Shownotes
Regina is here with her tried and tested 60/40 budget allocation rule that can help you optimize your Google Ads campaign performance effectively.
This formula states that 60% of your daily spend should target warm leads, while 40% will go towards cold traffic. With this rule, you won't need to worry about tedious data tracking or guessing which campaigns should get more ad budget. In this video, Regina dives deep into the rule, its dos and don'ts, and how to handle common challenges when clients want to reallocate or end campaigns too soon.
Imagine being able to make sound decisions on budget allocation without spending hours researching and trying different methods yourself! The 60/40 Rule has been proven as a reliable solution for businesses that want results easily without sacrificing quality.
Listen to this episode now and learn how simple it is to apply the 60/40 Rule in your ad budget today!
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0:00 The 60/40 Google Ads Budget Allocation Rule💰
2:03 Differentiating Cold and Warm Traffic
6:36 Issues and challenges in budget allocation
9:54 Need help starting with Google Ads? Let StarterPPC help you!
11:11 Exceptions to the 60/40 ad budget allocation rule
19:16 What to keep in mind before turning off campaigns
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Transcripts
Hi everybody.
2
:It's Regina here from Starter PPC.
3
:Today we're going to talk about
budget allocation per campaign.
4
:So how much daily spend should
be given to each campaign?
5
:I just want to start out by saying
there's no hard and fast rule here.
6
:There's no magical right answer
and, and the formula where I can
7
:say X percent to this campaign and
X percent to that campaign, right?
8
:Just because.
9
:Everybody's business is different.
10
:Every industry is different.
11
:Even seasonally things change.
12
:Things can even change if it's a
new account versus an old account.
13
:Right.
14
:also how much budget you have matters,
how big your market size matters,
15
:whether it's raining outside, whether
you're wearing pants, I'm just kidding.
16
:I will tell you that There is a rule
of thumb, like a formula that we tend
17
:to default to, and then there's a
million exceptions on top of it, but
18
:I'm, going to talk through the formula
and then I'm going to talk about a
19
:couple of the interesting exceptions.
20
:So the formula that we tend to
default to is the 60 40 rule.
21
:60 percent of your budget would go towards
campaigns that focus on getting new users.
22
:cold traffic, fresh meat, and 40
percent of your daily budget would
23
:go towards warm users, right?
24
:That people that were, most of them
were already on your website, or
25
:they've already heard about you
elsewhere, so they're searching
26
:for your brand name, most likely.
27
:that is something that we
tend to kind of default to.
28
:This is true when we're launching a
fresh new account with zero history.
29
:And this is true when we're scaling an
account that's been with us for two years.
30
:However, there are many exceptions to that
rule, which I'll get into in a second.
31
:when I say new users and new customers
and cold traffic, what I'm talking about
32
:is things like inbound search, right?
33
:So inbound search would be a campaign
where someone's searching for
34
:Tools, if you're selling tools and
they don't really know about you.
35
:They're just searching for tools.
36
:So inbound search, for example
that would be cold traffic.
37
:An example of very cold traffic would
be like, DSA dynamic search ads is
38
:another type of search campaign.
39
:That's really highly automated.
40
:So we do run those quite a bit,
but not with brand new accounts.
41
:We would usually wait and
run those a little bit later.
42
:Another example of cold traffic
account would be like outbound
43
:display outbound video.
44
:When I meet, when I say outbound, I mean
that you're choosing an audience, like
45
:an in market audience, which is one of
those buckets that Google has, right?
46
:Like Someone who's in
the market to buy tools.
47
:They've been searching for tools recently.
48
:They've been looking at pictures of
tools on the internet and watching
49
:videos full of tools on YouTube.
50
:And we decide to go after people that
are in market for tools and we show
51
:them images, lifestyle images of people
using your tools that, that'd be like
52
:an outbound display or video, right?
53
:Outbound video showing video to
like commercials basically to
54
:people that are looking for tools.
55
:Let's see, what am I missing?
56
:Shopping.
57
:Shopping is a little tough
because to shopping tends to be.
58
:Mostly outbound, right?
59
:Cause if you're on the shopping page in
Google, you're not necessarily looking
60
:for a specific brand most of the time.
61
:Although people could type in
a brand name into shopping.
62
:So shopping is a little bit of everything.
63
:Some shopping campaigns are more
outbound than others, right?
64
:Like standard shopping tends to go after
the cold traffic, whereas like a Pmax.
65
:Feed only campaign or what used
to be called smart shopping.
66
:It tends to do whatever it wants.
67
:So if it can find warmer traffic
over in the shopping area, it's
68
:going to go after that first.
69
:So someone who's in the shopping
area looking for brand or a user who
70
:was recently on the website, and now
they're looking for tools they're
71
:searching shopping network for tools.
72
:The smart shopping is going
to go after those people
73
:really hard compared to fresh.
74
:People.
75
:So it's a little bit warmer, but it's
still, considered a cold traffic campaign.
76
:Most shopping campaigns
is mostly cold traffic.
77
:Whereas standard shopping, you know, it's
not really going to distinguish between
78
:someone who was recently on the site.
79
:It's not going to necessarily go
after branded traffic any harder
80
:than it would somebody just searching
for tools who just popped up.
81
:middle of nowhere and
decided to buy tools.
82
:smart, so standard shopping tends
to be kind of a heavy lifter.
83
:It goes after that cold traffic.
84
:Obviously warm traffic campaign
examples of those would be video
85
:remarketing, display remarketing PMAX
full PMAX campaign, Tends to do like.
86
:80 percent warm traffic.
87
:If it can, it's going to try to go
after the, the easiest traffic first
88
:and then whatever money it has left,
it's going to go after cold traffic
89
:and you don't have much control or
even insight over how much of its
90
:money is it spending on, each activity.
91
:So that's something to watch out for.
92
:What am I missing?
93
:What campaign types am I missing?
94
:Those are like the main ones
that we tend to stick to.
95
:We don't hear it sort of PPC.
96
:We don't tend to do like.
97
:Smart campaigns much.
98
:we'll run like local ads, but
those are just an extension now.
99
:So they're kind of part of an inbound
campaign or part of a shopping campaign.
100
:So it has become.
101
:like an add on.
102
:now that you know the difference between
the two campaign types, I want to talk
103
:about some of the issues that we run into.
104
:oftentimes our clients will say,
Hey this campaign isn't working.
105
:I can see that it's not bringing a return.
106
:Please turn it off.
107
:And we spend a lot of our
energy saying, no, no, no, no.
108
:We can't turn that campaign off.
109
:Okay.
110
:Here's why this is happening.
111
:let me show you with an example.
112
:We will allocate money, for example,
towards a remarketing campaign.
113
:Okay.
114
:So down here, we've got remarketing six
czar a day, almost seven czars are, is
115
:like New Zealand new South African rams.
116
:That's what they are.
117
:So our client is based
out of South Africa here.
118
:Okay.
119
:Video remarketing is a campaign that
tends to not get very many clicks.
120
:And when it does, Google has trouble
tracking that user through to the sale.
121
:It's a really interesting phenomenon.
122
:I don't want to get into the
technical details right now.
123
:If you run any video campaign, any display
campaign, whether it's to remarketing
124
:audience or not, or a standard shopping
campaign, these three campaign types
125
:tend to be much less likely to be able
to track the users than something like.
126
:brand campaign, right?
127
:Brand is oftentimes the last
click before the sale, right?
128
:People have already they know about you.
129
:They're looking for you.
130
:They're ready to buy.
131
:It tends to have like
a one click conversion.
132
:our clients will come and say, Oh,
look, these aren't bringing a return.
133
:Look, I can see here in the return on
ad spend column that it's getting the
134
:lowest return compared to the rest.
135
:So let's take the money from these
campaigns and give it to these campaigns.
136
:Well, that messes up our 60 40 rule,
first of all second of all, we just can't
137
:rely on the tracking to tell us whether
these campaigns are working or not.
138
:what we want to do is we want to
trust that we need to spend at least
139
:half, at least 50%, ideally 60 percent
of our daily efforts doing the hard
140
:work of looking for new users.
141
:To try to build awareness and bring
them into the site and then less than
142
:50 percent ideally 40 percent Nurturing
those users and bringing them back.
143
:Okay, so we have to look at the account
holistically because some campaigns
144
:are better at tracking than others.
145
:And we can't rely on this particular
column on a per campaign basis to
146
:tell us what's most profitable.
147
:Sometimes, oftentimes you shut off these
campaigns that aren't good at tracking
148
:and suddenly the other campaigns take.
149
:It happens all the time.
150
:In fact, sometimes with clients, we do
what they ask because we try to explain
151
:it to them and they don't understand.
152
:So we turn it off and prove with
data that it brought down the
153
:return for the overall business.
154
:And then they say, yep, go
ahead and turn it back up.
155
:All right.
156
:I want to talk about some
exceptions to the 60 40 rule.
157
:For example, an exception might be A
financial planning business, right?
158
:So financial planner has
a very long sales cycle.
159
:Somebody might take months before
they decide to hire this person.
160
:And there's a lot of
competition out there too.
161
:And you're selling yourself, right?
162
:You have to build trust before
this person's ready to hire you.
163
:Maybe you've even talked to them
and they're still not ready.
164
:So there's still kind of in your pool.
165
:You're still advertising
to them for months.
166
:This would be an example of
a business where we wouldn't
167
:mind spending more than 40%.
168
:On warm traffic, just a little bit
more, maybe we might skew it towards
169
:remarketing because it's such a long
sales cycle that we have to make sure
170
:we're investing properly into converting
the leads that we did find, because
171
:each lead is so expensive and they
take so many touch points before they
172
:convert that remarketing is really
important for that particular business.
173
:So we make sure to try to max
out as much of the warm traffic
174
:campaigns as we can, and we might do
50%, 50 percent for example Other
175
:exceptions are like, let's say we
have a brand new Google ads account.
176
:It doesn't have any history.
177
:Well, first of all, it's probably not
going to run remarketing yet because
178
:it takes Google well, Google has to
build a list of like recognized users,
179
:I think about a thousand people.
180
:And so depending on what your ad spend
is, when you first get started, that
181
:could take a month or two or three,
also depending on your cost per click.
182
:sometimes there is no
remarketing in the beginning.
183
:\ we'll take that money and
we'll just put it into cold.
184
:outreach efforts.
185
:oftentimes that's hard because for
the first month or two or three
186
:with brand new clients, they expect
wild returns right out the gate.
187
:And sometimes there's this.
188
:Uphill battle in the beginning with
Google ads where you have to build
189
:that remarketing list, you have to do
lots of cold prospecting, you have to
190
:nurture these people and you have to
start to get recognition for your brand.
191
:And so the first few months is
less profitable than it will be.
192
:We will oftentimes in those
cases build the campaigns, but
193
:we won't give them any budget.
194
:We'll give them like a dollar.
195
:And then when they start to spend,
we'll allocate a few more dollars
196
:from other campaigns into those.
197
:And make sure, by the way, while
we're on the subject, that you're
198
:not overspending on remarketing.
199
:We use these columns over here,
average impression frequency per
200
:user, to decide how how much to spend.
201
:For example, this video
remarketing campaign on the
202
:top is, is doing pretty well.
203
:I think it's spending, showing
videos about seven times
204
:for every user every month.
205
:seven times here.
206
:I think this one needs to be slowed down.
207
:I think just seeing the video 33 32
times in a month is just too many times
208
:and we might as well save a dollar or
two by taking it away from this campaign
209
:and moving it to other campaigns.
210
:fine tune it over time to make sure
we're not overspending because we don't
211
:want to just exhaust the audience.
212
:Do keep in mind there's multiple
videos inside of each campaign.
213
:So it's not like they're
seeing the same video 32 times.
214
:It's rotating through those videos.
215
:And and we try to add videos as
often as our clients give us videos.
216
:anD one way that you can try to help
prevent overspending on video remarketing
217
:campaigns is we always add a cap, right?
218
:Frequency capping here in the
settings limited to right now, three
219
:impressions and one view per day.
220
:A view is when somebody watches.
221
:beyond the skip ads button.
222
:So we try to cap it.
223
:We might need to just either
lower this cab or just move
224
:money away from that campaign.
225
:Either one would work.
226
:We might do some of both.
227
:Another example of an exception
to this rule would be brand.
228
:So again, if you're a brand new
brand, maybe you're really small,
229
:maybe you're just starting out.
230
:There might not be very much
brand traffic searching for you.
231
:So you might decide to hold off on brand.
232
:Like if your budget is very limited in the
beginning and There's not a significant
233
:body of people that are searching for you.
234
:Don't bother with brand because
You want to have enough data in
235
:each campaign too, so that the
algorithm can start to gain patterns.
236
:If you're not getting like a couple of
conversions a week or, at least like five
237
:or six conversions a month at a minimum.
238
:it's probably better just to not
bother setting up a brand campaign
239
:and put your money into Hold
outreach until you have that body
240
:of people that are looking for you.
241
:And you can see if you pull
up these columns, search
242
:impression share and click share.
243
:This is a pretty good gauge for
the brand campaign to, to figure
244
:out how big the market size is.
245
:You can also go into the
keyword planner tool, which is
246
:up here in tools and settings.
247
:You can type in your brand name and
Google will try to estimate how many
248
:people there are out there that are
searching for your brand name every month.
249
:But here you can see And this is the
other of the exception to our 60 40
250
:rule is when you have so much brand
that you could max it out at 100%.
251
:But we never recommend that.
252
:In fact, we try to not go over 80%.
253
:I think this one's a little
bit too high here, right?
254
:80%.
255
:Some people push it to 90.
256
:It's just that it
becomes very inefficient.
257
:Meaning that last 10 or 20 percent of
the clicks that you could be getting
258
:if you put more money into brand.
259
:It doesn't go as far and you might as
well spend that money on cold outreach,
260
:some exceptions where we like, where
we'd go, ah, brand is maxed out.
261
:Let's not put more money into that warm.
262
:Traffic area.
263
:We don't really need to.
264
:It's not gonna be as efficient as just
using that money for cold prospecting.
265
:I don't use these columns much
for the inbound search because
266
:it really confuses me how it can
have 12 percent of the search.
267
:The total available search
impression share being used up.
268
:And yet 80 percent of the
total available click share.
269
:Google needs to explain that one.
270
:I was trying to figure it out before
I hit record and I think that, it
271
:might mean that the click through rate
is much higher than the competition
272
:because it sounds like we're not
maxing out the search impression
273
:share, the total available search
impression share for these keywords.
274
:We're not even close.
275
:so we have low impressions.
276
:But we have high clicks compared
to the total click share.
277
:I think that means we're really efficient
with the impressions that we do get.
278
:that's my theory.
279
:I'm going to go with that.
280
:Anyways, I just use these columns mostly
to figure out how much we're maxing out on
281
:the brand because this is a pretty closed.
282
:Target audience, this is
a pretty specific keyword.
283
:There's just one or two keywords
in these campaigns, whereas inbound
284
:search is all over the place.
285
:This gets very complicated to
decide who's being targeted.
286
:What even is the total available
impression share on 50 keywords
287
:that are all, you know,
broad match or phrase match.
288
:So that's why I don't use those
columns for this campaign.
289
:These types of campaigns.
290
:Okay.
291
:Well, those are my thoughts
around budget allocation.
292
:I hope the 60 40 rule provides sort of
a, at least a starting place for you
293
:guys when you're trying to decide whether
to keep that cold, standard shopping
294
:campaign that doesn't look like it's
doing much, or whether to turn it off.
295
:Just keep in mind, if you turn off
that campaign, make sure you're,
296
:keeping a very close eye on the other
campaigns to see if they suffer.
297
:You might be better off just finagling
the budgets on that campaign rather
298
:than shutting it off completely.
299
:And try to decide how much money is...
300
:Efficient to allocate towards
those cold traffic campaigns.
301
:And we do find that 60, 40
on an overall account is.
302
:Is where it's at, and these are big
numbers because it's czar, but I think
303
:if we added them all up and divided
it by divided them between cold and
304
:warm, I think you would find the 60
allocation or at least something to it.
305
:All right, well, that's
all I've got for today.
306
:Thank you for watching.
307
:If you like this video, don't
forget to hit like and subscribe.
308
:See you guys later.
