In AdWords, you have the option to either assign a daily budget to a campaign, or apply a Shared Budget to allocate budget across multiple campaigns. Shared Budgets allows you to group a bunch of campaigns together and manage their budgets together.
In theory, it let’s Google decide on where it should distribute the budget. If you have 3 campaigns sharing one single budget, and campaign A would benefit from having more budget than campaign B, Google is meant to recognise this and then distribute accordingly.
But today I’m here to share with your why the use of Shared Budgets across accounts makes me sooooo angry, hopefully making you angry too. Grrrr!
Why do marketers even use Shared Budgets?
Time is money
It’s argued that Shared budgets saves you time having to split small budgets multiple times across campaigns, as well as making it easier to manage account spends. You may think it’s an efficient way to manage your budgets and performance, and you are right for the short term. Trust me though, you’ll waste time in the longer term having to go back and forwards to try and continually improve your campaign performance.
If you have lots of campaigns and either Small/Large budgets, it can make management easier
If you have a really granular account structure and either a really small or really large budget to work with, I can see your point on not wanting to divide such budgets evenly across 100’s of campaigns. But I still think that there are better ways of managing your spends for such accounts through the use of Labeling (see below).
Some marketers think it will help you counteract the Adwords overspend changes
I’ve seen the adoption of Shared Budget use increase since Google’s overspend changes last year, but it won’t save you from this completely.
Why do Shared Budgets make me angry?
It’s lazy optimising
With Shared Budgets, it can sometimes treat a campaign that’s performing badly the same as one performing well in your account. You need to be giving your best performing campaigns the most budget, pulling away from those that aren’t working to your goals. Particularly if you have a conversion KPI to achieve.
You can miss peak traffic times
Depending on how you have setup your Shared Budgets and campaign settings, it means that you run the risk of missing your peak trading hours with limited to no visibility on Google.
The problem with this is that unless your campaign’s traffic is spread evenly throughout the day, every day, this could mean that campaigns will not receive the budget that they need to achieve the most clicks during peak. This can result in an artificial spend prediction. Google could then decide to limit campaign A’s spend based on Campaign B’s projection; which causes you problems.
In this scenario Campaign A would lose out on valuable traffic because Campaign B was too hungry and cannibalised the budget.
You can of course solve this issue by ‘Accelerating’ your campaign delivery method. However you then run the risk of hitting your Shared Budget cap much quicker in the day, probably making the situation worse.
Yes you could overlay bid strategies on top of this to help focus the spend in the right areas, but even with this added i’m still not convinced of a shared budget approach to driving the best performance for you.
You can easily fall into a trap of optimising spends through Budgets instead of Bids
This is really important. Far too often have I audited accounts and seen ‘Limited by Budget’ statuses caked all over my screen. It means your account impression share is limited by budget. Alarm bells ring for me when I see these across accounts. It tells me a few things…
- Your campaigns need to be broken out (you have too many ad groups and keywords within one campaign)
- Your Max Bids are too high and your budget is too low
There are of course other reasons for this (Quality Score issues, structural issues etc.), but most of the time it’s because you’ve fallen into some lazy optimisation techniques.
When campaigns haven’t been grouped correctly in Shared Budgets
If you are going to use shared budgets, at least group your campaigns based on performance! More often than not, this is how I’ve seen Shared Budgets setup and it seriously limits bettering your performance.
They used to be a pain in the bum to remove once they were applied
Luckily, the “more helpful” Adwords interface has given us more flexibility over this and made it much easier to add/remove Shared Budgets. In the old Adwords you could easily add Shared Budgets but it was much harder to remove them. This is less of a pain now, but I’m in a moaning mood so let me carry on.
What should you do?
STOP using Shared Budgets, move to a smarter individual campaign approach
Trust me, switch to individual budgets for your campaigns and tier your campaigns focused on performance. This will then allow you to ensure your Brand is 100% covered and your budget then works around pushing/pulling Generics. It will free you up to optimise your spend more strategically through your Generic campaigns, giving more budget to your high performers and lower budget to the low performers; driving a better performance overall.
If you are stubborn and decide to ignore this post, then for the love of god please have a solid structure to your shared budgets
At the very least you should have your Shared Budgets tiered in such a way to allow you to tier your campaigns to prioritize performance. You can follow the below as a simple foundation;
- Brand campaigns
- You need to make sure that you have sufficient budget to cover off your brand with maximum impression share
- High performing campaigns
- Performing campaigns
- Low performing campaigns
- High performing campaigns
- Performing campaigns
- Low performing campaigns
But seriously, at least test individual campaign budgets instead.
Don’t optimise spend with budgets, optimise spend with bids
If you are optimising your account correctly, you should hardly ever need to touch your campaign budgets; no matter how big or small your overall marketing budget is. Make sure that you have your bids applied at keyword level (not ad group level) and optimise your spend through your keyword bids instead of tampering with your campaign budgets. You’ll also then start to see that you get less ‘Limited by Budget’ statuses in the Adwords interface.
If you are still seeing issues with ‘Limited by Budget’ statuses, try working on Improving your Quality Score.
Utilise labels to give your campaigns some dimension
I do buy the argument that Shared Budgets allow you to group your multiple campaigns into bitesize chunks. But you can do the same as this with Labels, and actually do a lot more with them. Group your campaigns together with Labels and you can feel a bit more comfortable about managing your campaign performance. This is a good start if you wanted to move away from Shared Budgets.
Shared Budgets FAQ
What is a good budget for Google AdWords?
When asked about what is a good budget for your Google Ads account, you need to take into account all of the different variables. Your industry, how competitive the auctions are, the search queries, your objectives, your profitability & more. There isn't a single answer for this. It's therefore recommended that you seek expert advice and do your research!
What is a shared budget?
Shared budgets in Google Ads are a feature that lets you define a single daily budget that is shared by multiple campaigns in your account. Campaigns in a shared budget will all share this single budget amount.