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Why NOT to spread out your ad impressions just to make your budget last the full day

I could never understand why Google offers its customers the ability to spread out their ad impressions (and hence their clicks) simply to make their budget last the whole day, in the case when an advertiser runs out of budget say, in 16 hours.

An advertiser can always do better simply by lowering their max CPC (and hence average CPC). Doing this will also make the budget last longer and is a superior way compared to having your ads impressions spread out.

To illustrate this, let’s say your daily budget is $10 and your max CPC is $1.25. Given this, let’s say you run out of budget in 16 hours, and get 10 clicks for an average CPC of $1 per click. If you decide to simply have your ads impressions spread out so that your budget now lasts the full 24 hours, but leave your max CPC at $1.25, in the general case, you will still get about 10 clicks at the same average cost per click of $1. (Note there may be variances here but in the general case, there is no reason to assume that your average cost per click will change).

Compare this to making your budget last by simply lowering your max CPC say from $1.25 to 95c. By doing this, clearly, your budget will last longer than the 16 hours, but in addition, (and here is the kicker): Your average CPC will fall, say to 67c and you will now have received about 15 clicks in the day for the same money compared to 10 clicks above.

(Note that this only works if you cannot or don’t want to increase your daily budget. Once you decide to increase your daily budget, you need to collect data before you can decide whether or not to lower your max CPC).

We get into much more detail on this topic in the free class that can be found on www.SearchEngineRules.com. We ask that you provide us your email address to view the video based class in its entirety. 

 

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