If you get most of your revenue from this particular offer, allocate most of your budget there instead of trying to split it evenly.
What you want to test for is the point at which increasing impression share hurts the cost and quality of acquisition.
This is the sweet spot before Google starts looking for low-quality conversions to exhaust your budget.
You typically want your campaign budget to be large enough to acquire multiple conversions. Google recommends 5-15x your target CPA, which is close to what works on Meta.
This is not always possible, but a good rule of thumb is to give the system room to breathe and make a few mistakes to learn from.
Certainly break out new campaigns if there are different business objectives:
Are there specific zip codes or counties that you can service from a single location?
Do you sell different product lines that have differing profit margins?
Will significantly different audiences buy different tiers of a subscription?
These are all instances where separate budgets or separate target KPIs make sense.
Budget allocation fundamentals
Just as daily spend is not always an equal portion of your monthly budget, there are other PPC budget truths that catch advertisers unaware.
What happens in accounts with bigger budgets
There is a considerable difference between accounts that spend $50,000 per year, per month and per day.
One that stands out more than most is the frequency and level of risk each of those accounts can take without negatively impacting performance.
Bigger accounts can have a broader account structure with more campaigns, run more tests and experiments, reach statistical significance on those tests faster and test and validate new channels with less delay.
Smaller accounts need to:
Narrow their accounts and campaigns.
Be highly selective with their tests.
Validate and saturate a single channel before moving to the next one.
How to increase budget without impacting performance
Conventional wisdom says to increase your ad budget gradually rather than significantly, but some factors influence this.
Consider a search campaign on Google that is dialed in:
Targets very specific locations or keywords.
Captures a small amount of impression share.
Missing search impression share primarily due to budget, not bids.
If this is you, you can raise your budget by larger intervals without affecting performance.
Anytime you increase the budget, you force the system to find new audiences. It can take time for the algorithm to find a new audience that’ll perform well.
Also, keep in mind that as you increase your budget, you’ll likely see your ad costs increase as well. https://t.co/JxshdGdYDO
— Menachem Ani – Google Ads 🎯 (@MenachemAni) October 26, 2022
But when increasing bids or running a more algorithmic type of campaign like Performance Max, you typically don’t want to increase it by too much too quickly.
This can throw the system off and reset the learning period, forcing it to find a lot more new traffic.
Instead, increase your spend by a maximum of 20% at once and allow time for the new normal to settle in before making the next leap.
Respecting the testing period and algorithmic data gathering
Years ago, you could just start a new campaign knowing what traffic you would get and how it would convert.
Everything is more algorithmic these days, even conventional search campaigns. But especially when you’re using capabilities like Smart Bidding, nothing is as immediate as it used to be.
In most scenarios in Google and Meta, you need the patience and money to give new campaigns a good few weeks to ramp up the testing period – an initial data-gathering phase where the system figures out what works and what doesn’t:
Relevant queries and search terms.
Audience signals or targeting lists.
Validating a CPA or ROAS target.
This should last at least two weeks. For more complex applications like Performance Max, you should probably give it four to six weeks.
Small adjustments are fine, but you should lean on the strategy you launch with instead of making wholesale changes.
This means that the first month or two of your budget allocation for the campaign needs to be treated as an investment in future performance, with expectations tailored accordingly.
Modern PPC requires strong budget management
The negative effects of poor budget management are compounding. An expensive week can lead to a shortfall for the month, which can then turn into a quarter of missed targets.
Seasonality, human error, and real-world events cause budget fluctuations. Add unpredictable changes from ad platform automation, and budget management can no longer be an afterthought.
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