Budget Constrained Google Ads

Bob Dumouchel

Budget Constrained Search Campaigns

Tell ‘em what you’re going to tell ‘em

Budget-constrained Search campaigns are one of the most common problems in Google Ads. There are many signals indicating you have this issue. Google thinks this is so important that you cannot even remove the notice. This is because Google really wants you to fix this problem by increasing your budget. We think there is a smarter way to handle this problem and it certainly does not align with Google’s solution.

Assess the Opportunity – Tell ‘em

Almost every account has the same keyword mix challenge. I like to divide keywords into classes and here are the definitions:

A = Top 5% of words

B = Next 15% of words

C = All the rest
The problem with A words is that there is never enough volume and they are costly because your competitors likely use them as well. B Words are a much higher volume with lower, but still fierce, competition. C Words are all the rest and they create value but at much lower levels than A & B. The chart to the left is a graphic of what this looks like.

How Google Wants You To Solve ThisRaise your Budget

Google’s solution to this problem is that you should spend more money. Let’s just say that our goals align with yours and are very different from Google’s goals. We want to spend less and get more. We want to spend more only if the CPA (Cost per acquisition) goal is being met. If that aligns with your goals then we wrote this article for you.

Keyword Parts & Pieces

A Words always follow the format with a subject followed by intent followed by a qualifier. Here is what that looks like:

Google Ads Expert San Luis Obispo

“Google Ads” is the keyword subject “Expert” is the intent, expressing what the person is seeking and “San Luis Obispo” is the qualifier. If we get this search, it’s a grand slam home run because it is exactly what we do and the person is seeking, not only an expert but a local expert. Since we are the only Google Ads Agency in San Luis Obispo County this is a trifecta for our business. The problem is that San Luis Obispo is a small rural community and the number of these searches is close to zero. The person doing this search is probably someone we have had coffee with.

If we strip away the qualifier, which in this case is a geographic qualifier then we have “Google Ads Expert” a much higher volume keyword but the competition also just increased tenfold. We have no dumb competitors in this space so we can tell you without question that every competitor knows this is a word worth going to War over. This falls into the “B” category so volume is higher.

If we strip away the intent of “Expert”, we are left with the subject, which has massive volume but a random level of intent, response, and value. When you are trying to squeeze the last drop of traffic out of the system, these are worth going after. If your budget is constrained then your keywords should be as well.  

Quality versus Quantity

Like most difficult system problems, you face balance issues and in this case, we have the classic quality versus quantity issue. If you tighten the quality the quantity will drop and with a budget constraint, the goal is to find the balance. You want your campaign resources (money) to go to the highest ranked keywords.

The Mechanics of this Change

There are several variables going on as you move through this strategy and it is like peeling an onion. As you move through each layer, the data will expose itself. For every layer, you will have a new set of challenges. Initially, we start with a big bucket of keywords separated by theme. As the data evolves, keywords move into their volume classes and the ad copy gets even more specific to the keyword. This evolution of the account takes time depending on the volume of the data passing through the account. The more data you have, the faster you can evolve toward the final set up. In most accounts, this takes 1-3 months but there are tricks that experienced people can use to shortcut this time delay. If the expert has done the industry before or has studied the competitors, they can often shorten the data gathering timeframe by 50% or more.

Account Restructure

The idea behind this strategy is to have budget controls on the three types of keywords. The only way to have full control of the budget is by running your three types of keywords in separate campaigns. This results in a complex account but it is necessary for this strategy.

Campaign 1: “A” Category Words

The first step is to create a new campaign. This allows you to have control over the budget settings. Put the exact match “A” words into the new campaign and then the same keywords into a negative keyword list. Attach this list to the old campaign. This is important because it will prevent you from competing with yourself. You have enough enemies in the market, you do not need to be one yourself. The initial setup will give you an estimate for the budget on these keywords. Add an extra 20% on top of that. Create a new ad group for each word. This will allow you to tightly fit the ad copy to the keyword without compromise. We typically see an improvement on the quality score, which is an added bonus.

Risk: During this time it is possible to have a slight budget overrun.

Depending on the traffic volume, the review period should be every other day up to a week. It is important to have enough data to make smart decisions.

Campaign 2: “B” Words

The second step is to create a campaign for your “B” words. In many cases, it will be this campaign that will hit the budget limit. How hard it hits this limit drives how you manage this. In general, if the budget is hit by less than 50% of the words it is possible that you have to rethink this category.

Campaign 3: “C” Words

Create a new campaign for the remaining words. Keeping the negative keyword list in place on this campaign.

Managing Your New Configuration

Managing this set of campaigns is largely about budget control. You want to make sure that:

  • “A” words never run out of budget
  • “B” rarely runs out
  • “C” normally runs out of budget

To simplify budget management, you can use a shared budget between A & B but never attach C to that shared budget. It is very important to keep an eye on the impression shares at the campaign level and consider budget adjustments if your A or B routinely runs out of money.

Impression Share

This tactic requires some thought and understanding of the impression share. Impression share is simply the percentage of times the ad appeared when it was eligible. When managing a constrained budget, this is a key data point. You can lose impression share two ways, by Rank and by Budget. As the loss to budget shrinks you need to watch the loss to rank.

A Few Rules

  1. Never put broad or modified broad keywords in the A or B campaign.
  2. Never let A run out of money.
  3. Review once a month for words that should be promoted or demoted.
  4. Treat C as a keyword testing ground.

Summary – Tell ‘em what you told ‘em

By isolating the performance levels you create a greater control in the account that can be tightly connected to the account ROI. In Google Ads, there is an “Ignorance Tax” that gets charged and this is one example of that. As is usually, the case you can cure the business problem using cash or creativity. Since all of my clients have a limited amount of cash we like to spend our creativity creating leverage.