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AdWords Campaign Limited By Budget

We’ve all seen this message displayed alongside our AdWords campaigns – it’s Google telling us that the number of clicks and impressions that our AdWords campaign can receive is limited by the budget that we have in place.

AdWords Campaign Limited By Budget

This is bad – this means that people have been searching for our product or service using the keywords that we are targeting, but our ads have not shown due to our budget running out. We may be losing out on sales, enquiries, or leads, simply because we are not using our budget efficiently.

So what should you do about it?

The Easy Answer

The most obvious thing to do is increase the budget. If Google is telling us that we need a bigger budget to capture all possible impressions, then we should increase it, right? Well, maybe. But maybe it’s not that easy. Maybe our client has a maximum budget that we cannot exceed. If this is the case, then simply increasing the budget may not be an option.

The Lazy Answer

The next thing to try is to decrease our bids across the board. If we are using up our budget then we must be bidding too high, right? What’s more, using AdWords editor, we can do this in a minute or so. If we decrease our CPC bids by say 10%, then we may find that our ads show in lower positions, achieve lower CPCs and allow our budget to last throughout the day, and we will no longer see the “Limited By Budget” message when we sign in to the account. We will even get more clicks this way, so surely this is the way to go isn’t it? Well maybe not.

The Better Answer

To answer this question fully, we need to go back to the start. What are Google actually telling us when they display this “Limited By Budget” message? Well, Google are telling us that the budget has been exhausted in at least 1 of the last 7 days. So the first thing we need to do is establish how often our budget is running out.

This is how we do it. First, select the campaign in question (or, if it is a shared budget that is being exhausted, select the campaigns that use this budget) and select a date range of the last 7 days. Then, from the drop down menu immediately above the graph, select “Cost”.  Now the graph will display the amount spent on this campaign for the last 7 days. This is shown below.

Campaign Cost Last 7 Days

We can use this graph to find out how many times the spend has exceeded the budget, which in this case is $80. Take a look across – how many times has the total cost reached the budget?

Once!

If it is just once, we may not need to do anything at all. It is possible that this was an anomaly and that it is unlikely to happen again. To be sure, let’s extend the date range to establish whether this was a one-off. Go back 30 days and see how many times the budget was exceeded during this period – if the answer is still “Once”, then this looks like an isolated incident and we need not do anything, other than monitor the campaign to ensure this does not become a regular occurrence.

More than once!

If we see that the budget has been exhausted more than once in the last week, then it is more likely that we need to take action. But before we start reducing our bids, lets dig a little deeper. The budget is being exhausted, yes, but when is it being exhausted? At what time? We don’t know this yet. If our budget runs out at 11:59pm, this is not likely to be a problem. However if it is running out at 1pm, then it may be an issue.

Now, select a day on which the budget was used up. Then select the dimensions tab, and under View select Time > Hour of day, as shown.

Hour of day dimension

This will bring up a table showing all click data broken down by hour. By finding the first entry with no impressions and no clicks, we establish that the budget ran out at some time in the previous hour. So if all entries, including line 23 (which represents the 23:00-00:00 period) show non-zero data, then this is not likely to be an issue. But what if our budget runs out at 8pm say?

To answer this question, we need to think about our customers. At what time of day do they convert? Are they more likely to buy/sign up/enquire in the morning, afternoon or evening? If we are selling app development to small businesses, chances are they are more likely to convert during working hours than they are after hours. This means that if our budget runs out at 8pm, then that shouldn’t be too much of a problem. If it is running out at 2pm however then it is an issue and we need to either increase the budget or decrease bids. On the other hand, if our customers are more likely to convert in the evening, then we need to ensure that we are showing ads at that time. In this case, if we are using up our budget at 8pm then we need to take action.

In addition to this, if our customers are far more likely to convert during working hours, then we may even want our budget to be used up by 6pm! Rather than showing ads in lower positions throughout the day and evening, we may be better showing ads in high positions at the times that our potential customers are most likely to convert. In this case we can completely ignore the “Limited By Budget” message and check back periodically to ensure that we are still showing ads during the hours that we want to.

This answer clearly requires a lot more thought than the first 2 options, but really this is the logical way to attack it. We need to think about each of our clients’ campaigns in isolation, taking into account their customers and their historical trends. We need to remember the overarching objective of our AdWords campaigns, and adapt accordingly to each scenario. Only then will we allow our campaigns to achieve their full potential.

2 Comments
  1. Hi Chris,

    Excellent point at the end that conversion rates can vary by time of day, meaning that 100 clicks in high-converting periods may be more effective than 200 clicks in poor-converting periods.

    You’re right too that budget distribution will vary by business – ecommerce sites will probably notice a fair amount of stability throughout the whole day (people can buy online at all hours), while pizza delivery companies might notice higher conversion rates and receive roaring trade during weekends and evenings.

    Guess it just highlights the importance of detailed analysis and optimisation – it’s never just as simple as maximising click volume.

    Cheers,
    Alan

    • Hi Alan,

      Yes you are quite right. The subject of conversion rates varying throughout the day is worthy of an article of it’s own, since each business will show different trends.

      Thanks,
      Chris

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