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4 Ways Budgets Get Off Track & Tips For Fixing Pacing
Pacing may be the most important task for the search marketer. Ending an account overspent means you might have blown through money the client just doesn’t have and you could be on the hook for the difference. Ending a campaign under budget can be worse based on the missed opportunity. I remember years ago on one campaign, the client calculated the ROI of the underspend and tried to charge the agency for the loss. Either way, under or over, bad pacing is just unacceptable. It’s an amateur mistake, and believe me, you don’t want to go down that road with your client or your manager.
Pacing can be a surprisingly complicated thing to accomplish and I’m surprised that I haven’t seen a pacing tool integrated into an SEM management platform yet…it would seem to be a no-brainer. This world-wide economic recession has made all marketers, including SEM pros, more savvy. Our paid search accounts are more optimized than ever before and there’s very little fat to trim or ad groups to pause. If the search volume on our terms drastically fall, we may not have the option to simply unpause under-performing keywords or ad groups [without justification] to make up the difference.
Some of the issues that affect pacing include:
Usual Spikes and Dips
Search is a pull medium. Inventory is not guaranteed nor is it easy to accurately predict. First of all, there are seasonality shifts in any business (“prom dress” starts to spike in February and dies in June). Of course, over time, the product or service may natural phase out or become out of fashion – ever wonder what the volume on “sony walkman” is? If you or your competitors run any other large advertising campaigns, online or offline, seasonality may spike your traffic. There’s also unique variables to every paid search account.
For example, we have an entertainment client that sells tickets to their shows. We’ve learned over time just what the search volume curve looks like and we know it spikes three weeks before opening night and dies almost ten days afterward. It’s almost like clockwork, and we’ve been able to master budget allocation on this account over time.
Unusual Spikes and Dips
Michael Jackson’s recent passing comes to mind as a perfect example. Google received so many queries that they thought it was an attack on the system. Can you imagine if you were selling something Michael Jackson related that day and didn’t have budget caps on your account and suddenly wasted your entire quarter’s marketing budget in twelve hours? Or imagine if you had very tight budgets and didn’t take advantage of that opportunity to sell to real fans?
In a personal example, I was working on the paid search account of a Fortune 500 company a few years ago that was involved in a criminal investigation. Overnight, their branded term traffic spiked exponentially with “[company] scandal” and [company] problem”. We immediately had to add more negative terms to their campaigns to avoid that traffic. These crazy spikes and dips happen all of the time.
Hundreds of thousands of keywords, three or more engines, hundreds of campaigns, thousands of ad groups…that’s a lot to keep track of. Especially if there are promo campaigns flighting in and out, new product groups entering the picture, etc. It’s just a lot of moving pieces and it can sometimes be difficult to handle.
One of the common SEM rookie questions about AdWords is, “Why did my campaign go over budget yesterday?” Well, as we know, daily campaign budget caps are about as firm as a wet paper plate. Google’s policy is that it won’t spend more than 30 times your daily budget in 30 days. So, if you go over $20 your first day, you may see your account spend $20 less the next day to even that out; so, even Google has trouble staying within budgets. They have so many ads running that it would be virtually impossible to stop one account on a dime. That being said, Google won’t charge you anything over your account budget, but that doesn’t help you if you have multiple campaigns starting and stopping in one account.
Not only do you have agency fees, but there are third party costs as well. Your bid management platform may be 2-5% of your media spend and critical competitive tools such as AdGooroo, Compete, SpyFu, etc. have their own subscription fees. You have to keep track of all of those things and make sure you back them out of your media spend. Years ago, at another agency, I remember there was an account where the team spent the budget for six months until they realized the agency fees hadn’t been taken out — they basically had given the client a half year of free work because of this mistake.
The scrutiny level for pacing varies with each account. Sometimes you’re pacing daily, but usually weekly is fine. Most accounts have an even spread of the budget over the length of the campaign so it’s a simple thing to compare what percentage of the account you’ve spent versus what percentage of account has passed in time. At the beginning of the campaign, it’s usually okay to be as much as 20% over or under, but any more than that and you should try to make up the difference as quickly as you can and then pace back to normal levels.
Pacing really becomes more serious as the end of an account nears. I direct my team to try to be just about done by the last week and only leave what they know they can spend for the last seven days (basically 30% or so of the current daily average). This way, they can put on daily budget caps because they know the engines will have no problem spending the remainder.
Underpacing is usually harder to fix efficiently than overpacing. When you’re overpacing, there’s immediately an opportunity for you to optimize out of the poorest performing ads, keywords, and ad groups. This usually leads to a better account. However, when you’re underpacing, that means you’re going to have to open up the account which could lead to lower overall performance. There have been many times where I’ve had to go back to a client and tell them that we can’t spend their money efficiently at the budget goal that has been set. I don’t like to do that, but you serve your clients better by telling them then truth than by just flipping the switch on high-volume general terms that don’t necessarily help meet their objectives.
Tips if you’re underpacing
- Increase bids
- Increase budget
- Use Content (and/or Placement in AdWords)
- Use more Broad Match to create a “wider net”
- Wider geotargeting, dayparting, etc
- Expand your keywords. How about topics similar to yours but not specific to you? For example, if you’re selling surfing gear, what about bidding on “Hawaii Travel” or “Beach Vacations”?
- Raise your CTRs on your ads to get the most clicks from the available impressions (see above on raising CTRS)
- Use other engines such as Ask
- Take out negative words (when it makes sense to do so)
- More general ads vs. specific but don’t kill your quality scores by doing so
Tips if you’re overpacing
- Decrease bids
- Decrease budget
- Get off the Content Network (usually has a lower ROI than Search)
- Don’t use Broad Match
- Tighter targeting. Find the highest performing geo- and day- parting segments and move budget away from the rest
- Use more negative terms to filter your ad triggering
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