PPC Budget Impact Daily Conversions

PPC Budget Impact Daily Conversions: -

  • Learn more about the relationship between budgets, conversions, and cost per acquisition.
  • Budgets can be difficult to set, especially for new campaigns.
  • Setting the budget too high or low can lead to unnecessary expenses, machine learning problems, and other account performance problems.

Basic rules of engagement:

  • It's important to remember that daily, monthly, and lifetime budgets behave differently.
  • If someone sets a daily budget, the ad network will try to average the daily spend in 30.4 days. 
  • This can mean that the ad network will spend up to 200% of the daily budget on any given day.
  • Monthly and lifetime budgets allow for greater fluctuation in daily spending and, for the most part, will adhere to the stated number.
  • They are great for those who need to spend a certain amount in a certain period and can be a useful way to get around the acceleration period for new campaigns.
  • Cost per acquisition (CPA) is determined by conversions to designate as "in conversions."
  • This number may increase if too many or not enough conversion actions are included.
  • Secondary conversion actions will not be counted in the reported CPA or smart offers.

Budget impact on conversions / CPA:

Actual costs are determined by impressions and clicks.

The CPA and the conversion rate say:

  • The sales team/site is doing this when closing the deal.
  • To configure for quality or volume traffic.
  • The budget supports all the objectives.

There are some unspoken mechanics:

  • The advertiser achieved 8.34 conversions per £ 1,000.
  • Individual conversions could have been cheaper; however, the overall CPA reported is based on the total cost divided by the total conversions.
  • Know how many clicks it took to get all 8 conversions.
  • Budgets should be able to support at least 10 clicks in the day, as a 10% conversion rate is really good for search.
  • The easiest way to see if someone has enough budget is to look at the percentage of lost impressions due to budget.
  • If the budget is too low to support enough site clicks to trigger the conversion rate, the CPA will go up.
  • Increasing the budget does not always lead to a decrease in CPA.
  • If the quality of the traffic is bad, it does not matter how much fuel the campaign has.
  • Starting with a slightly higher budget in the first 60 days of a campaign can help gain statistical significance on the quality of traffic.
  • Any budget adjustments are based on conversion volume scale rather than troubleshooting intent.

When to change the budget vs. When to change channels:

  • It is important to know when a channel fits well or poorly on a budget.
  • Lowering the budget for paid search can result in higher CPAs due to higher costs per click (CPC).
  • Carrying a large budget into an awareness campaign (social targeting landing page views, video, etc.) can also lead to higher CPAs due to a lack of transactional focus.

Signs that the problem is not budget enough:

  • Top of page impression share is consistently below 40%.
  • The average CPC exceeds 10% of the daily budget.
  • The campaign is having difficulty spending the budget on a consistent basis (that is, it increases occasionally during the 30.4-day period).

Signs that the problem is the channel:

  • The quality of the lead is poor or random.
  • The budget increase did nothing to improve the situation of the CPA.

Remove:

  • The budget does not guarantee a certain number of conversions or CPA.
  • Fuel ad campaigns to generate impressions and clicks.
  • A campaign's budget should only be changed if the campaign cannot meet its assigned goals.
  • We highly recommend the use of ad network budget reports, which will help forecast what the budget is capable of delivering.

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