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Newbie Mistake #1 - Limited by Budget

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Andy Black

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AdWords Newbie Mistake #1 - Limited by Budget



There's a lot of unknowns when you first start an AdWords campaign:
  1. You don't know what the search volumes are (even if you've got estimates from the Google Keyword Planner).
  2. You don't know what your ad position will be for your given bid price.
  3. You don't know what your click-through-rate (CTR) will be for your given ad position.
  4. You don' t know if your CTR will be better than your competitors in the same ad position.
  5. You don't know if Google will reward you with a discounted cost-per-click (CPC), or punish you with a higher CPC.
  6. You don't know if Google will reward you with a higher Impression Share, or punish you with a lower Impression Share.
  7. You don't know what your click volumes will be, since it's determined by the search volumes, your Impression Share, and your CTR.
  8. You don't know what your conversion rates will be, and your earning-per-click (EPC).
  9. You don't know what your return-on-investment (ROI) will be.
Yep, lots of unknowns!

Forget estimating these metrics. You'll be wrong, and you could have got a campaign running and got the answers in the time you've just spent asking the question and created some complicated Excel model.

The only way of finding these out is to launch and learn.

At the start, when you are gathering your metrics, it makes a lot of sense to cap your spend by putting a daily budget on your new campaign. If you hit a rich vein of traffic then you'll hit your budget quickly and your ads will stop showing for the rest of the day. This prevents your costs spiralling out of control.

But the big newbie error is to cap daily spend AFTER you've gathered all your stats.

This is especially true if you're getting a positive ROI. If you found a box at the bottom of your garden that returned $2 for every $1 you put in, would you limit your spend for the day to $10? I think not. You'd put in as many coins as you could find. You'd get a loan from the bank and put that money into the box too.

If you're positive ROI, then set your budgets a bit higher than your max daily spend. You don't want to limit any incoming traffic, and you just want a budget set as a fail safe in case someone accidentally forgets the decimal place when amending bids, or accidentally removes your landing page.

If you're negative ROI and are hitting budgets, then keep dropping bids until your daily spend hits your daily budget to buy data, or until you get profitable. You'll get more clicks for the same cost, and each click will be cheaper and lose you less money.

DON'T BE LIMITED BY BUDGETS
(unless you're buying data)
 

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Kate

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I just put keywords on bing a week ago and they literally have had no impressions or clicks (obviously). My words aren't really that crazy (activities for kids) lol maybe bing just doesn't get as much traffic as google so I will be heading to AdWords to see if I have any luck there... don't know the point of my post, just venting frustration I guess lol my fb ads are getting impressions and clicks up to my max, so there's that!

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Andy Black

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I always start with AdWords.

Hold on, correction, I only use AdWords. :)
 

Boo Blizzi

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I always start with AdWords.

Hold on, correction, I only use AdWords. :)

...then you're leaving money on the table. Bing serves ads on Bing and Yahoo search engines. They do not have as much traffic as Google, but the traffic is cheaper and it converts.

Sometimes better than Google (depending on the niche). The reason is because Bing users may be older or less savvy than Google users. Most people using Bing are doing it from Internet Explorer. Which means they are not concerned with using a better browser (Chrome, FF) or dont know how or care to change their search options.

Which means when they are searching for a solution or product, they will most likely go with one of the first options they see. They will not dig deep and research as much as a savvy Google user. This makes it easier for beginning PPC marketers to get profitable campaigns going.

Oh yeah... and you don't have to worry about all that compliance crap you deal with on Google. You can throw up a 1 page lander and go for it.
 

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