Google Adwords gives you a lot of freedom about how you wish to spend your pay-per-click advertising cash, and it is knowing these methods in and out that can allow you to squeeze a lot more bang for your buck out of a limited online advertising budget. The key is continual testing, measuring and adjusting.
With Google Adwords you can set limits on your budget in a number of ways. You can set a daily limit and a limit on the cost of individual clicks. Using these options can stop your advertising from running out of control, but it also needs to be done in a measured way. If your daily budget is low when compared to the cost of your keywords, then your advertisements will not appear every time there is a matching search, such that they will begin to appear more sporadically. This will affect the general throughput of visitors to your site through Adwords.

Tips on Managing Your Google AdWords Budget

Setting a maximum cost per click is another way for you to ensure you’re not going to end up paying above the dollar for clicks. Having such a maximum cost in place is piece of mind that you’re not going to wake up in the morning to find you’ve paid 7 dollars for a visitor to a page that could only feasibly make you 2 dollars.
Next, you should be using Google Analytics on your site so you can track conversions. This will allow you to see the percentage of people who go from visitors to purchasers. With this statistic in hand, adjusting the cost-per-click bid becomes the case of doing a simple sum to see at what point the campaign will become profitable in the long run.
There are two things that will affect where your ad will appear in the list: the amount you pay for it and your quality score. If your quality score is higher you can pay less for your advertisement and still appear in the same position.
Therefore it’s obvious that improving our quality score is a priority. We can do so by making our advertisements as relevant to our sites as possible, and dumping any of the keywords which are giving us a low conversion rate. The higher our conversions overall, the cheaper our advertising will be. Essentially, the better the advertisements you have on Google Adwords and the better your site is, the cheaper your Google Adwords ads will eventually become.
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