Water Line Budget - Adwords
- SEO |
How much money do I need and how do I set up and manage an effective campaign? these questions are asked by many new marketers venturing into the realm of search engine marketing.
When first starting out it will be that many people will be introducing their own funds into the campaign/s as there will be no incoming monies from your own product or affiliate sales. For this reason these initial funds are deemed as seed funds that are used to initiate the growth of your marketing campaign.
It is very important at this stage to think of consistency / regular seed fund installments over and above a once of payment. Managing a campaign will require a long term view plan, while some people manage to produce a profit early on in many cases it can take many weeks or months to establish a consistent and regular profit. After you start to establish some consistent sales you can in effect start to phase out your seed funds.
With many variables involved in managing your account funds, such as seed funds, payments from product and or affiliate sales and to when that money goes into your account so it can be used, the number and price of your keywords, the number of ad groups running, ad click through rates, conversion rates and many other factors getting the correct budget set for your campaigns can be a real nightmare for most at any time.
When first starting out this is where your seed funds come into play, this does not need to be a large amount of money but it must be comfortable and realistic for your current position for example a company with a large budget may allocate hundreds of dollars per week if not more where a small home based private person may only allocate $70 as an example per week.
When calculating your seed funds, some rumors would have it that you need big pockets full of cash to get underway, this is however a wrong perception often spoken by those with little hands on knowledge. Yes you can work faster with larger amounts of cash that would be true, but it also applies like in the tale of the tortoise and the hare that a smaller amount will get you to your destination just as well, and in many ways will let you understand the basics allowing you to develop better account management while operating your new account holding you in good stead for when you scale up your account at a latter stage.
The most important thing here will be the consistency of those payments so make it realistic, what we do not want to see in your account is large spikes of up and down periods of activity where people may have made a payment, spent that in several days then left the account non operative for a week or so until they found some more money, a even gentle flow of funds with a gentle consistent wave is a far better approach.
After establishing your correct seed budget the next step is to determine the correct amounts to apply to each campaign, as some will have more ad groups / keywords than others, prices will vary along with click through and conversion rates, the addition and or deletion of ad groups and keywords, fluctuating market prices to run a set position for your ad and then incoming sales and or commission monies need to be thrown into the mix along with many other variables can make the budget confusing at best.
To eliminate this confusion by following the principle that when water is poured into any object / surface it will auto level itself out. By using this analogy we can apply this to managing your SEM budget and structure regardless of campaigns, keyword pricing, numbers of keywords or any other variable.
If your just starting with your set / seed budget you simply do this easy sum, starting by the current day your in count to and include the day you add your next funds, then add one more day. So as an example if today was Sunday and you did not have any more funds available to add until next Sunday you would count 8 days then add one ( to allow time to bank the funds into your account ) giving a counter / divisor of 9.
From there you would check the balance in SEM account (always add funds prior to these sums) and lets say your balance was ? $182.47 you would then divide that by the divisor number (9) = $20.27 from there divide that by the number of campaigns you have running, so lets say i have 2 campaigns running that would = $20.27 / 2 = $10.13.
Type $10.13 into your daily spend section of both campaigns. Again here it is for examples only but the important thing is we keep you account moving at all times, with no jumpy starts and stops. The water line budget set will let you travel the week, add some new seed and or sales / affiliate funds and do a re calculation, setting it for a new week.
It may seem strange at the start where for example you may ask questions like, if I apply the same amounts to both campaigns (in this example) and one only uses half the funds and the other campaign needs more how does that work? as on the surface it makes no sense.
Here is where the water line budget goes to work, after the first week there would be a carry over budget left in one campaign being the half that was not used, example (approx $10.13 / 2 * 9 days = $45.58), now because new seed funds / or sales / commissions have been added both campaigns are restocked as original but the extra that was left in the one campaign is now divided by the 2 campaigns, giving the one using the extra clicks further money to spend this coming period = balance / 2 = $45.45 / 2 = $22.79 extra being allocated to the campaign needing more funds.
Regardless of how many campaigns you have running / prices and or number of keywords, quality score or even if you add or delete campaigns / any other variable the system will auto balance itself each time you update the system becoming more accurate and effective as you use it, while at the same time being easy to use and understand.
In addition to the update of the set budgets, you can at any time adjust the water level budget, it may be for example that you have 3 days to go before the next update but wish to reset the water line budget, it can be done by just using the same sums counting today + how many days until the next funds go into SEM account plus one to determine your divisor, then to get your balance and reset the water line budget. It is possible to do this daily or even several times a day if you wish.
At some point as you move forward, affiliate cheques and sales will be banked into your account in addition to your seed funds giving a bigger budget to work with and or you would be in a position to slowly phase out your seed funds, finally dropping them as your sales / affiliate commissions increased. Looking forward, to keep the system going and to build momentum add a little of your profits back to your base budget, as this will allow for your business to grow as it ages.
When first starting out it will be that many people will be introducing their own funds into the campaign/s as there will be no incoming monies from your own product or affiliate sales. For this reason these initial funds are deemed as seed funds that are used to initiate the growth of your marketing campaign.
It is very important at this stage to think of consistency / regular seed fund installments over and above a once of payment. Managing a campaign will require a long term view plan, while some people manage to produce a profit early on in many cases it can take many weeks or months to establish a consistent and regular profit. After you start to establish some consistent sales you can in effect start to phase out your seed funds.
With many variables involved in managing your account funds, such as seed funds, payments from product and or affiliate sales and to when that money goes into your account so it can be used, the number and price of your keywords, the number of ad groups running, ad click through rates, conversion rates and many other factors getting the correct budget set for your campaigns can be a real nightmare for most at any time.
When first starting out this is where your seed funds come into play, this does not need to be a large amount of money but it must be comfortable and realistic for your current position for example a company with a large budget may allocate hundreds of dollars per week if not more where a small home based private person may only allocate $70 as an example per week.
When calculating your seed funds, some rumors would have it that you need big pockets full of cash to get underway, this is however a wrong perception often spoken by those with little hands on knowledge. Yes you can work faster with larger amounts of cash that would be true, but it also applies like in the tale of the tortoise and the hare that a smaller amount will get you to your destination just as well, and in many ways will let you understand the basics allowing you to develop better account management while operating your new account holding you in good stead for when you scale up your account at a latter stage.
The most important thing here will be the consistency of those payments so make it realistic, what we do not want to see in your account is large spikes of up and down periods of activity where people may have made a payment, spent that in several days then left the account non operative for a week or so until they found some more money, a even gentle flow of funds with a gentle consistent wave is a far better approach.
After establishing your correct seed budget the next step is to determine the correct amounts to apply to each campaign, as some will have more ad groups / keywords than others, prices will vary along with click through and conversion rates, the addition and or deletion of ad groups and keywords, fluctuating market prices to run a set position for your ad and then incoming sales and or commission monies need to be thrown into the mix along with many other variables can make the budget confusing at best.
To eliminate this confusion by following the principle that when water is poured into any object / surface it will auto level itself out. By using this analogy we can apply this to managing your SEM budget and structure regardless of campaigns, keyword pricing, numbers of keywords or any other variable.
If your just starting with your set / seed budget you simply do this easy sum, starting by the current day your in count to and include the day you add your next funds, then add one more day. So as an example if today was Sunday and you did not have any more funds available to add until next Sunday you would count 8 days then add one ( to allow time to bank the funds into your account ) giving a counter / divisor of 9.
From there you would check the balance in SEM account (always add funds prior to these sums) and lets say your balance was ? $182.47 you would then divide that by the divisor number (9) = $20.27 from there divide that by the number of campaigns you have running, so lets say i have 2 campaigns running that would = $20.27 / 2 = $10.13.
Type $10.13 into your daily spend section of both campaigns. Again here it is for examples only but the important thing is we keep you account moving at all times, with no jumpy starts and stops. The water line budget set will let you travel the week, add some new seed and or sales / affiliate funds and do a re calculation, setting it for a new week.
It may seem strange at the start where for example you may ask questions like, if I apply the same amounts to both campaigns (in this example) and one only uses half the funds and the other campaign needs more how does that work? as on the surface it makes no sense.
Here is where the water line budget goes to work, after the first week there would be a carry over budget left in one campaign being the half that was not used, example (approx $10.13 / 2 * 9 days = $45.58), now because new seed funds / or sales / commissions have been added both campaigns are restocked as original but the extra that was left in the one campaign is now divided by the 2 campaigns, giving the one using the extra clicks further money to spend this coming period = balance / 2 = $45.45 / 2 = $22.79 extra being allocated to the campaign needing more funds.
Regardless of how many campaigns you have running / prices and or number of keywords, quality score or even if you add or delete campaigns / any other variable the system will auto balance itself each time you update the system becoming more accurate and effective as you use it, while at the same time being easy to use and understand.
In addition to the update of the set budgets, you can at any time adjust the water level budget, it may be for example that you have 3 days to go before the next update but wish to reset the water line budget, it can be done by just using the same sums counting today + how many days until the next funds go into SEM account plus one to determine your divisor, then to get your balance and reset the water line budget. It is possible to do this daily or even several times a day if you wish.
At some point as you move forward, affiliate cheques and sales will be banked into your account in addition to your seed funds giving a bigger budget to work with and or you would be in a position to slowly phase out your seed funds, finally dropping them as your sales / affiliate commissions increased. Looking forward, to keep the system going and to build momentum add a little of your profits back to your base budget, as this will allow for your business to grow as it ages.