Are Shared Budgets an Advantage or Disadvantage?


When setting up Google Adword campaigns for the very first time, the option of using a Shared Budget is not always obvious. So more times than not, new campaigns are defaulted to use the manual Budget Entries when setting up your campaigns. As your Google Adwords account grows through time, the need for a Shared Budget may begin to become a necessity. Let’s use a couple of examples to list some of the advantages and disadvantages of running a Shared Budget in your campaigns.

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Advantatges of a Shared Budget

 

In our first example, let’s say that you would like to run 3 campaigns at the same time, and you want to stay within a two hundred dollar daily budget. In this example, an advantage would be set up a Shared Budget with a budget max of two hundred dollars, and have it assigned for the 3 campaigns of your choosing. This will allow all 3 campaigns to run and use the one Shared Budget until that budget runs out, so that you do not go over the two hundred dollar budget. This works well with smaller budgets or test budgets since you are dedicating multiple campaigns to only one budget (your max budget limit). A Shared Budget can keep your budget from getting out of control if one of those 3 campaigns begins to get lots of traffic.

Disadvantatges of a Shared Budget

 

Now let us take a look at how a Shared Budget might just be a disadvantage for your campaigns. For this example, let’s say you are running 3 brand new test campaigns and have set all of them up to use a Shared Budget. For test campaigns, the object is typically to gather enough data in order to determine which Adgroups or Keywords within that test might be worth spending more money on. Alternatively, it can be to determine which Adgroups or keywords will not be wise to use as they spend more money without performing.

 

In this example we will say that you have activated the test campaigns and have run them for a full 30 days. Within that 30 days, you have 100 clicks in campaign #1, 50 clicks in campaign#2, and 25 clicks in campaign #3. The conversion rate for campaign #1 is 10%, campaign #2 had 30% conversion rate, and campaign #3 had a 50% conversion rate.

 

The disadvantage of using a Shared Budget in this example is that by using the Shared Budget, you were actually holding back the highest converting campaign which was campaign #3. By only receiving 25 clicks for the 30 day duration of the test, campaign #3 was being held back because the other campaigns (campaign #1, and #2) were generating most of the clicks at a faster rate. Even though campaigns #1 and #2 also generated conversions at their own conversion rate, they took the lion’s share of the budget allowed per day.

 

Creating a Shared Budget

 

It is definitely up to the end user as to whether a Shared Budget would be an advantage or disadvantage. Shared budgets work very well for some Adwords users, while it may not work that well for others.

 

Now, we’ll briefly walk you through the set up process of creating a Shared Budget. Once you are logged into your Google Adwords account, you will have menu tabs on the top of the interface, and you will see some menu tabs on the left side of the interface. Shared Budget will be located in the Shared Library tab located at the bottom left hand side of the main interface page. Once inside the Shared Library, you will look for a category called Budgets and click on the “view” link just below.

 

Give your Shared Budget a quick name, then add the campaigns you want your Shared Budget to affect. Then you will need to choose how much budget on a per day basis you would like to use. You will also have to calculate the daily budget based on your monthly budget limits. After that, just click Save at the bottom of the page, and you are all set. Operate your campaigns as usual, and the designated campaigns will now be sharing the same budget, using the Shared Budget feature.

 

– Bobby Pena, PPC Manager