How to Trim (or Cut) an SEM Budget Effectively

How do you cut a paid search campaign to a smaller budget, yet make sure it's still able to perform at a high level? Good question. We've got your back.

Clients set budgets, sometimes far in advance. Monies are allocated for marketing channels and can be locked in for a full fiscal year. It then becomes the challenge of the agency (or internal Marketing Director) to use that money in the most efficient way possible. Though the year, priorities may change and dollars may be reallocated.

Think of it in a more personal way: what if your boss gave you one paycheck a year? You know it’s enough to last all year, but at the same time you’d be pretty focused on making sure it lasts, and less likely to throw it around needlessly to ensure you were covered at the end of the year.

It also becomes easy to imagine how priorities could change through a year. Some money you were going to spend on one thing, needs to adjust to another based on circumstance. Marketing budgets work this way.

How do you cut a paid search campaign to a smaller budget, yet make sure it’s still able to perform at a high level? Good question. We’ve got your back.

Have a Target Budget in Mind

Having a defined monthly budget is very important to how a paid search campaign is organized to deliver the best results. Depending on the size of the budget, a paid search campaign can be more expansive—including AdGroups for brand terms, or conquesting ads—or tightly focused on only a few products. Budget size is a big influence in this from the outset and what build philosophy is used. The monthly budget is an important piece of information that quickly clarifies a lot of priorities.

Likewise, having a defined budget number to cut down to serves the same purpose. Telling your agency the budget needs to be reduced is too vague. Do you want to lower your monthly SEM budget by 20% or 25%? Again, the budget number quickly clarifies priorities.

Knowing the availability of resources is critical to achieving the desired outcome.

Negative Keywords are your Friend

With paid search, there are two types of keywords that drive campaigns: primary and negative keywords. Marketers put an overwhelming amount of attention on primary keywords, which are the terms you want to trigger your text ads. Negative keywords inform a search engine the keywords you don’t want to your ads to show for. They are used to refine a keyword list so ads do not show for terms that might seem like good matches. For example, a car dealer does not want their ads to show when people are looking for the Pixar movie Cars.

A lot of money gets wasted by not having a tidy negative keyword list. This is one of the overlooked gems of paid search. In AdWords, go to any AdGroup, select the keywords tab, then select Search Terms. This will show you the actual keywords that triggered your ads.

See exactly what keywords triggered your text ads.

You may find terms that do not relate to your products or services, but Google still showed search ads do to algorithmic confusion over the term. Making sure you have a real tight, well-defined negative keyword list can reduce a budget by 15%.

Pause Specific AdGroups, Leaving others Untouched

It may be tempting to try to pare down keywords, taking a bit form here, a bit from there. The effect of that is diminished reach of every AdGroup. Another tactic is to just pause full AdGroups, while leaving other untouched. This is about priorities, friends. Make a decision what product categories or services lines can be supported by paid search and which ones you can leave behind for the time being. Pause ad groups that are not part of your core product line. It tightens your budget, but leaves your core product area running at full steam.

Don’t Cut Based on Keyword Price

It’s seems logical to run a keyword performance report, look at what keywords are costing the most money, then cut them. If you are not careful, you will cut the best performing keywords in your campaign. What you’ll have left is second-tier keywords doing a second-tier job. Here is how you resolve this: run a keyword performance report and look at which terms cost the most over the last 90-days, but also generated the fewest conversions. These are terms you can trim. But remember, high cost keywords are very valuable, if they generate a return. Conversions are customers that are taking action. Cherish the keywords the create results, no matter how high the average cost per click may be.

Pair SEM with SEO

We prefer the blending method of search, using both SEO and SEM to drive traffic. But sometimes people get really focused on SEM. Take the time to do an SEO site audit and review your SEO implementations. Some SEO changes might help you increase in rankings for keywords that you would no longer have to bid on.

You can get a free SEO site audit to help you begin to identify SEO issues on your site that you can fix. Tools like SEMRush, while not free, offer a detailed SEO reports for your site. $100 per month may sound like a lot, but the money it can save on the paid search side can well offset the cost.

Times are tight and sometimes budgets get cut. But hastily cutting an SEM budget can cause the remains of the campaign to falter. Any decent search agency can help you effectively reduce a campaign in a very effective way in a matter of a few days. But if you are running your own campaign, hopefully these tips will help you draw down a campaign in a thoughtful way.