search, and then clicks on your ad it gives Google a signal that your ad was relevant to their search. Relevance being the aim of the game from a search perspective, again something that greatly contributes to the success of Google as a search engine. This is very well known and documented, you really just have to search for anything to do with quality score and you will find loads of information.

    Let's bring this home: If a competitor clicks on your ad, it results in a higher click through rate than if they did not click on your ad (again, at low volumes). If higher click through rate improves your quality score. Then bringing these two concepts together proves my point. Unless somehow I've missed something completely obvious...?

    I mean how (assuming it is not picked up as click fraud) would it be possible for a competitor to click on your ad and up your CTR, but then have this disregarded by Google when trying to determine your quality score?

    If you would like to explain where I've gone wrong, please do say. Also it doesn't help just dropping a one liner "you're wrong", it would be great if you could support your view with external information as I have.

    I honestly thought that these forums were for learning, giving advice and discussions. Seems like they are more about opinion and speculation. I make a controversial but accurate point, then I get shot down because two of you disagree even though you've probably never even though about it longer than it took you to write your message.
     
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    fisicx

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    You specifically said a competitor clicking on your ads should improve your quality score. This is the part everyone disagrees with. Google does mention CTR but is very careful not to say more clicks means a higher score. With Google it's more often what they don't say that is more important.

    How about an experiment. You set up an advert with a £10 budget and publish your quality score. We all click on the advert until the money runs out and you show us the increased quality score.
     
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    The problem here is that you’ve taken a piece of logic, (more clicks equals a higher CTR), combined it with an assumption (a higher CTR equals a better Quality Score) and presented your conclusion as a universal truth.

    The flaw lies in the assumption. No-one is saying that CTR isn’t a factor in quality score, but no-one except you (and ‘no-one’ includes Google) proposes a direct link between the two – that is, as your CTR goes up, so will your QS.

    The obvious contradiction is when you have a QS of 10 for a particular keyword. No amount of clicking will increase that. Conversely, you can have a CTR of 50% or more but if your Ad Relevance and Landing Page experience are rubbish, your QS will stay down and no amount of clicking will change it.

    The real puzzler (as Larry Kim of Wordstream comments) is when you have great CTR, Ad relevance and Landing Page experience and the QS is still low.

    In short, the devil is in the detail of implementation and your rather simplistic connection of two thinly-related variables is misleading.

    And now, methinks it's time to move on.
     
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    Shaun Gambit

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    but no-one except you (and ‘no-one’ includes Google) proposes a direct link between the two – that is, as your CTR goes up, so will your QS

    Like litterally point number 3 from the Google support pages: "support.google dot com /google-ads/answer/6167130?hl=en" is "Try to improve your click through rate"

    Unless your definition of 'a direct link between the two' isn't the same as mine the above post from Google contradicts what you said, cos if anything it's me and Google :)

    But I agree 100%, you should move on it's past boring now
     
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    Shaun Gambit

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    May 17, 2021
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    You specifically said a competitor clicking on your ads should improve your quality score. This is the part everyone disagrees with. Google does mention CTR but is very careful not to say more clicks means a higher score. With Google it's more often what they don't say that is more important.

    How about an experiment. You set up an advert with a £10 budget and publish your quality score. We all click on the advert until the money runs out and you show us the increased quality score.

    I actually said that a competitor clicking on your ads inadvertently increases your CTR, which should result in a better quality score.

    I like the idea of an experiment, maybe a bit more scientific than you propose but it would be fun and the results might prove interesting.
     
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    Shaun Gambit

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    And just for interest sakes, here's an article done by Wordstream on the relationship between CTR and QS. It a bit old but should still be relevant and a fun read: www wordstream dot com /blog/ws/2015/03/23/quality-score-ctr#:~:text=If%20you%20look%20at%20a,impact%20on%20your%20Quality%20Score

    (Sorry I still can't post links, will get there)
     
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    fisicx

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    Like litterally point number 3 from the Google support pages: "support.google dot com /google-ads/answer/6167130?hl=en" is "Try to improve your click through rate"

    Unless your definition of 'a direct link between the two' isn't the same as mine the above post from Google contradicts what you said, cos if anything it's me and Google :)

    But I agree 100%, you should move on it's past boring now
    Read the whole article. They say ‘estimated CTR’ is used in the QS. It’s Google’s normal weasly way of twisting things. It’s because they know about click fraud and competitors using up your budget and know you can’t use actual CTR.
     
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    AnushDas

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    May 20, 2021
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    Need help setting out budgets for google ads, my company wants to run keyword-based ads and we have never done this before.

    I've looked through the google documentation and I roughly know basic concepts (short tailed, long tailed keywords etc.) but I also know that google SEM is exorbitantly expensive and I'm worried about what I can do to reduce costs or make it economical.

    Hi, You can easily go for making unpaid traffic by designing your page well and writing attractive blog posts, content. I still understand that you need to generate more for the company. Then make a successful global campaigns for $10/day or $20/day.
     
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    B

    BeyondTheIllusion

    Have a think of this

    1. What are you selling?
    2. Use keywords that show intent to buy. For example " Garden mower" "best garden mower 2021" "garden mower free delivery" "garden mower reviews" "Garden mower repair" Some of those show no intent to buy.
    3. Your ad copy needs to flow, so when they click the link and see your site, they see exactly what they are looking for. You don't want them to have to look for it.
    4. Work out how many clicks you need for a purchase...is there enough profit for you?
    5. And remember, people often need to see your brand several times before they buy, so a bit of re-targeting will help you
     
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    Joy Qurey

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    Jun 1, 2021
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    Need help setting out budgets for google ads, my company wants to run keyword-based ads and we have never done this before.

    I've looked through the google documentation and I roughly know basic concepts (short tailed, long tailed keywords etc.) but I also know that google SEM is exorbitantly expensive and I'm worried about what I can do to reduce costs or make it economical.
    HI, I m also new to SEO . Please let me know the same after
     
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