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How to Increase Conversions by Reallocating Google Ads Campaign Budgets

campaign It’s more common than not for marketers and agencies to work within a budget when running Google Ads. Even when Google Ads are working very successfully and generating a positive ROI, cash flow and other business constraints may restrict how much your boss or client is willing to spend.

It’s easy for PPC managers who still run manual bidding strategies to get stuck in a rut and rely almost exclusively on bid changes when updating accounts. With Google’s reps and interface pushing automated bidding, it’s more important than ever to expand the tactics you feel comfortable using to manage a Google Ad account. Campaign allocations is one lever you can learn how to pull.  

Introducing the Campaign Budget Reallocation Tactic

It’s not unusual to have multiple campaigns running within the same account that all support the same business. Reallocating money to campaigns that are performing better can lead to a quick win, but these types of updates generally need to discuss with your client or boss first. This can be intimidating, but if you know how to explain the economics of the decision and know what to look for below the surface that might alter your recommendation, you’ll be confidently able to lead this discussion.  

Google Ads Campaign Budget Reallocation Example

For example, let’s suppose your client is a successful Realtor selling residential real estate in a city, and you have been running a campaign that successfully generates leads for her. You have a budget of $50 per day, and you are using the Google Ads platform exclusively. You have remarketing and general display campaigns each with a $10 budget, as well two search campaigns. One search campaign targets people moving within the city and the other one targets people looking to relocate from the suburbs. Each with a $15 budget.

To keep this example very simple, let’s suppose your conversions are all contact form submissions, and that the likeliness of all conversions to result in business is the same, and that the commission earning from all these transactions is equal. Let’s also assume you are limited by budget. Google suggests a budget of $50 per day for both campaigns. This is a summary of your average results for the past 3 months: 

Campaign Budget Cost Per Conversion
Suburbs $15 $30
City $15 $65

 

In this case, you would want to suggest pausing the City campaign and raising the Suburbs budget to $30. Here’s the math to support this recommendation.  

Current Scenario

Suburbs

Spending 30 days * $15 per day = $450 per month

$450 per month / $30 Cost per Conversion = 15 conversions

City

Spending 30 days * $15 per day = $450 per month

$450 per month / $65 Cost per Conversion = approximately 7 conversions

Total conversions: 15+7=22  

Suggested Scenario

Suburbs

Spending 30 days * $30 per day = $900 per month

$900 per month / $30 Cost per Conversion = 30 conversions

City

Spending 30 days * $0 per day = $0 per month

0 conversions

Total conversions: 30

Net increase of 8 conversions.  

Why You Need to Double Check Your Assumptions

In this example, we made a lot of assumptions. In particular, we assumed that every conversion would deliver equal financial results. This is almost never the case, and so it’s important to look for data that doesn’t support your assumptions before making any recommendations.

For example, let’s suppose that closer analysis of the data reveals that the keyword that triggered some of the conversions for the Suburbs campaign were searches of the Realtor’s name. That is referred to as a branded keyword, because it’s the name of the company’s brand, which is the name of the Realtor in this case. Branded keyword searches almost always convert at a much higher rate, and for this reason, they can skew the data significantly. Branded keywords can sneak into a campaign innocently as the result of an automated targeting strategy or if a sneaky Google Ads manager used the Realtor’s name to intentionally drive up conversions. Before making the recommendation to pull support from the City campaign, you would want to recalculate the cost per conversion subtracting out the conversions from branded keywords.

Another thing that can go wrong is assuming the revenue potential is equal. For example, let’s suppose people moving from the suburbs into the city are empty nesters looking to downsize and the typical city searcher is upgrading and has a larger budget. In this case, the City leads would be worth more. However, let’s suppose the Realtor closes 1 in 5 leads generated by the leads generated in the Suburbs campaign and that she is more likely to earn both the buyer’s and seller’s commission and only 1 in 12 leads generated from the City campaign. That would tip the scales in favor of the Suburbs campaigns. Marketing analytics platforms, like Jess, can help you factor in the amount of revenue earned by each keyword and campaign.  

Putting Google Ad Campaign Allocations into Practice

As you are preparing for your next campaign with your Google Ads clients, look for campaigns with the best cost per conversion, and make sure there is nothing padding the results. Initiate a conversation about the lead quality from each campaign and make sure you consider the potential implications on sales if leads are gained or lost from a campaign. If it has the potential to increase sales, then make the recommendation to change the campaign allocation.

Do you have a story about how you increased results for your client by reallocating budgets? Share it with us below.

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