Have you ever wondered what would happen if you significantly increased the daily budget of your Google Ads Performance Max campaign? At StubGroup, a top Premier Google Partner digital advertising agency, we recently conducted this daring experiment for one of our clients. In this blog post, we’ll take you through the details of the test, the challenges we encountered, and the surprising outcomes.
The Client’s Ambitious Goal
Our client, a holiday-oriented e-commerce company, approached us with a bold objective during Q4 of 2023. They wanted to scale rapidly, focusing on target cost per acquisition and emphasizing cash cost per client acquisition due to lifetime value considerations. Tasked with growing as fast as possible, we set out with a defined CPA target and the challenge to sell as many holiday-oriented products as possible.
Testing the Waters
Initially, we implemented various campaign types and saw some promising results, with orders falling within the target cost per acquisition. The client, however, was eager to scale aggressively. In early November, specifically from November 9th to 13th, we decided to conduct a test by significantly increasing the daily budget of our Performance Max campaign.
The Budget Boost
The client opted for a massive increase in the daily budget, despite our caution about potential challenges in Google’s algorithms adapting to such a drastic change. The goal was clear: understand the scaling potential and assess the impact on orders and volume. We documented the results day by day.
On November 9th, with a budget of $500, we spent $464.10, generating 30 conversions.
On November 10th, after increasing the budget to $5,000, spending soared to $4,699.22, resulting in 89 conversions. However, the cost per conversion also increased significantly from $15.46 to $51.66. Then on November 11th, Google spent $8,226, far exceeding the $5,000 budget, with the cost per conversion reaching $119.17.
Realizing the challenge, we scaled back the budget, spending only $626.06 on November 12th, and $822.19 on November 13th, gradually reducing costs.
Lessons Learned
The experiment demonstrated that while a budget boost could lead to increased conversions, the cost per conversion skyrocketed. We acknowledged the challenges with Google’s daily budget flexibility, where it can spend up to 200% of the allocated daily budget on any given day. Communicating this reality to the client became crucial.
Post-Experiment Adjustments
Following the test, we refined our approach, gradually increasing the daily budget but never reaching the levels of the initial experiment. The efficiency we sought was compromised during those high-budget days.
Conclusion
This experiment taught us valuable lessons about the delicate balance between scaling budgets and maintaining efficiency in Google Ads campaigns. As a rule of thumb, a more conservative and gradual approach to budget increases tends to yield better results. Scaling too quickly may lead to increased conversions, but at a potentially unsustainable cost.
Seeking Expert Assistance
At StubGroup, we use our experience to help businesses navigate the complexities of digital advertising. If meeting your Google Ads goals is becoming challenging and you would like expert assistance, get in touch with us now.