Daily Budget Caps

For a more in-depth explanation of Budet Caps and their impact on ROI, read our published work, “The Art of the Daily Budget Cap.” While written in 2005, the principles still apply today.

PPC Campaign creation often happens under deadline, or in high anticipation of submitting extensive keyword lists and weeks of creative writing. Commonly, the Settings Tabs of PPC campaigns, where budgets and geo-targeting are set, receive disproportionately low attention. When high performing keywords are capped at low budgets, we see mediocre results. When high performing keywords are sharing budgets with the lowest performing keywords, we see mixed results. When the high performers and low performers are sharing low budget caps, we see poor results. When low performers consume most of the budget cap, we see negative results, and are effectively going backwards.

With high turnover in Digital Marketing, accounts are often passed along from agency to agency, employee to employee, resulting in long-standing false assumptions as to how and why campaigns were previously created.  In such cases, failure to review the status quo dictates future results, invariably causing loss of revenue.

While Google and Bing’s Artificial Intelligence capabilities are advancing, the ability to predict “recommended daily budgets” for every account and every campaign in those accounts is a crap shoot, at best. This is especially true when that intelligence is based on historical data patterns that are no longer relevant due to recent or sudden changes of user behavior. Think Covid-19.

Now more than ever, the upper limits of daily budget caps must be tested for the highest performing keywords in order to ensure a true, absolute top impression share.