Small PPC Budget? 3 Important Questions You Must Ask

Having a small PPC budget isn’t the end of the world.

Your success will largely depend on the niche you’re operating in and its level of competition.

By asking yourself three simple questions – and measuring and evaluating your success – you can make your small PPC budget go a long way.

For this article, we’re going to focus on Google AdWords because it’s the most popular choice for PPC advertising.

The tips below are relevant to everyone, not just those working on accounts with small budgets. However, larger accounts aren’t as heavily affected when something goes wrong and can recover faster.

1. Am I Targeting the Right Keywords?

This might seem like a basic question but even seasoned search advertising professionals sometimes miss it.

Intensive and thorough keyword research is usually done when a campaign or an ad group is just about to launch. After that, campaigns are often left to run under the assumption that they are “good enough” and are rarely reviewed.

But if you work with a limited PPC budget, you want to review your keywords regularly. Here are some things to watch out for:

  • Were any keywords missed in the previous keyword research rounds?
  • Has anything changed since your last keyword research?
  • Did anything happen industry-wide?
  • Did your product offering change?
  • Are your competitors doing anything different than they were before?

A positive nod to any of the above might mean that you need to take a deep dive into the world of keyword research and look for new amazing, super relevant, highly converting keywords.

Watch Your Competitors

One way to uncover new keywords is to look at the keywords your competitors have been bidding on historically. Chances are, if they chose to bid on the same keyword for a long time, it’s generating results for them. Of course, you must be cautious and carefully evaluate your competitor’s competence, otherwise you might end up competing for keywords that are useless for everyone.

2. How Can I Stop Wasting Money?

Budget waste is a big issue for everyone, but it’s the smaller accounts that get hit the hardest. You always want to make sure you are getting the most out of your budget.

But what exactly is wasted spend and how can you protect yourself from it?

Wasted spend is when you pay for the clicks on keywords that are not bringing any results.

So how can you avoid wasted spend?

Start Small

If your budget is limited, you want to spend it on things you are absolutely sure about. First, find bottom-of-funnel (BOFu) keywords that indicate buying intent (i.e. if a person is typing in that keyword, they are looking to spend money).

For example, when people search for “mini golf toronto”, they are more likely to convert to a customer than if they are looking for “ways to entertain kids”. They have done research and know what they need. Now it’s just a matter of finding the right vendor.

Because BOFu keywords are considered to be profitable, your competitors are after them, too. Before bidding on them, make sure you can afford them!

Start with Exact Match keywords to avoid paying for irrelevant keywords as much as possible.

Expand Your Reach

Once you reach the point where you feel confident about your Exact Match ad groups, you may want to expand your reach and create Phrase Match ad groups.

Google will then show your ads not only to those who enter the keywords exactly but also to those who search for close variations of your keywords. You can learn more about keyword matching options here.

If you’re creating two ad groups that use the same keywords, one of which is Exact Match and the other one is Phrase Match, make sure to include Exact Match keywords as negative keywords of the Phrase Match ad group. That way your two groups will not be competing and your results will be cleaner.

Negative Search Term Review

If you opened up your search to Phrase Match or Broad Match keywords, chances are you’re paying for keywords that are not relevant to your business. They could be:

  • Competitor keywords like “puzzle for kids” vs. “walmart puzzle for kids”
  • Products or services you don’t offer like “marketing automation consulting” vs. “marketing automation software”
  • People looking for information, tips, etc. like “interior design services” vs. “interior design diy”

To avoid wasted spend, you want to regularly comb through your search terms report and weed out any keywords that fall under the above categories. Once you identify them, add them as negative keywords to make sure you waste no money on them going forward.

When deciding whether to add a keyword as a negative one, ask yourself this question: “Can I provide value to the person who is looking for this?”

Search terms report can also help you find keywords that convert well but haven’t been added to your campaigns. Look for the keywords that converted in the past and add them to your Exact Match Ad Group.

Quality Score Matters

Imagine bidding on the same words as your closest competitor, but paying much less for them while holding higher positions. How can that be?

It’s all about Quality Score. The higher your QS is, the cheaper it is to advertise on AdWords. The formula goes like this:

Ad Rank = CPC bid * Quality Score

So if your quality score is eight and your competitor’s is five, you can be bidding $3 per keyword and still get a higher position than your competitor who bids $4.

$3 * 8 = 24

$4 * 5 = 20

In this hypothetical scenario, your competitor needs to outbid you by at least $2 to compete for the same position.

$5 * 5 = 25

So how can you keep your Quality Score high?

  • Improve your CTR. Effective ads and targeting tells Google you are providing something of value to users.
  • Keep ad groups tight and only include relevant keywords. That way, your ad copy will be hyper-targeted. Make sure you don’t have more than 20 keywords in each group. If you do, review your keywords and see if there are keywords you could segment out into its own ad group.
  • Relevant landing pages. The landing page your ads point at should match your AdWords offer. For example, don’t offer 30 percent off in your ad copy if there’s no way to claim the discount on your landing page.
  • Build a great reputation. The better your account performs historically, the better Quality Score your new campaigns will get.

3. Should I Continue Spending Money on AdWords?

Google AdWords can be quite expensive. It’s not for every business. There’s no reason to invest money in any channel if the ROI isn’t there.

So how do you know if you are getting the right value for your money?

Many people track their dollars as far as conversions. But if you aren’t in an e-commerce business, a conversion might just be a lead (i.e., an email address and some personal information you collected). It’s important to go a step further and track ROI that resulted from conversions.

Make sure your conversion tracking is set up correctly. Not sure how to do it? Read this.

If you know the exact revenue you collected from AdWords campaigns, use it to determine your ROI:

Revenue – Spend = ROI

If you continuously find the ROI to be negative, there is a high chance that you’d be better off investing your money elsewhere.

In case you don’t know what your exact revenue from AdWords is, use the following formula to estimate it:

# of conversions * Conversion Value = Revenue


Conversion Value = (1 / # of conversions it takes to get one sale) * Average Sale Price

For example:

If you close on average 10 percent of conversions that come from AdWords, the average sale price of your product is $50, and your AdWords campaigns resulted in 12 conversions last month, your estimated revenue for that month becomes:

12 * 10% * $50 = $60

Then all you need to do is compare that number to the total cost of your campaigns for the same period of time and decide whether you wish to continue investing in AdWords.

Featured Image Credit: Unsplash