Adwords Budgeting - Staggering, jogging and Sprinting.

Monthly Adwords Budgeting:

For practical reasons most agencies work with monthly budgets for Clients Adwords accounts. This practice proves useful for both clients and agencies as it better enables them to manage their cash flow. Generally the Adwords Management fee is treated separately from the Adwords budget (i.e. the money that goes from the client, to the agency and then to Google.) 

Who decides upon the monthly Adwords Advertising budget?:

Ultimately the decision regarding the Monthly budget is up to the client. The agency can advise the client regarding budget and provide probable scenarios. These estimates regarding budget will be based on keyword research conducted using Google keyword planner, …….. and other tools.  

Example scenario:

Average cost per click is $ 1; therefore $ 100 = 100 clicks, therefore if the daily budget is $ 100 then 100 clicks will result ( providing there are enough people searching using the targeted keywords and keyword phrases)

N.B. Advice given by agencies regarding monthly budgets are “guestimates” only this is because:

There are multiple constantly changing variables and every targeted keyword represents a unique market. I.e. “franchise opportunity” is a different market to “franchise opportunities”. And, “black school shoes” is a different market to “school shoes”.

 Some Factors affecting Adwords spend and therefore monthly and daily budgets.

·         

     * The number of people searching using targeted terms/keywords

The greater the volume of relevant searches the higher the number of clicks is likely to be. This means the volume of clicks increases. This therefore increases daily and therefore monthly costs. (this does not account for the fact that the cost per click may also increase).

·        *  Competition

The Adwords system functions as one giant auction. As with all auctions the greater the demand for a single item the higher its price. The greater the competition for a specific keyword the higher the price is likely to be.

Splitting the monthly Adwords Budget… (a few scenarios)

While agencies may use monthly budgets for the purposes of planning…. Google Adwords itself uses a daily budget.  This means that agencies/clients Monthly budget is entered within the Adwords system as a daily budget this means that the monthly budget can be allocated in a variety of ways. 

1.       Sprint to Finish:

Deplete the monthly Adwords budget as soon as possible.

The entire monthly budget can be set as the daily budget. I.e. if the monthly budget is $10 000 then theoretically the entire monthly budget could be spent in a single day. ….providing there are enough people searching using the targeted keyword (and then clicking on the advert).

This will then mean that after the monthly budget is depleted then advertising will stop showing…this could (depending on the market) be within only a day.

Presuming that the client does not want to add to the monthly budget (through the Agency) then they will need to wait for the start of the month for their advertising to start showing again.

2.       A staggered Jog

Splitting the monthly Adwords budget into equal daily increments.

This should mean that the Adwords advertising should display more evenly throughout the month.

For example: If the monthly budget is $10 000 then this would be divided by the number of days in the month (let’s presume 30) therefore the daily budget would be $ 10 000 / 30 = $ 333.33 per day.

3.       Walk, Jog, Run, Sprint

The monthly Adwords budget is divided but not into equal daily increments. 

(There may be strategic reasons to do this, in certain circumstances.) This means that the daily budget (and therefore spend) could vary greatly.

Example: Assuming a monthly budget of $10 000 this could be split as follows:

Day 1 to Day 10 = Daily budget of $ 100.

Day 11- 20 = Daily budget of $ 200

Day 21 -30 = Daily budget of $700

 For Adwords management visit Google Adwords Management Services