Question

I'm not an agency, I'm a user (lol). Just compared 2019 and 2018. Possibly apples to oranges, 2018 was a regular campaign and 2019 was a smart campaign (and google set it up on a complete different account so now that data isn't in my regular account. grr. ) Anyway, questions, both types of accounts performed quite similarly , it appears for 31¢ to 32¢ I get my leads from Google. In 2019 I spent $500 more dollars than 2018, got approximately 1000 more clicks (smart campaign), and added about 26K more in gross. Impressions for both years was 002¢ or 004¢. These numbers, also figured out that based on my gross and my visitors, in 2018 I made $1. 31 per session and in 2019 $2. 00 per session (don't know if any of that matters). but the question is, is it reasonable to just follow the math to say if I want to gross, 2 or 3 times as much , ad spend should be x based on increases? I do this for all things thinking it is at least one way to forecast but . just curious if it makes sense.  

Answer 1

I love this question. Thanks for all the details @needle. When it comes to campaign budgets we have to be cautious on how aggressively we increase the budget. Think of it like a birthday party. If you had a slice of cake would your stomach hurt? Probably not. In fact one might say “if that was delicious I bet 3 more slices would be awesome” hahah. My kids would love that! We all know it would kill our stomachs and cause some pain. If you increased your budget that high right away Google would try to meet the demand! It will send whatever it can in your direction. We have to take it slow. Let the algorithm adjust. Run through your optimization routine. Then if everything is as usual go ahead and try it again.  

Answer 2

Hmmm. more seo? Is that my optimization routine? Not sure what you mean. I would eat the three pieces. Good analogy

Comments

@needle Sorry, haha I didn’t mean to confuse you. My point was don’t increase your budget aggressively. Increase it by 10% at a time. Your optimization routine. things like increasing/decreasing bids, ad copy testing, landing page work, negative keywords etc. Anyhow, just take things slow.  

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I still want cake.  

Answer 3

You can't just assume that if you double the budget, you will double the conversions. So far, with optimization, our manual campaigns beat smart campaigns.  

Comments

@dig6 As we work with a lot of service industries, one of our most important metrics is CPA. When we take on a client that had a smart campaign, we usually have between 6-12 months of data to look at. After usually 2-3 months, our campaigns can drop the CPA by 10-50%, and in some cases, the lead quality goes up. It is hard to pin down an ROI, as most of our clients don't make the same amount for each job and we would use their base (or starting) fee to determine ROI, which is inaccurate. As an example, we have an HVAC company that uses us and Home Advisor. He audited his account at the end of the year and found HA's CPA to be $174 and our CPA was $249. Even though our CPA was higher, the average HA ticket was $750 and our average was over $1500. Even though we couldn't beat their CPA (and they are most assuredly using smart), our lead quality was much higher.  

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@penicillin thank you. I wanted to know if the time saved using smart ads paid off. I guess not. But for small, low budget clients (or for a test). it might make sense to start with smart ads and then do more custom work as the engagement grows?  

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@dig6 Not in my opinion. Think of it this way. before Google was pushing so much automation, there were certain requirements to even apply the AI (30 conversions to activate ECPC for instance). Now, they want to apply the AI from the beginning. Small clients don't have the budget for the learning time. They need an experienced manager to take control, keep their costs down and turn conversions. That is why so many of our clients come to us after either having a smart campaign built for them or setting it up themselves.  

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@penicillin that makes total sense! How about AI after humans have optimized it? Is there a point where this can scale (somewhat) on its own?  

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@dig6 We don't implement any AI until we have a lot of data. At that point I would run an experiment with 50% of my budget to see if automated can beat what we are doing.