It’s often the largest of all marketing expenses. The results are usually good. But do you have to spend quite so much? What would happen if you cut your budget by 50% overnight?
In practice, most advertisers reverse that change just as quickly. Not strictly because the hypothesis was incorrect – It is possible that 20% of your paid search activity is delivering 80% of results. But cutting budget at the Adwords campaign level will offer you very little insight into identifying that magic 20%.
Adwords also impacts analytics. Clicks from Google adwords SEM generates a lot of traffic. Perhaps it’s the primary traffic source for your website. This is especially important for companies who employ an SEO agency or work across dispersed teams.
A dramatic drop in spend and subsequently web traffic may cause alarm bells.
This costs time.
In worst cases, without proper insights this can fuel knee-jerk business decisions, which rarely serve your long term goals.
So, how to you cut back Adwords budget if you feel you are overspending?
The simple answer is to start at the keyword level and run a search query report for top spending keywords. Even branded keywords can be broad matched to irrelevant terms.
If users click on them – for example if the ad contains the word “Free” – the search engine will continue to rank you for those terms. Many advertisers top up their campaign daily budget to compensate for this and that’s where the overspend happens.
There are many other opportunities for improving Google Adwords campaign efficiencies, including account restructure and optimisation plans.
Based on several years of managing $1m+ budgets, in my opinion starting at the search query level is the quickest win. Done correctly, it will lead to a natural decline in Google adwords spend for the same results and even free up enough budget to fund other marketing activity.