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Lesson 4, Topic 16
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Bidding/Budget (PPC) 4

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To run your ads on Google, you’ll need to decide on the right budget and bidding options. Your budget establishes a charging limit for an individual campaign, so it should be the average amount you’d be comfortable spending per day. Your actual costs may be lower, depending on how you manage your bids.

Note:  Google Ads calculates the budget on a daily basis. If you need to determine the monthly budget, multiply the daily budget by 30.4, which is the average number of days in a month. For more information, read Budgets overview. Utilize your Budget Report to view your monthly spend limit and monthly forecast.

Your maximum cost-per-click bid (max. CPC bid) is the most you’re willing to pay for a click on your ad. By managing your bids, you may influence the amount of traffic your ads receive, as well as the Return on investment (ROI) they generate. With higher bids, your campaign is likely to receive more traffic, although you’ll likely spend more money. With lower bids, your campaign is likely to receive fewer clicks and conversions.

How campaign budgets work

With Google Ads, you have the option to set an average daily budget or a shared budget for a campaign. You can set an average daily budget with the average amount you’re willing to spend per day in that campaign. If you want to check your average daily budget across all campaigns, you can use the “Budget” column under the Campaigns tab. If you prefer thinking of your budget in monthly terms rather than in daily terms, you can calculate your monthly budget by multiplying your average daily budget by 30.4 (the average number of days per month).

Tip: Start small

If you’re a beginner, try an average daily budget of US$10 to US$50. Check your account daily after applying a new budget to see how your campaigns have performed.

You can set a shared budget with the amount you’re willing to spend across multiple campaigns for the same client. The following example shows how Google Ads optimizes your campaign performance when you use a shared budget. 


Say you’ve set aside $100 per day, split evenly between two campaigns. On a given day, one campaign could get fewer impressions and clicks than usual, resulting in only $40 spent. With a shared budget, Google Ads could take that leftover $10 and reallocate it to the second campaign to maximize your campaign results overall.

Shared budgets are effective when you have a number of campaigns with a shared goal for a client. For example, you can set a shared budget when you have seasonal campaigns that take advantage of specific holidays, like New Year’s Eve or Valentine’s Day, and set a client-specific shared budget to cap spend related to all their seasonal campaigns.

You can access shared budgets in the Shared library in your Google Ads account.


Because traffic fluctuates from day to day, Google may allow your campaign to spend more in one day than your average daily budget specifies. This is called overdelivery.

However, your campaign spend will never exceed 2 times your average daily budget on a given day, and our system makes sure that in a given billing period, you’re never charged more than 30.4 multiplied by your average daily budget amount. For example, if you budget US$10 per day, the maximum you would pay is US$304.

If Google shows your ads too often and your costs for the month end up exceeding what you should have paid in a month given the average daily budget you’ve set, your charges will still not exceed your monthly charging limit. For instance, if your monthly charging limit is US$304, and you’ve accrued US$310 in costs in a given billing period, you’ll only be charged US$304. You can see these adjustments on your Transaction history page.

Are your campaigns using up all of your budget? Your budget settings include the option to View recommended budget, which is based on analysis of your campaign performance, typically from the past 15 days.

How bidding works

When many people think of an auction, they often think of a prize being sold for the highest bid. But our ad auction uses both quality and bid to determine your ad’s position. So even if your competition bids higher than you, you can still win a higher position—at a lower price—with highly relevant keywords and ads. You’ll often pay less than your maximum bid because you’ll only pay what’s minimally required to hold your ad position and any ad formats shown with your ad, such as sitelinks. The amount you pay is called your actual CPC.

There are many different ways to set your bids, including an entire suite of automated bid strategies. But most people start out setting their bids with either Maximize Clicks or Manual CPC bidding.

Maximize Clicks vs. Manual CPC bidding

If your goal is to gain clicks to generate traffic to your website, there are two cost-per-click bid strategies to consider:

  • Maximize Clicks is the simplest automated bid strategy. All you have to do is set an average daily budget, and the Google Ads system automatically manages your bids to bring you the most clicks possible within your budget.
  • Manual CPC bidding lets you manage your maximum CPC bids yourself. You can set different bids for each ad group in your campaign, or for individual keywords or placements. If you’ve found that certain keywords or placements are more profitable, you can use manual bidding to allocate more of your advertising budget to those keywords or placements.

Tip: Estimate keyword traffic

Try Keyword Planner to get traffic estimates, like estimated clicks, estimated impressions, or estimated average CPCs for your keywords. These estimates can help guide your decision on which bids and budgets to set.

Key performance metrics

To create a video ad, your video content must be hosted on YouTube. This means views of your video ads will increase your video’s view counts on YouTube (on the video’s Watch page and within your Google account reporting).

Some key metrics for your video campaigns include:

  • Core performance:
    • Engaged-views cater to video viewing and the behavior users exhibit when watching videos. Engaged-view conversions are counted when a user doesn’t click on your video ad but watches at least 10 seconds of the skippable ad (skippable after 5 seconds) and then converts within the Engaged-view conversion window.
    • Views show you the number of times people watched or engaged with your video ad.
    • View rate shows you the number of views or engagements your video ad receives divided by the number of times your ad is shown (video and thumbnail impressions).
    • Avg. CPV is the average amount you pay when a viewer watches 30 seconds of your video or the complete video if it’s shorter than 30 seconds or engages with your video, whichever comes first. Note that your average CPV may not be the same as your maximum CPV. Your maximum CPV is the most you’re willing to pay for an ad view.
    • Watch time measures the total amount of time people watched your video ads, shown in seconds.
    • Avg. watch time / impr. measures the average number of seconds someone watched your video ad per impression of the ad.
  • Notes:
    • Views and metrics derived from views aren’t populated for non-skippable video ads.
    • For TrueView in-stream ads running on YouTube, paid advertising views will be counted as public views on the video when one of the following happens: someone watches a complete ad that’s 11 to 30 seconds long, someone watches at least 30 seconds of an ad that’s longer than 30 seconds, or someone interacts with the ad.
    • For in-feed video ads running on YouTube, paid advertising views will be counted as public views on the video when someone clicks the ad and the video starts to play.
  • Click performance:
    • Clicks show you the number of times people clicked on your video. Clicks can help you understand how well your ad is appealing to people who view it.
    • Clickthrough rate (CTR) is the number of clicks that your ad receives divided by the number of times your ad is shown.
  • Engagement performance:
    • Engagements show you the number of times users have watched your video ad for at least 10 seconds, or the complete video ad if it is shorter than 10 seconds.
    • Engagement rate is the number of engagements that your ad receives divided by the number of times your ad is shown.
  • Reach and frequency:
    • Unique users shows the total number of people who saw an ad over a given time period.
    • Unique cookies is the number of cookies (which store preferences and other information that’s used on webpages that they visit) specific to an individual browser on people’s computers.
    • Unique viewers (cookies) is the number of times your video ad was viewed by a unique cookie over a given time period.
    • Avg. impr. freq./user is the average number of times a unique person is shown your ad over a given time period.
    • Avg. impr. freq./cookie is the average number of times your video ad is shown to a unique cookie over a given time period.
    • Avg. view freq./cookie is the average number of times that a unique cookie viewed your video over a given time period.
  • Video viewership (also known as “quartile reporting”)
    • Video played to: 25% shows how often a video is played to 25% of its length.
    • Video played to: 50% shows how often a video is played until the middle of its view length.
    • Video played to: 75% shows how often a video is played to 75% of its length.
    • Video played to: 100% shows how often a video is played to its completion.

Bid adjustments

You can set bid adjustments that increase or decrease your bids when your ad is competing to appear on mobile devices, in specific locations, and at particular days and times. Bid adjustments can give you more control over when and where your ad appears, and are applied on top of your existing bids. You can also customize your bid strategy by setting multiple adjustments that work together, such as location and time of day, or time of day and mobile devices.


  1. Sign in to your Google Ads account.
  2. Click Campaigns in the page menu.
  3. Click the plus button +, then select New campaign. 
  4. Select the campaign type you’d like to create.
  5. (Optional) Set a campaign goal, and enter the URL of your business’s website.  
  6. On the “Select campaign settings” page scroll to the “Bidding” section and select a bid strategy.
  7. Scroll to the “Daily budget” section and enter an individual daily budget or use a shared budget.
  8. Finish choosing your other campaign settings and click Save and continue.