How to Get More From Your PPC Advertising Budget

If you are currently on defense in terms of your marketing strategy and find yourself faced with a reduction in resources, this article can help eliminate waste in your marketing budget while minimizing impact on bottom-line results.

To get the most out of it, you should have an established set of marketing objectives, solid tracking and analytics, and reasonable KPIs and benchmarks from which to compare from.

In this series, I am introducing ways to make each dollar of your marketing and advertising budget work harder by freeing up money being spent on what’s not working and reallocating it to areas where you are gaining traction. When done properly, this cuts the dead weight and accelerates growth and customer acquisition at the same time.

To that end, I’m introducing a strategic framework that will help to prioritize all of the opportunities, which is the impact vs. effort framework.

Routine reviews should be part of your organization’s media planning and buying process, whether you are working on them internally or have an agency helping you out. Optimally this is done proactively, and not only a month before the contract is up.

Priority One: High Impact, Low Effort Activities

Eliminate non-converting search queries and keyword targeting

In order to get the most leverage, you want to go as far upstream as possible when conducting analyses. The highest upstream analysis is to review targeted keywords and search terms on a longer-term basis using an n-gram analysis to find root phrases that appear frequently and don’t convert.

“N-gram” is a tool that looks across a set of words, phrases, and so on and identifies n number of word patterns. For example, a 2-gram finds phrases containing two words, and reports back the related performance against KPIs for it.

“Over the last 120 days, across 10 campaigns, the phrase “blue shoes” appeared 1,258 times, has a low clickthrough rate and 0 conversions.”

If you only sell red shoes, this kind of insight is very powerful.

So, aim for greater leverage by looking for n-grams instead of individual keywords and search terms because they get at the inefficient patterns instead of just inefficient instances.

A word of caution: before blocking these root phrases based on poor performance at face value, ensure that the ad and landing page are relevant to the keyword first.

Google these keywords and search terms to understand if the SERP is commercial in nature, see how competitive it is, notice any SERP features in play that may be prohibiting your text ads from having as much attention as they otherwise would.

If you can rule these items out, then it’s more likely that a strategic retreat will make sense for you.

Eliminate non-converting and low-value placements from display, programmatic and video campaigns

Like with keywords and search terms above, we want to attack display and video placements from the highest level possible, which means at the account level first. You may want to block entire categories of placements like in-app, or select inventory types at the campaign level (expanded, standard, limited) to get proactive on quality and brand safety.

Black Lists and Scripts

You will find sets of “black lists” available online from other advertisers who have already done a lot of legwork for you by identifying low-quality placements, parked domains, 404 pages, and irrelevant content. Take advantage of their goodwill and prevent your ads from showing there before it happens!

If you are running ads on the Google Display Network (GDN) you will find a number of scripts that do useful things like blocking entire root domains you specify as soon as they show up in your placements list. This ensures that they are caught early before accruing a lot of click volume and cost without adding any value to your campaign. Many times, these root domains are either some of the newer extensions or irrelevant international root domains like .in or .cn.

When reviewing your placement lists, if you suspect any ad fraud such as through unreasonably high CTR or spammy domains, reach out to your platform representative or support team to request a refund.

Display Audience Exclusions

There are additional ways to go after this, like excluding specific audiences from your targeting. What’s always true about your product or service? Now invert that “ideal customer” in your mind, and think about what qualities the people who would never buy from you have. This often reveals large swaths of people you can exclude from your campaign targeting, making your buy more efficient! Here are groupings of audience exclusions available to you on most platforms:

  • Demographics
  • Job Titles
  • Behaviors
  • Interests
  • Search Terms

Renegotiate Your Contracts

You might be fortunate enough to possess some leverage as a “client”. Reach out to your service providers, vendors, and software platforms to see if they will work with you in the interest of your long-term partnership. Put yourself in their shoes and see that you are both trying to control for risk in your respective businesses, and see if there’s a win-win to be had.

There are many ways to spin these in your favor to cut costs or improve cash flow, like:

  • Longer payment terms
  • Payment plans
  • Performance-based management fees
  • Downgrade subscriptions
  • Cut tools that haven’t been used entirely
  • Switch to free options
  • Switch to more manual work that require time instead of dollars

Priority Two: High Impact, High Effort Activities

After the easy wins are taken care of, it’s time to move on to the more difficult but equally important areas of focus. Often, these are areas of ongoing focus and opportunity, so make sure to block some time out regularly to review them.

Stop bidding on brand

Although there can be several benefits to bidding on your own brand name in paid search, such as protecting your position in the search engine results page from competitive bidding and gaining incremental clicks, if brand terms are utilizing a large percentage of your budget that could be used to message to customers with a higher probability of being net new, the cost to benefit analysis might tip in favor of making a move.

You could run it in phases and observe your overall ecosystem (period over period, year over year) or run at reduced levels to find a level of ad spend efficiency versus conversion volume that makes sense for your new situation.

The question you ultimately want to answer is: “how much do my overall leads and conversions suffer if I divest entirely from bidding on my brand name in PPC?”

If you’ve already backed off on brand keyword bidding, another related area of focus is to stop bidding on non-brand terms where you have a high organic ranking. There are a few reasons you might do this:

  • The query intent is more informational and less commercial in nature, resulting in a SERP in which you have poor clickthrough or conversion rates via paid ads
  • Relatively low risk if you can hope to recover the majority of the conversions through organic search, but again, run a test to determine how incremental paid conversions are using a reasonable multi-channel attribution (MCA)

Seek Better Arbitrage Opportunities

Budget allocation

There are two levels to do this kind of thinking at, looking at resource (dollar) flows in your marketing mix. The first is to look at budget allocation using the Pareto principle, and ask yourself “what 20% of marketing channels or campaigns are creating 80% of the returns?”

Once you have the understanding on a high level of what is working, ask yourself “how might I double the amount of budget for what’s working right now?”

Sometimes, the best marketing channel for you is one that you haven’t tried yet. I’m a firm believer that you need to reserve some percentage of your marketing and advertising dollars for some calculated bets and swing for the fences—putting resources into an emerging or un-proven channel to the extent that there’s a high degree of uncertainty but also a 1% chance for a 10x or 100x payoff.

Bidding

The second opportunity is a little bit more nuanced and truly takes ongoing testing to get it right, and that is in the area of bidding. In the last few years, all advertising platforms have evolved their bidding options and there are many more choices than cost per thousand impressions (CPM) and cost per click (CPC). The beauty is that now, advertisers get to choose how they would like to pay, and with that choice comes the ability to optimize for greater efficiency.

When you bid on impressions, generally, you are aiming for reach.

When you bid on clicks, generally, you want to generate traffic.

If you know both the end goal that you would like to happen, as well as your benchmark numbers for efficiency statistics like clickthrough rate, cost per click, and conversion rate, you can run some calculations to determine if a different bidding method would be beneficial, even if it is counterintuitive at face value.

It may seem like minutiae, but even a slight advantage when scaled across hundreds of thousands of impressions can really add up, so the more advertising you’re doing, the greater impact this can have on your bottom line.

Deeper segmentation on the audience targeting side

A word of warning: the algorithms that control ad delivery are getting so good these days that if you can feed them sufficient conversion events, doing deeper segmentation may actually hurt more than help. However, if you are running in a lower event-volume account, OR running manual settings like CPC bidding and have limited tracking, it could be right for you. Perhaps not globally, but in specific campaigns or channels it would make more sense.

There are a few categories of segmentation that you may want to turn to, in a similar way that you would on the audience exclusion front. For instance, geographic, day of week, time of day, device are all available options for bid adjustments and exclusions in some cases.

Conclusion

Although by no means an exhaustive list, I’ve shared nine ways to thoughtfully improve the impact of your marketing budget by prioritizing low-hanging fruit waste elimination followed by strategic changes in targeting and marketing services.

Based on implementing these recommendations for digital advertising clients past and present, I have a high degree of confidence that most advertisers can save 5% – 20% or more of their marketing spend while maintaining similar, or in some cases even better results.

If you’d like help running this sort of audit on your own campaigns, don’t hesitate to reach out to us.