Very rarely do we at Permission come across business owners with an unending stream of ready-to-spend cash to divert to their Google AdWords campaign. In fact, the opposite is generally the case. In which case, the best mantra for every Kiwi business owner to abide by is: get more for your clicks this month than you did last.

Sounds simple, but how do you do it? The first step is to thoroughly understand the way in which Google goes about spending your money. Let’s spend a few minutes pulling this apart.

In most situations your budget is allocated at a campaign level and represents a fixed cost per day. Some days you will be above the spend, some days below. But when you extrapolate this spend over a month, Google does a great job of ensuring you don’t spend more than you expected to – they do this by “throttling” your campaign…

Each day, at midnight, your budget is refreshed with new funds and your ads start to display. If your daily budget isn’t enough to gather all the clicks available for the next 24 hours Google will, by default, limit or “throttle” your
campaigning by exposing it gradually during the day. This allows you to get clicks from each part of the day: morning, afternoon and evening.

However, you have the power to edit this “throttled” setting. You can burn through your budget as fast as possible, if you choose. Or you can alter the time of day and days of week the ads are shown. So if your best leads come during the weekend and you receive poor-quality leads on a Monday, you can choose to stop showing then and move your budget to get more weekend traffic.

How do you know if your budget is so low that your ads are being “throttled”? Google makes finding this a breeze with one of their core reports – see the example below. Here Google reveals the “impression share” of the campaign (that is, the amount of times the ad would have been seen if it was available) due to both budget restrictions and campaign quality.

We all know what a campaign with a low impression share is like – it’s the one where your ad seems to be hiding when you go looking for it on Google. You type in your target keywords and your ad doesn’tshow. Or, even worse:
your boss types in the same keywords and arrives at your desks with print-outs proving the same failure.

Now let’s look at what causes your budget to deplete so quickly before the day is up. People clicking your ads is the simple response – hurrah for response! But let’s dive a bit deeper into how a campaign could be set up to make
Google’s puppeteering a lot less controlling than it needs to be.

Let’s say you run a bakery that supplies venison pies and cream buns. Both of these are available from your website, but it’s the venison pies that represent 70% of your revenue and a sizeable part of your profits. Wanting to
improve your traffic, you start advertising with Google on both keywords (“venison pie” and “cream buns”) and place them within the one campaign. This is set up with a budget of $20 per day and is configured to target Aucklanders.

After two weeks you have spent just under $300 and have sold just one pie and two cream buns. Total sales are a very measly $50 and you’re left with a feeling of distrust of all things Google. Especially when they tell you that there’s a lot more clicks available and that your ads were being throttled. What a waste of money.

Then you take a deeper look into what you got for your budget. You see that the campaign delivered 400 clicks for cream buns and just 20 clicks for venison pies. So an OK conversion rate for the pies but an appalling one for the buns. In addition, you realise the buns keywords were a lot more popular than the meat pies and therefore grabbed as much of the budget as they could. So the first lesson is to split the campaign into two groups– one for pies, one for cakes – and then apply the budget to each in a way that better reflects the commercial benefit of each ie weighted more heavily to the more-profitable venison pie offering.

Now let’s say the bakery owner goes home and tells their partner how they have beaten Google at its own game and are now spending their click dollars so much better than before. To prove this they get out their laptop and, at 6pm, search for “venison pies” – they proudly show their partner that their ads are still appearing at 6pm due to their budget being slowed across the full day. The owner then gets a bit show-offy and logs into their order system to smugly point out all the nice new orders coming from those who clicked and then converted. Good news. But not for long.

The bubble is quickly burst by the partner who takes over the laptop and types in keywords like “meat pies”, “fresh savoury pies” and “fresh meat pies”. Alas, no ads appear.

“Surely more people would be searching for these terms than a very specific “venison pies”,” he queries.

So the next day a rather deflated baker goes back to work, adds these keywords into her venison campaign and awaits for the torrent of orders. You guessed it – it doesn’t arrive.

What does arrive is a bundle more clicks, delivered by the addition of these broader target keywords – but unfortunately they’ve now carved into the budget, stealing valuable budget from the more targeted (and ultimately
more beneficial) “venison pies” keywords. The poor baker’s campaign has been “throttled”.

When it comes to allocating budgets to keywords, there are always trade-offs to be made (unless money is no issue for you). You can’t be seen by all search terms all the time, and nor can you grab all the clicks available. The magic is knowing where to invest the right amount of awareness (think ad impression) for each keyword and at what cost (think cost per click) to capture the optimum return on your spend (think advertising cost/conversion revenue).

Happy bidding.