Insights From Microsoft Ads Partners: Copilot And PMax via @sejournal, @LisaRocksSEM

Microsoft released several updates on Copilot and ads in October this year.

Following that, at the recent Microsoft Advertising Partner Pulse meeting*, Microsoft dove deeper into the updates, including results of research, enhanced Copilot ad integration, and optimization best practices for Performance Max campaigns, among others.

These updates mark more steps forward in Microsoft’s effort to refine the AI search experience and integrate the ad platform into conversational search.

They provide businesses with a way to stay ahead in AI technology advancements while effectively managing their Microsoft Ads.

Consumer Perception Of AI Search Results

The updated Microsoft Copilot clearly separates organic content from sponsored ads.

Ads are now integrated into entire conversations during a session, rather than just appearing after the last prompt, aligning with their simplified design.

As Copilot enters its first year, Microsoft has taken a closer look at consumer perceptions of AI-driven conversational search, often referred to as “chat.”

Its latest study reveals a growing trust in chat platforms for search, offering insights into how this technology reshapes user behavior and expectations.

The research focused on U.S. consumers who have experience with a conversational search platform. It found that users view chat as both complementary and, in some cases, superior to traditional search.

Users particularly value the speed and relevance of chat results, finding the results easier to understand compared to sifting through traditional search results.

Key findings:

• Trust in Generative AI: 38% of U.S. consumers report being “very trusting” of results from generative AI, while 50% of current Copilot users describe their trust level as “very trusting” or “completely trusting.”
• High Engagement Levels: Among Copilot users, 50% engage with the platform multiple times per week, and 16% use it daily. This indicates that many users have moved beyond experimentation and integrated Copilot into their daily routines.
• Accuracy Levels: 77% of users believe that chat and traditional search are equally accurate, with 38% finding chat results more precise for their needs.

Microsoft believes this shift marks a fundamental change in how people interact with search technology.

As traditional keyword-based search gives way to conversational queries, users like the more detailed and relevant results.

Consumer Perception Of Ads In Chats

Consumers are becoming more comfortable seeing ads in their chat experiences because the ads feel relevant and personalized.

According to Microsoft, the data shows:

• Ad Recall: 38% of users recall seeing ads during their chat sessions.
• Positive Sentiment: Of those who remember seeing ads, 75% reported that the ads had no negative impact on their experience. In fact, 42% noted that the ads improved their experience, enhancing their journey by providing useful and relevant information.

Why This Works

The success of ads in chats lies in their alignment with user intent. Chat users perceive these ads as being relevant to their searches.

This hyper-relevant targeting allows ads to blend seamlessly into the chat experience, earning trust and confidence in the results.

The Opportunity For Advertisers

As chat usage grows, so do the opportunities for brands to connect with consumers.

The research shows that a third of chat users already use these platforms to research products or brands they want to purchase. They also use chat beyond just researching products and brands.

Consumers are turning to chat platforms for a variety of tasks, including:

• Finding recipes and meal ideas.
• Planning trips and finding travel deals (17%).
• Searching for gift ideas (19%).
• Learning about health conditions.

The variety of use cases presents new opportunities for advertisers to connect with consumers at different stages of their decision-making journeys.

Because the ads are served based on sessions rather than individual queries, they can be more timely and relevant.

PMax Is The Best Performing Ad Format In Copilot

Looking at ad opportunities in Copilot, Microsoft’s data shows that Performance Max (PMax) is the top-performing format.

Ads within Copilot outperform traditional search ads in click-through rates (CTR).

Another critical metric is the rate of “quick click backs,” where users click an ad but quickly return because the landing page content didn’t meet their needs.

Microsoft found that Copilot ads result in fewer quick click backs than traditional search ads.

These performance benefits are attributed to the previously mentioned deeper engagement and conversational context in Copilot.

Why Performance Max Stands Out

According to Microsoft, Performance Max campaigns consistently outperform their other ad formats:

• Responsive Search Ads (RSA): PMax delivers higher engagement compared to standard responsive search ads.
• Shopping Campaigns: PMax shopping campaigns drive more conversions than traditional shopping campaigns.
• Multimedia Ads: PMax shows with fewer quick click backs and more engaged users.

Microsoft highlights that this higher level performance comes from PMax’s ability to analyze the context of conversations within Copilot, serving more relevant ads.

Best Practices For Optimizing For Copilot In Microsoft Ads

Microsoft Ads recommends three key best practices to help advertisers maximize the potential of Copilot in the Microsoft Ads platform:

• Use PMax for Maximum Coverage: PMax integrates assets and optimizes them across various formats, making it a good fit for reach, engagement, and conversions in Copilot.
• “Optimize Once, Benefit Twice”: There’s no need to create separate campaigns for Copilot because it is enabled in existing search campaigns. Instead, Microsoft takes your optimized search campaigns and finds opportunities to display them within the Copilot chat experience.
• Productivity with New Tools: To further improve campaign management and performance, Microsoft highlights the importance of using its latest tools, Performance Snapshot and Diagnostics, to get AI-powered insights and recommendations for the account.

The better the existing search campaigns are optimized, the better chance those ads will perform well in Copilot. Focusing on efficient search strategies now carries over to ads in Copilot.

Performance Max: Microsoft’s Best Practices For Setup And Optimization

Microsoft shared recommendations on how advertisers can get the most out of PMax, detailing deeper best practices for setup with key levers to drive better performance with advanced AI automation.

• Audience Signals: These signals are crucial for directing the AI toward high-value prospects. Use tools like remarketing, custom audiences, and customer match, which provide signals and guidance to the algorithm.
• Search Themes: These keyword-based signals provide important context to the AI, improving targeting accuracy and relevance.
• Brand Exclusion Lists (Pilot): This feature, currently in testing, lets you exclude branded queries where you don’t want your ads to appear. It’s also useful for strategic targeting, such as avoiding competitor terms or focusing on conquesting opportunities.

Other areas to optimize for success include:

• Budgets.
• Bid strategies.
• Goals and targets.
• Web exclusions.
• Assets.
• Product feeds.
• URL expansion.

Recommendations For Setting Up PMax Campaigns

To achieve the best results, Microsoft offered several actionable tips and outlined expectations for advertisers:

Time To First Impression

• Retail campaigns typically show results within three days.
• Non-retail campaigns may take up to four days.

Learning Period

• Allow two to four weeks for the AI to fully optimize.

This phase requires patience and depends on factors like:

• A conversion volume of 30+ in the past 30 days.
• Conversion cycle length.
• Industry type and seasonality.

Budget Recommendations

• Allocate 25-30% of your Google Ads budget to Microsoft Advertising.
• Provide two to three times the budget of historical standalone search campaigns for PMax to maximize effectiveness.

Best Practices

• Ensure adequate budgets to avoid constraints.
• Leverage audience signals and search themes for precise targeting.
• Use the bid landscape tool to make informed decisions on target bids.
• Strategically manage constraints like product or location focus during testing phases.

What’s Next For PMax

Microsoft continues to enhance PMax with new features on the horizon, including:

• Goals focused on acquiring new customers.
• Improved audience insight reports.
• Expanded support for video assets.

Summary

Microsoft’s recent updates to Copilot and ad integration reflect a strategic push to redefine the advertising landscape with AI-driven conversational search.

With rising consumer trust in generative AI and enhanced ad relevance within chat experiences, businesses have an opportunity to connect with their audience in more meaningful ways.

Microsoft stands firmly behind Performance Max campaigns and their new AI tools to deliver efficiency and engagement in the ad platform.

By exploring these advancements, advertisers have the potential to stay ahead in an evolving AI ads ecosystem.

*All the data and information above are taken from the Microsoft Advertising Partner Pulse meeting in November 2024.

More resources:

Featured Image: Prostock-studio/Shutterstock

Cross-Channel Remarketing Campaigns: A Complete Guide via @sejournal, @brookeosmundson

In a perfect world, consumers would purchase after just one interaction with a brand.

The reality is, we don’t live in a perfect world.

Unfortunately, many brands believe that building the perfect campaign structure, having the neatest set of keywords, and writing the most brilliant ad copy is all it takes to bring in sales.

Let’s face it: When was the last time you bought something after being introduced to a product for the first time?

With everyone having multiple devices, it’s no wonder our attention spans are shorter than ever.

We go from work on a big screen to going home and watching another big screen – all while scrolling that little screen in our hands!

This is where cross-channel remarketing comes into play.

Cross-channel remarketing helps you reconnect with users across different platforms, giving you more chances to engage them and boost your results.

Whether you’re an experienced PPC marketer or just starting out, this guide will break down everything you need to know to create effective cross-channel remarketing campaigns.

We’ll cover key strategies and tips to help you build and refine campaigns that work.

What Is Cross-Channel Remarketing?

Cross-channel remarketing is the practice of re-engaging users across multiple digital platforms after their initial interaction with your brand.

Instead of limiting follow-up ads to a single channel, cross-channel remarketing spreads your message across various platforms such as Google Ads, Facebook, Instagram, LinkedIn, and even programmatic display networks.

This strategy ensures that your brand remains top-of-mind for potential customers wherever they spend time online.

Why Does Cross-Channel Remarketing Matter?

Customers don’t stick to one channel when browsing the web – and neither should your remarketing strategy.

Here are some compelling reasons why cross-channel remarketing is a must:

• Extended Reach and Engagement: By using multiple platforms, you can reach a broader audience and reinforce your brand message more effectively.
• Higher Conversion Rates: Remarketing users across different channels increases the likelihood of converting them, as they encounter your ads in various online environments.
• Improved Personalization: Each platform has unique targeting options that enable you to tailor your message to specific audience segments.
• Better Data Utilization: You can combine data from different channels to gain a comprehensive understanding of user behavior and campaign performance.
• Enhanced Brand Recall: The repetitive yet varied exposure across multiple platforms strengthens brand recall, making it more likely for users to choose your brand when they’re ready to convert.

Are Multi-Channel And Cross-Channel Remarketing The Same Thing?

While the two may be similar, it’s important to distinguish the difference between the two.

Multi-channel remarketing means you’re targeting audiences across different channels. For example, a campaign that targets both Google Display and YouTube channels.

While they’re targeting multiple channels, they work independently from each other, with no communication between them.

Cross-channel remarketing, on the other hand, is on a whole different level where the channels are connected. It allows you to track and record interactions and better facilitate the customer’s purchase journey.

How To Set Up Your Own Cross-Channel Remarketing Strategy

Creating a successful, holistic cross-channel remarketing strategy involves a carefully thought-out approach.

Consider the following steps when creating your brand’s remarketing strategy:

1. Define Your Goals

Start by clearly defining what you want to achieve. Are you looking to drive conversions, build brand awareness, or encourage user engagement?

Establishing your primary and secondary goals will help inform your creative and targeting strategy across each channel.

Pro tip: Align your goals with the marketing funnel. For instance, use upper-funnel channels like display networks for brand awareness, and mid-to-low funnel channels like search and social for conversions.

2. Choose Your Platforms Wisely

Not all channels are created equal. The platforms you select should align with your audience’s online habits and the nature of your offering. For instance:

• Google Ads: Great for search intent and display advertising.
• Facebook and Instagram: Perfect for visually engaging campaigns.
• LinkedIn: Ideal for B2B audiences.
• Programmatic Networks: Excellent for scale and dynamic creative capabilities.

Choosing your platforms by industry is just as important. Make sure to select platforms where you know your audience is and meet them where they’re at. A few examples include:

• Ecommerce: Google Display Network, Facebook, Instagram, TikTok, and programmatic platforms can showcase product images and shopping ads.
• B2B Services: LinkedIn, Google Search, and remarketing through industry-specific platforms (e.g., Capterra) can yield high engagement.
• Hospitality and Travel: Instagram Stories, Facebook video ads, and Pinterest can inspire users, while Google Search catches high-intent travelers.

3. Segment Your Audiences Accordingly

Audience segmentation is crucial for effective remarketing.

Create custom audience lists based on user behavior, such as site visitors, product viewers, or past customers.

Leveraging data from your CRM, website analytics, and ad platforms can help you segment audiences to tailor your messaging appropriately.

If you’re looking to advance your audience segmentation strategy, try these ideas:

• Time-based Segments: Target users who have visited your site within the last 7, 30, or 90 days.
• Interaction-based Segments: Retarget users who engaged with a specific feature, downloaded a resource, or viewed a video.
• Customer Value Segments: Differentiate between high-value and lower-value customers to allocate budget efficiently.

How To Integrate Your Creative Strategy

A successful cross-channel remarketing campaign requires a cohesive, creative strategy, which is why creative deserves its own section here.

If you’re not sure how to get started with your creative strategy, use these steps below as a guide.

1. Maintain Consistent Branding

Ensure your ads across channels align with your brand’s voice and aesthetic. This consistency helps build trust and recognition among users.

It will be easier for users to recognize your brand after repeated exposure throughout different channels.

Here are a few visual consistency tips for your creative:

• Use the same color palette, logo placement, and typography across channels.
• Maintain a similar tone of voice in ad copy, even if the wording varies based on platform character limits.

2. Adapt Creative For Each Platform

While consistency is key, each platform has unique ad formats and best practices.

For example:

• Google Display Ads: Use simple visuals and a clear call-to-action.
• Facebook and Instagram Ads: Leverage video and carousel formats for higher engagement.
• LinkedIn Sponsored Content: Focus on professional, insight-driven content.

This doesn’t mean you need to completely recreate the wheel (no pun intended) for each creative asset by platform!

By following the same set of branding and principles, you can easily adapt your creative to each individual channel with these simple tips:

• Static Images vs. Video: Use eye-catching images for static ads and short, engaging videos for platforms like Instagram and TikTok.
• Interactive Elements: Use carousels or polls on platforms like Instagram to increase user interaction.

3. Use Dynamic Ads

Dynamic ads automatically personalize ad content based on users’ past interactions.

This tactic can significantly improve performance, especially in ecommerce campaigns where product recommendations are key.

The two biggest benefits of dynamic ads are personalization and scalability.

With a personalized experience, users are more likely to engage with ads that display items they previously viewed or added to their cart.

Additionally, with dynamic ads, it’s easier to scale personalization without needing to create hundreds of unique ad creatives.

How To Track And Measure Success

Tracking cross-channel performance is essential to refine your strategies over time.

In order to monitor and measure your campaigns effectively, follow the steps below.

1. Implement Unified Tracking

Ensure you have comprehensive tracking mechanisms in place across all channels.

Using tools like Google Analytics, Tag Manager, and platform-specific pixels allows you to gather insights into user behavior and conversion paths.

A great unified tracking tool to implement is Google Tag Manager (GTM). If you’re running ads on multiple channels, it really simplifies the process of managing tags into one cohesive solution.

Additionally, there are cross-channel attribution software tools that help you gain better visibility on how each channel contributes to overall performance.

2. Leverage Multi-Touch Attribution Models

Single-touch attribution (e.g., last-click) often fails to capture the full picture of user engagement across channels.

Multi-touch attribution models, such as linear or time-decay, give credit to all touchpoints within the buyer journey.

By default, Google Analytics 4 (GA4) uses the data-driven attribution model. This model uses machine learning and historical data to give credit to each marketing touchpoint that leads to a conversion.

Other attribution models available include:

• Linear Model: Distributes equal credit to all touchpoints.
• Time-Decay Model: Gives more credit to touchpoints closer to conversion.
• Position-Based Model: Assigns 40% credit to the first and last interaction, with the remaining 20% distributed among the middle touchpoints.

Best Practices For Cross-Channel Remarketing

Optimizing your cross-channel campaigns is an ongoing process. It should not be seen as a “set and forget” strategy because there are so many underlying factors that contribute to stellar or poor performance.

Here are some best practices to get you started.

1. Set Appropriate Frequency Capping

Avoid overwhelming users by setting frequency caps to limit the number of times they see your ad within a specific timeframe.

In most platforms, impression capping is found in the campaign or ad group settings.

Additionally, some platforms offer more advanced frequency capping options by hour, day, or lifetime.

2. Align Your Messaging With The User Journey

Ensure your remarketing messages correspond to the user’s stage in the buyer journey.

A first-time site visitor might see an ad highlighting product benefits, while a cart abandoner could receive an ad with a discount code.

A very basic user journey messaging alignment example could be:

• Top-of-Funnel (TOFU): Showcase educational content or brand stories.
• Middle-of-Funnel (MOFU): Focus on product features, customer reviews, and case studies.
• Bottom-of-Funnel (BOFU): Include promotions, limited-time offers, or free trials.
• After Purchasing (Retention): Provide rewards for product reviews, refer-a-friend promotions, or affiliate messaging.

3. Monitor And Optimize Performance

Track key metrics such as click-through rate (CTR), conversion rate, and return on ad spend (ROAS).

Use A/B testing to find the best-performing creatives and make data-driven adjustments.

Some optimization tips include:

• Rotate Creatives Regularly: Swap out ad creatives every few weeks to avoid ad fatigue.
• Review Audience Overlap: Ensure that your audiences across platforms don’t overlap excessively, leading to inefficiencies.
• Analyze Competitor Strategies: Use third-party tools to review competitors’ cross-channel strategies and adjust yours accordingly.

Cross-Channel Challenges And How To Overcome Them

Cross-channel remarketing success doesn’t come without its hurdles.

A few common challenges (and solutions) to consider when embarking on your cross-channel strategy:

• Attribution Complexity: Determining which channel deserves credit for a conversion can be tricky. Use multi-touch attribution models to better understand how each channel contributes to user actions.
• Budget Management: Distributing budget effectively across channels can be challenging. Regularly review your budget allocation and adjust based on performance.
• Creative Fatigue: Users may grow tired of seeing the same ads repeatedly. Rotate creatives regularly to keep content fresh and engaging.

Cross-Channel Marketing Requires A Balance

Cross-channel remarketing is a powerful tool for engaging users and boosting your conversion rates.

By understanding your audience, diversifying your platforms, and optimizing your creative strategy, you can create a cohesive experience that guides potential customers from awareness to action.

Implement these practices to ensure your campaigns resonate with your audience and maximize ROI.

The reality is, cross-channel marketing requires a balance of strategy, testing, and monitoring.

Stay adaptable, keep an eye on what resonates with users, and be ready to refine your approach.

More resources:

Featured Image: Vitalii Vodolazskyi/Shuttestock

From Launch To Scale: PPC Budget Strategies For All Campaign Stages via @sejournal, @navahf

We tend to craft budgets based on major objectives and real-world business timing.

This makes sense, as our real-world priorities should influence where we put our marketing dollars and at what velocity.

However, many don’t take the ad platform mechanics into consideration when setting initial, growth, and lower priority budgets.

This can mean successful campaigns tank due to too much investment too quickly, or that previously successful campaigns don’t behave after a period of pausing.

We’re going to invest some time discussing:

• • The mechanics of budgets.
  • How much to invest at the beginning.

• How to scale campaigns without tanking them.
• How to preserve lower priority campaigns.

It’s important to note that this post will do its best to abstain from opinions on account strategy.

There are many paths to profit, and while I have strong data-backed feelings on which paths have a higher probability of success, the point of this post is just to look at budgets.

As such, I’ll be sticking with Google and Microsoft, though some of the points can apply to Meta, Amazon, and LinkedIn.

The Mechanics Of Budgets

Before we dive into the core topic, it’s important to establish a baseline of how budgets work.

Advertisers set daily, monthly, or lifetime of the campaign budgets. When you set a daily budget, Google and Microsoft will do their best to hit it as an average across 30.4 days.

For example, if you wanted to invest $2,500 per month in a campaign, you’d set a daily budget of $82.24.

While it’s possible for that budget to double (i.e., you could spend up to $164.48 in a given day) across the 30.4 days, it should still come up to $2,500.

If you want more control than that, you can use portfolio bidding strategies to include bid floors and bid caps.

Image from author, November 2024

Bid floors (minimums) ensure you’ll bid enough to enter the auction.

These can be helpful when you know your budget is a bit low for the campaign targets, and there’s a real risk of Google/Microsoft underbidding to conserve your budget.

Bid caps (maximums) are safeguards against wild spikes in the auction that force you to bid more than you’re prepared to invest with a single click.

These spikes often happen when you’re going after expensive ideas and/or you’ve set a lower ROAS goal.

If you’re interested in a more detailed outline of bidding, you can check out this post that goes into it in depth.

How Much To Invest At The Beginning

Now that we have our baseline established, let’s talk about beginning budgets.

There are two main considerations when establishing a starting budget:

• Is the account brand new, or are there existing campaigns that can give it a halo effect?
• Does this campaign represent a test or a core part of my account?

We can debate the ethics of this, but brand-new campaigns in new accounts almost always cost more than new campaigns in established accounts. This is because ad platforms need data, and if you’re starting from scratch, you won’t have:

• Account conversion thresholds.
• Meaningful Quality Scores on your campaigns.
• Established negative and placement exclusion lists.

I typically budget in at least 20% extra for all new campaigns in brand-new accounts for the first three to four weeks. This allows the campaigns to gradually build up their data and for me to eliminate waste.

Once the campaigns have begun bringing in conversions and they seem to be spending at an expected level, I’ll lower the budgets back down to the expected budget provided the following things are true:

• The impression share lost to budget is less than 5%.
• Stakeholders aren’t hungry for more volume and are happy with the current CPA/ROAS.

If the campaign is being launched in an existing account with at least 90 days of data and trustworthy conversions, I’ll set the budget based on the agreed-upon goals and value.

Before launching the campaign, it’s critical to have a conversation that includes the following information:

• How many leads/sales are we currently getting, and where can that number grow without any operational change?
• Will customers always be worth the same amount, or is the value dynamic?
• Are there drastically different conversion rates based on how a customer engages, or are they essentially the same?

These questions will ensure you budget enough to get enough clicks in your day to get enough valuable leads for your conversion rate to kick in.

They also will help you keep your products/services organized by margins and serviceability, which will help mitigate conflicting goals that hurt budget efficiency.

Finally, it is important to acknowledge that testing budgets, while lower than normal budgets, still need to meet certain thresholds.

If your budget can’t fit at least 10 clicks in the day, it is likely setting itself up for failure because a 10% conversion rate is really good for non-branded search, and budgeting for fewer than 10 clicks in your day is banking on a better than 10% conversion rate.

How To Scale Campaigns Without Tanking Them

Once a campaign has proven itself, you might be tasked with finding a way to scale it. More money all at once is rarely the answer.

While there are instances where campaigns are performing great and the only thing “wrong” is impression share lost to budget, in most cases, big budget increases will result in increased CPCs and flat conversion lift.

This is because the budget added to high impression share campaigns will just allow the bids to be more aggressive.

If your campaigns have impression share lost to budget (at least 15%), it can make sense to add 5-10% increases every other week till you hit impression share lost due to budget of 5%.

You just need to be careful about learning periods if you’re using smart bidding.

Learning periods take five days to clear, and there is a correlation between their chaos and how young the account is. Essentially, the newer the account, the more conservative you need to be.

Optmyzr data on PMax data when other campaigns are present or not. (Image from author, November 2024)

For campaigns with a more complete impression share, scale means looking at creating more demand or expanding into services/markets that didn’t make the budget cut before.

This could mean layering in Performance Max if you’re unsure how to build video and display campaigns. It could also mean new search or demand-gen campaigns. The core success measures you’re looking for are:

• Does your original search campaign start to lose impression share due to budget (i.e., there are more people searching now)?
• Are there new types of customers coming in (ways of searching, asking if your company can address them, etc.)?
• Are your original campaigns maintaining CPCs/CPAs while starting to pull in increases in leads?

How To Preserve Lower Priority Campaigns

It’s inevitable that business priorities will fluctuate, and campaigns might need to relinquish budget.

However, there are some really important mechanics to keep in mind when deciding what to do with a low-performing/priority campaign.

If there is a chance you will ever want to run with it again (i.e., you’re testing something that requires you to take its budget), lower the budget to a non-spending amount.

This is because pausing campaigns for longer than one to two days can result in risks to their ability to perform again.

While higher-spending campaigns have an easier time mitigating this risk due to the volume of data they accumulate, there’s still a risk they will take one to three months to recover.

By lowering the budget to a non-spending amount and excluding the data from that campaign in the bidding settings, you’ll be able to mitigate the risk.

Image from author, November 2024

If you’re a seasonal business, you can use the seasonality options to help ad platforms understand why you spike your spends to help them prepare for the big uptick.

Final Takeaways

Budgeting is more than just coming up with a number you want to spend per month.

Marketers need to balance the mechanics with business goals to succeed. This means factoring in ad platform algorithms, as well as inputting brand data.

If you know that you need results quickly, be pragmatic about which channels you invest your budget.

On the flip side, if conversion efficacy is the issue, you may need to opt for the slower budget ramp.

However you approach your budgeting, know that there are always ways to safeguard it and direct it through targets and exclusions.

More resources:

Featured Image: BongkarnGraphic/Shutterstock

PPC And Paid Media Budget Planning Tips for 2025 via @sejournal, @LisaRocksSEM

One of the most common questions in PPC management is how to determine the “right” budget and investment for campaigns.

As a business leader investing in paid media, your PPC budget isn’t just about how much you spend. It’s about how strategically you use those resources to grow your business.

For small to medium-sized businesses (SMBs) investing between $2,000 and $50,000 monthly, every dollar has to count.

In this guide, we’ll explore how to allocate your budget effectively across platforms, invest in paid media wisely, and adjust based on performance to achieve your marketing goals.

Determine The “Right” Budget

Each PPC advertising platform has its own sweet spot.

Google Ads can reach the widest audience, while LinkedIn works best for B2B companies, and Microsoft Ads can be more cost-effective for certain industries.

Knowing which platform works best for your business type helps you make smarter budget decisions.

Start small and grow smart by beginning with a lower budget to test what works, then increase spending on the platforms that bring you the best results.

As your business grows, you can invest more in the campaigns that are proven to work for you.

What Affects Your PPC Budget?

Industry Competition

Some industries naturally need bigger budgets.

For example, if you’re in legal, insurance, or real estate, you’ll typically need to spend more because the cost for each click (CPC) is higher due to strong competition.

Location And Reach

Are you targeting local customers or reaching across the country? Local businesses often can work with smaller budgets than those trying to reach national or international audiences.

Business Goals

What are you trying to achieve? If you’re generating leads or running an online store, you might need to spend more to test different platforms and drive sales. This is different from businesses just looking to build awareness.

Performance Goals Considerations

Before diving into specific budget allocations, it’s important to understand how we’ll measure success.

Two key metrics that can help us determine if our PPC spend is effective: return on ad spend (ROAS) and cost per acquisition (CPA). Both are a straightforward way to connect your ad budget with your profits.

ROAS is the ratio of the revenue generated by your ads to the amount you spent on those ads. It tells you how much revenue you’re generating for each dollar spent.

To ensure profitability, calculate your break-even ROAS and set a higher target ROAS to reach your profit goals.

CPA is the amount spent on ads to acquire a customer or lead. It helps you understand how much it costs to acquire each customer.

To ensure profitability, make sure your CPA stays below the revenue you generate from each sale.

How To Use ROAS To Set Your Budget

Using ROAS can help optimize your campaign budget to drive higher revenue, not just lower acquisition costs.

For example, if you spend $1,000 on ads and generate $5,000 in revenue, your ROAS is 5 (or 500%), meaning you’re making $5 for every $1 spent, indicating a highly effective campaign.

As a starting point, many businesses aim for an ROAS of 2 (or 200%), which means generating $2 in revenue for every $1 spent.

This typically covers both the Cost of Goods Sold (COGS) and the ad spend, allowing you to break even. Starting at ROAS of 2 gives you room to test, gather data, and optimize.

Once you’ve gathered enough data, you can raise your ROAS target to 3 (or 300%), meaning you’re generating $3 in revenue for every $1 spent. At this point, your campaign should be profitable.

Most of the ad platforms allow you to set ROAS goals to help optimize your campaign. Choose the “Target ROAS” bidding strategy, which automatically adjusts bids to reach your goal ROAS.

Screenshot by author, October 2024

Avoid this mistake: Many advertisers rush to set aggressive profitability goals without enough data. The ad platforms will need time to optimize effectively.

For example, Google Ads recommends having at least 15 conversions within 30 days before setting a specific ROAS target.

How To Use CPA To Set Your Budget

Setting your budget based on your target CPA allows you to focus on controlling acquisition costs while still driving growth.

To calculate your budget using CPA, start by determining your target CPA and how many sales or leads you want to generate.

For example, if your CPA goal is $50 and you want 100 sales, you simply multiply the two to arrive at $5,000.

This means, you’ll need to spend $5,000 to acquire 100 customers at your target CPA of $50.

Starting with a reasonable CPA goal helps you control costs while gathering data. As you run your campaigns, you can refine your target CPA based on actual performance and adjust your budget accordingly.

Lowering your CPA slowly over time will allow you to generate more sales with the same budget.

Avoid this mistake: Don’t set a CPA that’s too low right out of the gate. Platforms need time to optimize, and starting with an aggressive CPA goal may limit the reach and data they need to make adjustments.

A good starting point is to align your CPA with your break-even point, then work toward lowering it as you optimize your campaign.

Budget Allocation And Reallocation

Allocate Budget To Best-Performers

For budget allocation, prioritize the best-performing campaigns across platforms.

This means, more budget for campaigns that are driving the highest return, whether they focus on branding, product promotion, or competitive positioning.

Regularly analyze performance and optimize spend based on which campaign type or platform is delivering the best results.

For example, you might allocate more budget to product-focused campaigns if they’re driving conversions, while reducing spend on branding campaigns if you have high brand recognition.

Competitive campaigns may get additional budget during critical sales periods to stay ahead of rivals. The key is flexibility to move your budget to where it will have the most impact.

Tracking And Adjusting Your Spend

When managing your budget across multiple months, it’s important to track what was actually spent versus what was planned. This ensures you can adjust and optimize future spend.

An effective way to do this is by maintaining a monthly spreadsheet or account report in the ads platforms. This will help you reconcile your planned budget with your actual spend.

If you underspend in one month (which can happen due to platform fluctuations or pauses in campaigns), you can reallocate that unspent budget to the next month.

Even small monthly shortages can add up over time. For example, if you budget $10,000 for a month but only spend $9,800, that extra $200 can be added to the next month’s or next quarter’s budget.

Reallocate any unused budget to future months, focusing on high-performing campaigns, channels, or key sales periods. This ensures every dollar is used effectively.

This table provides a simple example of how you can track and adjust your PPC budget vs. actual spend on a monthly basis.

Use this as a starting point to inspire creativity in developing your own system for monitoring and optimizing budget allocation.

Table created by author, October 2024

Daily Budget Setting

In most platforms, budgets are set at the campaign level, meaning each campaign will only spend up to its designated cap per day. The total across all campaigns should align with your overall account budget.

Begin by determining your daily budget. For example, if your monthly budget is $2,000, your daily budget would be $66 per day across the entire account.

This daily budget will also affect how many campaigns you can run simultaneously, as the $66 will be distributed across all campaigns. This can be a challenge for SMBs with a small PPC budget.

Keep in mind that both Google Ads and Microsoft Ads may occasionally exceed the daily budget to maximize results, but your total monthly spend should not exceed the daily budget multiplied by the number of days in the month.

AI Features For Budget Management

AI and automation can help make budget management easier. Here are a few key features that can simplify the process:

• Smart Bidding: Automatically adjusts bids to maximize conversions or achieve a target return on ad spend.
• Budget Recommendations: Many ad platforms provide budget suggestions based on historical campaign performance and goals.
• Performance Max Campaign: Uses AI to optimize budget allocation across all of Google’s ad inventory (search, display, YouTube, etc.) to maximize conversions.
• Target CPA: Automatically adjusts bids to help get as many conversions as possible at your set budget and desired CPA.
• Target ROAS: Optimizes bids to get the most conversion value for your budget.

Looking To The Future Of PPC Budget Management

SMBs can expect to see some key developments in PPC budget management as the digital advertising landscape evolves. A few notable trends to keep an eye on:

Increased Automation And AI-Optimization

More advanced AI-powered tools will be released, enabling real-time adjustments to bids, budgets, and campaign strategies based on performance data. This will allow for greater agility and efficiency in budget management.

Focus On Lifetime Value (LTV)

Think about allocating budgets based on long-term profitability and customer retention, not just immediate acquisition costs. This will require sophisticated attribution modeling and AI tools.

Alignment With Broader Goals

PPC budget management is becoming more closely tied to overall marketing strategy and business objectives, driving greater cross-functional collaboration on budgets and spend.

By staying ahead of these emerging trends, SMBs can future-proof their PPC budget management. The flexibility and insights provided by these trends will be key to staying competitive.

Three Examples Of Budget Allocation For Paid Media Campaigns

These examples demonstrate how to allocate a paid media budget across various platforms, for example, industries, target audiences, and goals.

While these allocations provide a starting point, it’s important to remember that budget splits should be customized based on individual research, campaign needs, and past performance data.

The ratios suggested here are examples designed to illustrate how thoughtful planning can improve results.

Often, businesses split their budget evenly across platforms or prioritize a single platform like Google, then allocate a smaller amount to others.

Research and strategic planning based on platform reach, audience demographics, and campaign types available will ultimately drive the budget allocations.

Each scenario provides guidance that SMBs can easily apply to their own campaigns.

To maximize effectiveness, run a four- to six-week test, monitor performance, and adjust your budget allocation based on which platforms deliver the best.

1. B2B Product With $10,000 Per Month

For B2B companies, it’s important to prioritize platforms that effectively target professionals and decision-makers.

Here’s a recommended budget allocation for a $10,000 per month budget with platform rationale.

LinkedIn Ads: 40% ($4,000)

LinkedIn is the leading platform for B2B targeting, allowing precise targeting by job title, industry, and company.

Despite its higher cost per click, LinkedIn generates high-quality leads and builds thought leadership, making it essential for B2B campaigns.

Google Ads: 35% ($3,500)

Google Ads remains critical for capturing high-intent search traffic from B2B buyers actively seeking solutions.

This allocation focuses on search ads to ensure visibility for potential clients looking for specific products or services.

Microsoft Ads: 25% ($2,500)

Microsoft Ads offers a cost-effective way to target professionals, particularly through Bing.

It’s especially valuable due to its integration with LinkedIn data and less competitive ad space, which helps maximize ROI at a lower cost than Google.

2. Consumer Product (Auto, Recreational) With A $20,000 Budget

When marketing consumer products like cars or similar, visual platforms play a key role in storytelling and engaging potential buyers.

Here’s a budget split for a $20,000 monthly budget:

Google Ads: 40% ($8,000)

Google Ads is essential for capturing high-intent search traffic, especially from car buyers researching models and dealerships.

Both search and display ads ensure visibility throughout the buyer’s journey, from discovery to conversion.

YouTube Ads: 30% ($6,000)

YouTube’s video ads are ideal for showcasing cars through immersive content like test drives, feature highlights, and lifestyle storytelling.

This platform builds brand affinity by engaging consumers through compelling visuals.

Pinterest Ads: 15% ($3,000)

Pinterest excels at visual storytelling, making it perfect for engaging users during their discovery phase.

It helps inspire potential car buyers and captures users exploring future purchases, making it an effective top-of-funnel platform.

Microsoft Ads: 15% ($3,000)

Microsoft Ads offers a cost-effective way to reach an affluent, mature audience on Bing.

It complements Google Search by capturing additional leads at lower CPCs, particularly for big-ticket items like cars.

3. Ecommerce (Home Goods Retail) With A $30,000 Budget

For ecommerce businesses selling home goods type products, a balanced approach across search, social, and visual platforms ensures both discovery and conversion.

Here’s a suggested budget split to get started for a $30,000 monthly budget:

Google Ads: 35% ($10,500)

Google Ads is critical for capturing high-intent traffic through search and shopping ads.

Given a higher retail average order value, search ads target ready-to-buy consumers, while Google Shopping Ads showcase products with pricing and visuals, driving qualified traffic.

Meta Ads (Facebook & Instagram): 35% ($10,500)

Meta Ads are perfect for visually appealing home goods, using Facebook and Instagram’s dynamic ad formats to engage consumers.

Meta combines discovery, engagement, and direct conversions, reaching a broad but relevant audience of home decor enthusiasts.

Pinterest Ads: 15% ($4,500)

Pinterest is an ideal platform for home goods, where users often browse for home decor inspiration.

Pinterest Ads engage users at the discovery phase, driving top-of-funnel traffic with visually engaging content that inspires potential customers.

Microsoft Ads: 15% ($4,500)

Microsoft Ads complements Google with lower-cost clicks from Bing.

It helps target an affluent, purchase-ready audience and efficiently captures additional search-intent traffic, making it an excellent addition to your ecommerce marketing strategy.

Note: These suggested splits serve as examples to inspire a strategic approach to budget planning. These examples illustrate how to allocate your budget based on your target audience and campaign goals, ensuring that each dollar spent is driving results in the most thoughtful way.

Key Takeaways

• Allocate Budget To Top-Performing Campaigns: Regularly analyze performance across platforms to focus your budget on campaigns that deliver the best results.
• Reallocate Based On Actual Spend: Track your planned versus actual ad spending each month or quarter. Reallocate any unspent budget to the next month or high-performing campaigns to ensure efficient use of your resources.
• ROAS And CPA: Use ROAS to measure how effectively your ads are generating revenue. Use CPA to control customer acquisition costs and optimize budget for growth.
• Testing And Optimization: Begin with a four- t0 six-week test period to gather performance data and adjust your budget allocation based on which platforms and campaigns yield the best results.
• Use AI Tools: Leverage AI features such as Smart Bidding and automated strategies to help manage budgets without constant manual adjustments.

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Featured Image: Vitalii Vodolazskyi/Shutterstock

AI-Enhanced Keyword Selection In PPC via @sejournal, @brookeosmundson

Let’s be honest – PPC keyword research can be tedious.

Sifting through search terms, analyzing performance data, and trying to predict what people will type into the search bar next feels like an endless puzzle.

This is where AI can enter the game.

This isn’t just about adding another buzzword to your marketing toolbox – AI can actually save you time and give you insights you might miss on your own.

In this article, we’ll explore how AI can take the grunt work out of your keyword strategy.

Whether you’re hunting for new keywords, optimizing your existing campaigns, or cleaning up your negative keyword lists, AI offers real, actionable solutions.

Let’s break down exactly how you can use AI to level up your PPC keyword game without the headaches.

Why AI Matters For PPC Keyword Selection

Before we jump into how to use AI to enhance your keyword strategy, it’s worth understanding why AI is a game-changer for PPC.

AI tools can process vast amounts of data faster than any human ever could. They identify patterns, analyze search behavior, and even predict trends, giving you insights that are both actionable and timely.

Instead of spending hours combing through search terms, competitor ads, or campaign performance reports, AI does the heavy lifting, allowing you to focus on higher-level strategy.

More importantly, AI tools learn and adapt over time, becoming smarter with each data point they analyze.

That means your keyword research and selection process becomes not just automated, but also continually improving.

Using AI For New Keyword Research

One of the most significant ways AI can enhance your PPC strategy is by discovering new keywords.

Traditional keyword research relies on manual tools and processes, but AI tools like Google’s Keyword Planner, other third-party tools, and AI-powered tools like ChatGPT’s keyword analysis capabilities take it up a notch.

These tools don’t just spit out related search terms – they can provide context, trends, and relevance scores based on real-time data.

How AI Tools Find New Keywords

AI-powered keyword tools analyze search patterns across millions of queries, detecting emerging trends, consumer interests, and semantic relationships that would otherwise go unnoticed.

For example, if you’re managing an ad campaign for a fitness brand, AI might detect an uptick in searches for [home workout routines for busy moms] or [low-impact exercises for seniors].

Even more powerful is AI’s ability to consider user intent.

AI doesn’t just give you a list of keywords – it provides context, predicting whether a user is more likely searching for information, looking to buy, or wanting to compare products.

This helps you create campaigns that align closely with user intent, which is critical for achieving higher quality scores, leading to better ad placement.

Tools And Tactics For AI-Driven Keyword Discovery

• Google’s Keyword Planner (AI-driven recommendations): Google’s own AI-backed keyword tool not only suggests keywords but prioritizes them based on real-time search trends.
• ChatGPT or Jasper for idea generation: These tools can help brainstorm new keyword ideas based on competitor campaigns, product descriptions, or industry trends. Just input your product or service, and these AI systems will offer insights on relevant keywords, often from angles you hadn’t thought of.

Adding Keywords To Existing Campaigns

Once you’ve got a solid list of new keywords, it’s time to put them to work.

AI isn’t just great at discovering keywords – it’s also incredibly useful for helping you refine your existing campaigns.

This is especially important if your campaign has been running for a while and might need some fine-tuning.

AI For Keyword Expansion

AI can help you intelligently expand your keyword lists by finding closely related keywords, synonyms, and long-tail variations.

For example, if you’ve been running ads for a local bakery using keywords like “best bakery near me,” AI tools might suggest adding longer variations like “best custom birthday cakes in pittsburgh.”

These expanded keywords help you reach more specific audiences who are ready to convert.

Leveraging AI For Semantic Keywords

Semantic keyword matching is another area where AI shines.

Unlike traditional keyword match types, AI doesn’t rely strictly on exact keyword matches.

Instead, it understands the broader meaning behind search queries, enabling you to target more relevant searches.

Google’s AI algorithms, for instance, now consider the overall intent of a search query, offering a more nuanced keyword match than we had a few years ago.

This makes adding keywords to your campaign not just about volume but relevance and intent alignment.

Optimizing Existing Campaigns With AI Tools

• Google Ads Recommendations: Google’s built-in AI will continuously monitor your campaign and suggest keyword additions based on ongoing performance and search trends.
• AI-Powered Keyword Expansion in Optmyzr: Tools like Optmyzr integrate AI and machine learning to suggest keyword expansions and bid adjustments in real time.
• Microsoft Ads AI Integration: Microsoft’s platform offers AI-based keyword suggestions, making it easier to add or remove keywords from your existing campaigns, ensuring your ad stays relevant.

How AI Helps With Negative Keyword Selection

A successful PPC campaign isn’t just about the keywords you include – it’s also about the keywords you exclude.

This is where negative keywords come into play, and AI can help you refine your negative keyword strategy like a pro.

Common Mistakes With Negative Keywords (And How AI Can Help)

One of the most common mistakes PPC marketers make with negative keywords is not updating them regularly.

It’s easy to set a few negative keywords at the start of a campaign and then forget about them.

But search behaviors change, new trends emerge, and without adjusting your negative keyword list, you might start showing ads for irrelevant searches.

For example, a brand selling high-end outdoor gear might inadvertently show ads to people searching for [cheap camping supplies], which dilutes the brand image and wastes ad spend.

Another mistake is being too broad with negative keywords. While you want to exclude irrelevant searches, casting too wide of a net can accidentally block valuable traffic.

For instance, adding “free” as a negative keyword could prevent your ads from showing to users looking for “free delivery” or “free returns,” which are often associated with ready-to-buy customers.

This is where AI can step in and save the day.

AI tools can analyze search queries in real-time, identifying irrelevant traffic while being nuanced enough to avoid overly broad exclusions.

They allow you to add negative keywords that prevent wasted ad spend without cutting off relevant users.

AI can also spot trends in what kinds of queries lead to bounces or low engagement, helping you automatically refine your negative keyword list with precision, based on performance data.

Identifying Irrelevant Traffic With AI

AI excels at spotting patterns and trends that humans might miss.

By analyzing search terms that trigger your ads but don’t lead to conversions, AI can suggest negative keywords that will help you avoid wasted spend.

Let’s say you’re running a campaign for luxury watches, and your ads are being triggered by search terms related to “cheap watches” or “free watch giveaways.”

AI tools can analyze the performance of these search terms and suggest adding them as negative keywords.

AI can even analyze the context of negative keywords, understanding when a specific word or phrase is irrelevant in one campaign but useful in another.

This level of nuance helps ensure your ads aren’t being wasted on the wrong audience while still reaching relevant customers.

AI Tools For Managing Negative Keywords

• Google Ads Search Query Report (AI-Enhanced): Google Ads provides search query reports, and its AI-powered suggestions will flag irrelevant search terms for potential negative keyword additions.
• Custom AI Algorithms for Negative Keyword Mining: Some marketers are using AI tools like Python with machine learning libraries to automate the detection of irrelevant terms that are draining budgets.

Making AI Work For You: Practical Tips

While AI tools are incredibly powerful, the best results come from combining AI’s capabilities with human expertise.

Here are some practical tips for making AI-enhanced keyword selection work for you:

• Regularly Update Your Keyword Lists: AI tools provide real-time insights, but the digital landscape is always changing. Review and update your keyword lists at least once a month to stay ahead of emerging trends.
• Refine Your Negative Keywords Consistently: Just like with regular keywords, your negative keyword list needs to evolve. AI tools can help you keep this list up to date without much manual effort.
• Experiment with Different AI Tools: No single tool will give you everything you need. Experiment with different AI-powered platforms to find the ones that best fit your workflow.

In Summary: AI As Your PPC Keyword Sidekick

AI is not here to replace PPC marketers – it’s here to make us more efficient, more strategic, and ultimately, more successful.

By leveraging AI to enhance keyword research, optimize existing campaigns, and refine negative keyword strategies, you can free up time for more creative and strategic tasks.

The key to success is combining the power of AI with your own expertise and instincts.

After all, while AI can analyze data, it’s the human touch that ultimately connects with customers and drives results.

So, dive into AI-enhanced keyword selection and start reaping the benefits of smarter, more efficient PPC campaigns.

More resources: 

Featured Image: Sammby/Shutterstock