Wrapping our minds around campaign budget optimization seems simple enough. All you have to do is make sure there’s no money being wasted and that you’re not over-bidding on keywords, right?
It sounds easy enough, but it really isn’t. Identifying the flaws in your own campaign is much harder than if it were someone else’s, and this goes for finding out if more money is being spent than should be.
Optimizing your campaign spending is easier if you know what you’re looking for though. So, in this blog post, we’re going to cover the top reasons for a campaign losing money.
Campaign Budget Optimization
Reasons for Budget Loss
1. The Paid Ad is Bad
There’s no easy way to put it, the ad you designed could be downright terrible. If you’re new to the game, then this is the most likely explanation as to why your budget isn’t being spent efficiently.
Creating ads is an art of sorts. Depending on the type of ad you’re running, each element has to be engaging – a video has to draw customers into watching it, the text mustn’t be boring (it’s the first thing people will see), and images need to be eye-catching without overwhelming people.
And after all that, you still have the challenge of picking the right audience. If you create the perfect ad, it’s only going to perform optimally if it’s shown to the right people (if not, it’ll won’t reach its full potential).
The bottom line: if you don’t know what you’re doing and create an awful ad which doesn’t appeal to the right people, your budget is being wasted. In this case, contacting a PPC agency to work on your behalf would be ideal.
2. Not Letting Ads Run Long Enough
Another mistake that is made well before campaign budget optimization is even considered is cancelling ads before they’ve been run for a decent amount of time. This can be forgiven for those on a smaller budget, but it’s still something to avoid.
Running an ad for just a few hours or even a day is too short. It simply doesn’t gather you enough data to work with, and this is important. With the data we get from running different ads, we’re able to learn what works and what doesn’t – ultimately, we’re trying to discover what ads people respond the most to.
Giving your ad anything less than 48 hours will hinder your findings and thus, is a waste of money. Our suggestion is that, at the very least, you leave a new ad running for 48 hours. This provides 2 full days of data which can then be analyzed for improving future ads. Even if the ad was a flop, this data means your budget wasn’t completely wasted.
3. Targeting a Broad Audience
Creating an ad is only half the battle, finding the right audience is the other half. Realizing how tedious it is to really think about who your customer is – where are they from, what interests them, are they male or female? – can discourage some people from undertaking this task. Unfortunately, it’s an essential part of campaign budget optimization.
If you’re targeting a broad audience, a huge number of people who have zero interest in your business will be shown your ads. This is a lot of money being lost.
Narrow down your target audience and be really specific about it too. There’s no use in targeting millions of people when only a small fraction will even consider buying your product.
4. Spreading Money Across Too Many Platforms
It’s natural for businesses to split their budget between multiple paid ad platforms. New marketers, in particular, should avoid doing this though if they want to optimize their campaign budget properly.
Think about it: you’ve just decided to spend $2,000 per month on online marketing and you choose Facebook Ads and Google Ads. What could go wrong? A lot. You’re going to be trying to pinpoint your ideal customer, setting up location targeting, and split testing your first set of ads. Doing this for both platforms isn’t easy and it leaves a lot of room for errors to occur.
Preferably, until you’re in the groove and have a rough idea of what’s working on one platform and have a bigger budget to experiment with, focus on a single site. Not only will you remove the risk of making common budget mistakes, but investing more into one platform speeds up the data retrieving process and ultimately enables you to create better ads sooner.
5. Lack of Scheduling
On platforms like Facebook where scheduling is available, there’s no excuse for not using it. Unless your target audience is nocturnal, running ads in the middle of the night is useless.
Running your ads on a schedule is essential for campaign budget optimization because it prevents ads from being run at times when your audience isn’t going to pay attention to them. Some people hop on Facebook in the middle of the night for the sake of doing so, but the chances of them actually considering an ad’s offering is very little.
By enabling a schedule, you can have your ads running in your target audience’s active hours which won’t just optimize your budget, but it’ll improve the conversion rate too.
6. Thinking that CRO and CBO Are the Same
Recognizing a high conversion rate as the sole indicator of a successful campaign is a common mistake. Other factors, in this case how the budget is being spent, are indications of how successful a campaign is.
CRO (Conversion Rate Optimization) and CBO (Campaign Budget Optimization) aren’t identical. The goal of CRO is to maximize the number of your audience who convert into customers, whereas the goal of CBO is to make sure your campaign budget isn’t being wasted and identify any areas where money can be saved without compromising the efficiency of the campaign.
Both of these processes are very important but you must recognize how they’re different and how to approach them separately.
7. Bidding on the Wrong Keywords
Another problem we see in campaigns is people bidding on the wrong keywords, and not using the right types of keywords (on Google Ads in particular).
So, you create an ad and you get a significant amount of engagement, but you’re just not getting the conversion rate you’d have liked to get. One big cause of this is bidding on the wrong keywords. If you don’t do keyword research to discover which keywords are going to benefit your campaign the most, you could end up inadvertently targeting the wrong people. This would be a big waste of money.
The takeaway here is to do the keyword research and find out which keywords you should be targeting. From this, you can be confident that your money is getting your ads in front of the customers who will consider purchasing your product/service.
Spend Wisely with KonvertLab
Even with a great strategy in place which delivers a respectable conversion rate, there can be gaps in your strategy which lead to spending more than you should be.
This is why campaign budget optimization is important. Cutting down on excessive spending means you have more money going into the right places, thus getting you more conversions for your money.
Understandably, it’s a challenge for most people and calling in the pros is the best step forward. Our team at KonvertLab don’t back away from challenges like this and deal with budget optimization frequently. Book a call with us today and let’s start growing your business together!