To display your ads on Google, you should set a budget and bid at your campaign and ad group level. Your budget determines the amount of money you want to spend on a given campaign. It is therefore important that the daily budget is comfortable for you. It is possible that actual costs will be actually lower than the fixed amount, based on your bid management.

Your bid is the maximum amount you’re willing to pay per click. If you control your bids, you can influence the traffic received by your ads, as well as the ROI they generate. With higher bids, your campaign will be more likely to get more traffic. With lower bids, you will probably improve your campaign ROI, but also receive fewer clicks and conversions.

google-adwords-bidding-budget-settings

Here’s how to set a bid and a budget in a new campaign and how to estimate your spend.

Set your bids and budget for a new campaign

  1. Sign in to your AdWords account at http://adwords.google.com.
  2. Click the tab Campaigns .
  3. In Online Campaigns, click + New campaign .
  4. In Section Bidding and budget of your campaign settings, select a bid option. If you choose the bidding option “manual”, also enter a default bid.
  5. The amount you enter in the field Budget must match the average maximum daily amount that you are willing to pay for your campaign.
  6. Click Save and continue. Note that you are prompted to create and save your ad group on the next page.
  7. You can always change your bidding option and your budget. To do this, go back to the settings tab of  your campaign.

 

About bid options for your campaign

AdWords system is based on an auction system and onn criteria of both quality and bid amount to determine the position of your ad. So even if your competitors define a higher bid than yours, it is always possible to obtain a higher position at a lower price due to the relevance of your keywords and ads. You pay only the minimum amount needed to get a better ranking than the advertiser just below you, you often pay an amount less than your maximum bid. The amount you pay is called actual CPC.

AdWords Fundamentals

Your maximum cost per click (max. CPC) is the maximum amount you’re willing to pay when someone clicks on your ad. With higher bids, your campaign will be more likely to get more traffic. With lower bids, your campaign is likely to improve its return on investment (ROI), but it will get fewer clicks and conversions.

Two auction options are available:

  • Manual bidding: This is the default option, which allows you to manage your own maximum CPC bids. You can set bids at the ad group or keywords level.
  • Automatic bidding: if you just start using AdWords (or if you’re too busy), we recommend that you use this option. In fact, once you set a daily budget, the AdWords system will adjust your bids on your behalf to bring you the greatest possible number of clicks within your budget.

Tip:

The keyword planner tool allows you to get an estimate of your traffic (estimated number of clicks, number of impressions or average CPC for your keywords). These estimates can help you set your bids and budgets.

 

About your campaign’s budget

Keep in mind that the amount of your budget applies to a single campaign. The budget for your campaign should be the maximum amount you are willing to pay on average per day for a month. If you use a monthly advertising budget, you can estimate your average daily budget, dividing the total amount by 30.4 (the average number of days per month). Note that this estimate may vary slightly, some months have with more days than others.

Tip:

Start small. If you’re new, try a daily budget of between $10 and $50. Check your account shortly after you apply a new budget to assess the performance of your campaigns.

 

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