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How Will Additional Budget Amounts Effect Metrics

Discussion in 'Google AdWords' started by adsguru1212, Sep 11, 2019.

  1. #1
    I am looking to provide an analysis on what an additional 1,000, 5,000, and 10,000 spend will have as an effect on my account and am stumped on how to calculate it all together. I pulled the last 4 months of data, set up in an excel sheet, and have added additional columns for Available Impressions, Incremental Impressions, Incremental Clicks, Incremental Cost, and Incremental Conversions.

    For example, the current account budget I am working with every month is $22,780. I want to know how metrics/performance would look if we spent $22,780, $26,780, and then $31,780 (increments of 1,000, 5,000, and 10,000) based on historical data I have from the last 4 months. I am using the following formulas currently:

    Incremental Impressions =Available Impressions * Lost IS (budget)
    Incremental Clicks =Incremental Impressions *Stable CTR
    Incremental Cost = Incremental Clicks*Stable CPC
    Incremental Conversions = Incremental Clicks *Stable Conversion Rate

    Is anyone able to help me and explain how I would determine incremental conversions, impressions, clicks, IS, etc? I am not even sure if we can calculate some of this. I know these would be total estimates but any insight into this would be extremely helpful! Thank you!

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    adsguru1212, Sep 11, 2019 IP
  2. Lucid Web Marketing

    Lucid Web Marketing Well-Known Member

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    I'm assuming here only a search campaign.

    Start with your impression share. If it's in the high 90s, a higher budget will do nothing because you are already maxing available impressions and there are no more to be gained.

    A higher budget however would allow you to increase bids (but I recommend doing so only if your QS is 7+) so that you can get higher positioning. Higher position will get you a higher relative CTR which is the point of advertising.

    So assuming you don't change anything (ads, bids, etc), you have the right idea with your formulas. If for example your IS lost due to budget is 20%, increasing the budget by that much should get you most of those lost impressions. Increasing it more will get you nothing extra as explained above. If you don't increase your bids or ads, you can use your current CTR to calculate how many more clicks, same for your cost. Ditto for conversions but that I find is typically less "stable", in particular in different positions.

    As you said, it would all be estimates. I say to set your budget to target 100% of impressions and then some. That's how you are going to maximize profits. If 100 additional clicks get you 5 more sales, that's more profit to you even if CPC or CPA goes up a bit so don't focus on those too much.
    Lucid Web Marketing, Oct 3, 2019 IP