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Lessons Catalogue
Lesson 4a: Cost Control
How You Can Control Costs
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Objective: Learn how you can control your AdWords advertising costs — primarily through your daily budget and bids. Understand some advanced pricing options, including preferred cost bidding and content bids.
The daily budget is the primary way to control your overall costs. It determines the most that you are willing to spend per day per campaign. Since you set a daily budget for each campaign in your account, you can add up all your daily budgets to get an idea of how much you could spend per day for your entire account.
The daily budget determines how often your ads show throughout the day. You can set your daily budget to be as high or as little as you want. You set your daily budget via your Edit Campaign Settings page:
- Sign in to your account at https://adwords.google.co.uk.
- Select the campaign that you want to edit.
- Click Edit Settings.
- Set a daily budget under the Budget Options section.
When choosing a daily budget, keep the following in mind:
- Your daily budget must always exceed your CPC or CPM bid. If it does not, your ad will not be displayed.
- You can view the recommended daily budget — based on the keywords or sites that you choose, bid amount and other factors — by clicking on the View Recommended Budget link below the Budget field.
- If the recommended daily budget is more than you can afford, optimise your keywords, ads or targeting options. To learn more, visit the Preparing to Optimise lesson.
- You can choose between two ad delivery methods when setting a daily budget:
(1) Standard (default setting): Your ad appears intermittently throughout the day if we find that your ad receives more charges than your daily budget allows. This means that your ad will be shown less frequently but spread out evenly throughout the course of the day — rather than shown only in the morning.
(2) Accelerated: Your ad appears as often as possible until your budget is reached. If your budget is low, this means that your ads may stop being displayed early on in the day, as soon as your budget has been exhausted.
- We may "overdeliver" your ad up to 20% more than your specified daily budget on a given day to provide your ad extra exposure on heavy-traffic days and to make up for days when traffic is low. If we exceed your monthly budget (daily budget X 30 days), we will issue overdelivery credits to your bill. See the Billing lesson for more details.
Your maximum CPC or CPM bid represents the highest amount that you're willing to pay per click on your ad, or per thousand impressions of your ad. You set your bid for ad groups or for individual keywords or placements. (See the Ad Group Details page for more details). If you do not specify a maximum CPC or CPM bid for a given keyword or placement, the ad group maximum CPC or CPM bid will automatically apply to all keywords or placements.
When setting your CPC or CPM bid, consider the following:
- Your Quality Score. This is the single most important factor we use in determining the price that you pay per click for ads targeted by keywords. Remember that your keyword's Quality Score sets the minimum amount that you must bid in order for your ad to be shown. Therefore, you can decrease the minimum bid and the overall costs of your ads by increasing your Quality Score. To learn more, visit Preparing to Optimise lesson.
- The value of a click. How much is it worth for someone to visit your website? How likely is it that a click will turn into a conversion (sale, sign-up, etc.)? If high, then you might want to set a high bid. If low, lower the bid. You can get conversion statistics by setting up conversion tracking or by using Google Analytics.
- Your daily budget. We've said it before, and we'll say it again: make sure that your daily budget is higher than your CPC or CPM bid. Otherwise, your ad will not be displayed.
Preferred cost bidding is an advanced bidding option that enables you to specify an average amount that you want to pay, rather than the maximum amount that you are willing to pay per click or per thousand impressions.
In campaigns targeting the search network, you can select the average price that you'd like to pay per click (a preferred CPC bid). In campaigns targeting the content network, you can set an average price per thousand impressions (a preferred CPM bid) or per click. (CPC pricing is not available for campaigns that target the search network.) The AdWords system then automatically works to hit this target price.
For example, if your analysis shows that a click on an ad is worth £0.75 to your business, you can set a preferred CPC bid of £0.75. The AdWords system will then adjust your bid on individual ad impressions to bring your actual average CPC as close to £0.75 as possible. Your ad may be placed in a range of positions while the system works to give you your preferred cost.
If preferred CPC or CPM bidding fits your advertising goals, you can select this option in the Advanced Options section of the Edit Campaign Settings page of your campaign.
The content bids feature lets you set different bids for clicks on the content network and clicks on the search network. It's especially useful if you find that you get a higher return on clicks from one network than the other.
For example, if you find that clicks on search pages return more sales than you get with clicks on content pages, you might want to lower your content bids.
To enable content bids for a keyword-targeted campaign, find the Networks and bidding section of your Edit Campaign Settings page. Make sure that 'The content network' is selected, then also select 'Set a separate bid for content network impressions'. After you save this change, you'll be invited to enter a content bid or bids.
Once you've enabled content bids, you can make separate bids for content pages in any of the ad groups within that campaign. Here's how:
- Sign in to your AdWords account at https://adwords.google.co.uk.
- Click the name of the campaign that you want to adjust.
- Put a tick in the box next to any ad groups for which you want to set separate content bids.
- Click the button marked Edit Bids.
- Enter your new prices for each ad group in the column marked Content. (Default is your bid for search sites, and Placements is an optional separate default bid for when your ad appears on placements from this ad group.)
- If needed, click the small button marked with a down arrow to copy the same bids across all ad groups.
- Click Save Changes.
Continue to monitor your campaign performance and make adjustments as needed. To learn more about assessing performance, visit the Quality and Performance Basics lesson.
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