Quick question about daily budget

is it wise to set your daily budget much lower than predicted daily cost?

[HelenDev]

I am an adwords noob trying to set up our account for the first time.

On entering the keywords I would like us to use, google firstly suggested a daily cost of about £230 for 600 odd clicks. I managed to get fiddle with it and get the daily estimated cost down to about £16 (at the expense of some keywords and ad position :()

However, the boss only wants to spend £3 a day. Do any of you guys think this is a realistic amount, and should I go for a high estimated budget with the low daily limit? I don't think I could get it down below £3 without deleting all my keywords!

If anyone could offer some advice I would be most grateful.

Helen.

[eWhisper]

The one advantage of the daily budget is that you can run all the keywords you like, and if your daily budget is below the recomended budget, your ads just won't be served 100% of the time.

This allows you to advertise on a variety of KWs to track ROI/Conversions to tweak your campaign for the words that are converting.

If your daily budget is a lot lower than recomended, I wouldn't drop KWs, I'd drop bid prices. There is a point where your ads will run most of the time because your bidding low, and yet you can still get enough clicks to use your daily budget.

Give me 100 clicks at postion 8 for $0.05, over 10 clicks at position 3 for $0.50 anyday.

[webdiversity]

However, the boss only wants to spend £3 a day.

You need to get a new boss, or take the hood off the current one.

Agree with eWhisper 100%

[AdWordsAdvisor]

Excellent advice, as usual, from eWhisper.

I do have one addition, regarding this thought:

If your daily budget is a lot lower than recommended, I wouldn't drop KWs, I'd drop bid prices.

I am a big fan of using targeted keywords as opposed to very general keywords, especially when your daily budget is much lower than the recommended one. A few reasons:

* Targeted keywords are likely to deliver you a more prequalified customer

* Targeted keywords are often less competitive (and therefore cheaper) than the more obvious general keywords

* Targeted keywords will usually get fewer impressions than general keywords - which means they'll not run through your budget as fast

* The fewer keywords you have, the farther your budget will go. So why not focus on keywords that describe what you actually have?

Bottom line: when you have a low daily budget to work with, make it count by weeding out low-quality keywords.

As usual, just my two cents. ;)

AWA

[HelenDev]

Thanks for all the tips guys. I chose more specific keywords and the cost went down and ad position went up. I can only expect to get between 0.5 and 2 clicks a day on each of these kws though, but hopefully they will be the right sort of clicks :)

No doubt I will be back here for more advice as I go.

H.

[cline]

The problem here is the boss and his arbitrary idea of spending only a fixed amount of a day. Adwords does not work like image advertising. Adwords works like highly targeted direct mail advertising. You should evaluate an Adwords program on a segement-by-segment profitability basis. If it's profitable, do all of it you can. If it isn't profitable, stop doing it.

The only time you should be using the budget function is when you're testing. Arguably that may be the situation you're in, but even then you're implementing it wrong. You should have a budget for the total test spend, not a daily allocation. The budget for the test spend should be a function of how much you need to spend to determine whether the offer is profitable.