Why “Limited by Budget” is an Easy Win for your Paid Search Strategy

The phrase “limited by Budget,” regardless of whether you’re are an agency or advertiser, should be one notification that you are excited to find in an AdWords account, as it should always mean opportunity.

To an agency, it means two things:

  1. Given an opportunity to audit a prospective client’s account, I have a way to steal business from a competitive agency.
  2. It immediately gives me an opportunity to score an easy win for a new or existing client.

To an advertiser, it means:

  1. You can likely increase your sales/revenue just by increasing your spend.
  2. If you are unhappy with your return on ad spend (ROAS), there is likely fat you can cut and improve your ROAS/cost per action (CPA) pretty easily.

My point is, if you can reduce your waste, for every dollar you save that is one more dollar spent on getting you more qualified traffic. Or in terms of leads and dollars: If you are limited by budget with a CPA of $30 dollars, and you find $300 in waste, that is 10 more conversions at the same exact spend.

That is a WIN, WIN, WIN situation.

Here are some of my quick tips to find the fat:

  1. Device Segmentation – while best practice today is managing a paid search account differently for desktops, tablets and mobile devices, two of every three accounts I evaluate are not setting up, analyzing or reporting on performance this way. If your account is limited by budget and isn’t setup to target by device, then you can quickly see performance by using the “Segment” feature in AdWords.
  2. Day Parting – Even the best paid search managers can mess this one up. Cost per clicks, conversion rates and CPAs will vary by hour. Again simply using the “Segment” feature in AdWords, you can analyze your campaigns by Day of the Week and Hour of Day.
  3. Keyword Match Type – If you are not using negative keywords, or evaluating the search queries that are driving traffic to your website, then almost assuredly you are wasting impressions, clicks and inflating your CPAs. Any reduction to wasted impressions boosts your click-thru rate, which helps your Quality Score. This lowers your costs and, obviously, reducing wasted clicks is an immediate savings and boost to your conversion rates.
  4. Dimensions – Geographic analysis can be huge when you are talking about being limited by budget, as not all locations are going to convert at the same rate or at the same CPAs. E-commerce clients that do not have free shipping for all products and locations run into this situation frequently, as shipping costs can often prevent conversions.

This list could be much longer and less detailed, but I wanted to show you the benefits of being limited by budget and why, for me, it’s a sign for opportunity.

There is a caveat to this: Everything is based on the idea you have accurate sales and conversion data. If you are concerned you may have tracking issues seek out a data-collection partner, as your optimizations/analysis is only as good as your data.



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