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How to Set Your AdWords Budget: New Shared AdWords Budget Options

September 19, 2012
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google adwords budget estimator, google adwords budget

How high should I set my initial AdWords budget?

The answer is surprisingly complicated to come up with, and it's even more difficult to allocate.

Why?

A Challenge in Allocating AdWords Budgets

AdWords budgets are generally set per campaign, per day (i.e. you set a daily budget for each of your campaigns). This usually gets complicated because most advertisers have multiple campaigns.

If you're a reader of the WordStream blog or if you've used our AdWords Grader, you’ll know that we recommend that you break up every campaign theme into at least 3 different campaigns for targeting:

Now imagine having broken up every campaign into three campaigns along these lines, and you can start to see how it might be a challenge to allocate say, a $100 daily budget into so many little pieces. Some campaigns might exceed the daily budget limit, and then shut themselves down, where as other campaigns might underspend, leaving unallocated budget.

Of course, having unspent budget at the end of a day isn’t inherently a bad thing. (Unless you're an agency specifically tasked with spending a specified budget). Furthermore it's almost impossible to know ahead of time exactly what the split between mobile search, Google desktop search and display inventory will be.

Introducing Shared Budgets in AdWords

All of the above is just to motivate the need for a new feature in AdWords, released Monday, called Shared budgets in AdWords.

Shared budgets in AdWords let you establish a single daily budget that’s shared by multiple campaigns in an AdWords account. Shared budgets can make it easier to match your AdWords spending along the lines of your business or marketing objectives, rather than having to split it up along campaign distribution options. Let's walk through an example of how to set your AdWords budget using shared budgets in AdWords.

How AdWords Shared Budgets Work

Say you’re a vendor of business software for contact management. Suppose you’re currently running three campaigns for your software product, broken down by desktop search, display advertising, and mobile search.

Your overall marketing plan allows you to spend $100 per day across your three campaigns. Without shared budgets, you’d next have to decide how to allocate the $100 daily AdWords budget across each of your three campaigns. If you don’t necessarily know or care how the amount is split between display advertising, mobile search, and desktop search, using a shared AdWords budget is potentially a great solution.

This means that AdWords will make automatic budget adjustments across campaigns, so you don’t have to constantly monitor and change individual campaign budgets throughout the day.

How to Set Your AdWords Budget Using the New Shared Budget Component

It's not exactly easy to find. You need to use the shared object library area of AdWords, which I personally think is a bit of a bad neighborhood in terms of AdWords usability, but anyway, here it is. You just "Create a new shared budget," give it a name and amount, then save it, as shown here:

adwords budget tool, adwords budget optimizer

Once you’ve created the shared budget, you can then apply the shared budget from any campaign setting pages, like this:

adwords budget estimator

Who Wins, Google or Advertisers? Should You Avoid Shared AdWords Budgets?

Now that I’ve described what AdWords Shared Budgets are and how to use them, let’s think about whether using Shared Budgets in AdWords is even a good idea in the first place.

(Believe it or not, not every AdWords feature has the best interests of advertisers in mind...)

For example, I realize you could easily make the argument that this new feature could be less about helping advertisers and more about helping Google drain every penny of available budget from your account to increase Google Revenues and Earnings. Quite simply, by aggregating budgets across different campaigns (with each campaign having different levels of available ad inventory), it’s more likely that Google will be able to spend the specified budget amounts.

A key question is when does the Shared Budget kick in? For example, I would be concerned if an AdWords budget was shared between a very fast campaign (as in, a campaign that racks up lots of impressions, clicks and cost at a very fast rate) and one or more slower campaigns.

The risk here is that the faster campaigns would suck up all the available budget quickly, leaving little or no budget for the slower moving campaigns, which might have undesirable effects. For this reason, I would caution against sharing budgets across dissimilar campaigns (i.e. campaigns with different objectives). For example, don't create a shared budget called "my total daily AdWords budget" and share that across all the campaigns in your account.

Other than that, it seems at first glance to be a reasonable way to manage budgets across similar campaigns. Have you used the new AdWords Budget Sharing feature in your AdWords account? Why or why not? Let me know what you think in the comments below!

About the Author

Larry KimLarry Kim is the Founder and CTO of WordStream, Inc., provider of the 20 Minute PPC Work Week and WordStream Advisor, an Award-Winning PPC management platform. You can follow him on Google+ and Twitter.

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Comments

costa
Sep 20, 2012

dear larry iam   unaware of this great new feature.  thank you so much to post this nice write up

Eran Malloch
Sep 20, 2012

Hi from Australia Larry! :-)This IMO is a great new feature for AdWords.I have often been put in a position where I have a fixed daily budget to spend but would like to run 2 or more seperate campaigns (eg: search & display), but then face the challenge of how best to share the funds across these campaigns without unnecessarily penalising 1 of them with too-low a budget.Yes, it WILL spend your money quicker, but heck, as long as you're getting a solid ROI, that's fine by me. Heck - my goal for every campaign is to grow it from $50 or $100 a day spend to $1000 or even $10K a day! If the ROI is positive, it just means I'm making money for my client quicker rather than slower. :-)Sure, it's no silver bullet if your overall daily budget is not high enough, but it is a handy feature to have. Kudos to Google for introducing it.Eran

Larry Kim
Sep 26, 2012

Eran, i think your example of distributing a budget across different targeting options (search + display) across similar campaigns is an excellent idea for using this new feature. Let me know how that works out!

Will
Sep 25, 2012

Its not bad but there is no breakdown in spend ratio.. plus is so complex to actually revert to individual budgets again.. to do this you have to go into each individual campaign setting and disable each individually to go back to individual budgets. This is quite rediculous considering you can have 1 campaign running with a combined budget! Bit odd.

Jeff
Oct 08, 2012

Great post and very easy to set up. Eager to see how my campaigns react to a shared budget.My client has three campaigns targeting three different locations and wants to spend the entire budget per day but recognizes that sometimes the demand isn't there. This feature allows my client's campaign in "Location A" to dip into the funds allocated for "Location B" when Location B doesn't use the alloted money.Will have to watch out for how quickly one campaign spends though. With that said, beware of the standard vs. accelerated delivery options!Cheers!

Elisa Gabbert
Oct 09, 2012

Thanks, let us know how it turns out!

LOJO
Oct 11, 2012

I spent a lot money on adwords, the resuls were also good but dint meet my expectations. So, now again i am planning to begin with low under budget adwords plan.Dont want to spend enough money on it.Your post help me with some.Thanks !!

Thiết kế website giá rẻ
Oct 16, 2012

Its not bad but there is no breakdown in spend ratio.. plus is so complex to actually revert to individual budgets again..

Superior Marketing Group
Nov 17, 2012

A key question is when does the Shared Budget kick in? For example, I would be concerned if an AdWords budget was shared between a very fast campaign

Adwords Bid Management
Mar 13, 2013

The good thing about the shared budget is not seeing the 'Limited by Budget" status on some of your campaigns. Like Eran said above as long as you are getting the ROI it shouldn't matter, but the headache can be if you do have a campaign (like an exact match kw campaign) that typically has less traffic and you share the budget with a faster moving campaign, you may never give the slower campaign a chance to get you any data. Something to think about.

Noi that Hoa Phat
Apr 02, 2013

Anyone know how to distributing adword's budget in different times in day? For example, I want to spend 70% of my budget from 8am to 8pm and only 30% of budget from 8pm to 8am for every day. Is it possible to do this with share budget?Thank you

Larry Kim
Apr 03, 2013

There is no way to do exactly what you're saying here but there are a few work arounds.For example, you can choose Standard delivery (the default option) which distributes your budget throughout the day to avoid reaching your budget early on. This option is recommended if you want to reach your audience evenly throughout the day, rather than just in the morning.Accelerated delivery displays your ads more quickly until you run out of budget. So, if your campaign is limited by budget, your ad might stop running earlier in the day.Additionally you can check out time of day bid adjustments in enhanced campaigns. It will allow you to bid less aggressively (eg: -50%) during the night time (eg: 8PM to 8AM) so that more of your spend happens during the day.

ghế văn phòng
May 12, 2013

This is quite rediculous considering you can have 1 campaign running with a combined budget! Bit odd.

Kevin
Jul 09, 2013

Excellent article. I am trying shared budgets now for a client, linking two campaigns together with a similar speed and similar products (hometrainers, crosstrainers) Wondering how it's going to turn out :)

Dmitry Minyaylov
Oct 10, 2013

I have an issue with an AdWords account where  the most important campaign (most relevant keywords and highest CTR) has very inconsisen budget spending. I allocate about 70% of the budget to this campaign alone, however, there are days when only half the budget gets depleted. I am looking for a way to have the budget carry over into other campaigns on slow days. I came across your article while looking for a solution to my problem, and although the shared budget feature doesn't help me, I learned something new about AdWords. Thanks for explaining how it works!

Fabulloso
Jan 03, 2014

Hi, Larry KimThis is a very informative post. No doubt that your effective PPC Strategies for Google Adwords are best.Hope you will publishing more post. Thank you for sharing with us.

máy xông mũi họng
Jan 20, 2014

I allocate about 70% of the budget to this campaign alone, however, there are days when only half the budget gets depleted. I am looking for a way to have the budget carry over into other campaigns on slow days. 

Mua thanh ly ban ghe van phong
Mar 09, 2014

I want to spend 70% of my budget from 8am to 8pm and only 30% of budget from 8pm to 8am for every day.

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