"We've got some campaigns limited by budget, hopefully that's good news," I said.
Chris looked at me quizzically. Chris is a lawyer and a regular Google Ads coaching client of mine. I'd already taught him why we don't want our Google Ads campaigns to be limited by budget.
So Chris replied, "Before we move on, you right away said that it might be good that these campaigns are limited by budget. Why did you say that?"
Why did I say that?
Chris' goal was to get more leads from Google Ads. In working together, we had restructured the account to have Exact Match rather than Broad Match keywords, intent-aligned ad groups, and we were using Target CPA bidding.
The reason I said that the red "Limited by budget" warning might be good news is because Google Ads will usually give you that warning when:
- you're at or near your CPA/ROAS goal
- you've lost impression share due to budget
We were at the start of the call when I made this comment, so before even looking at the Cost / conv. or Search impr. share columns, I guessed "We must be doing pretty well if the campaign is telling you it's limited by budget," meaning there's more opportunity to be had here. Was I right?
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Sure enough, he was hitting his CPA goals and there was plenty more impression share to be had! So, Chris had it easy. All he had to do was increase the budget, and then he could achieve his goal of getting even more leads for his law practice at the current cost per lead.
This is in contrast to some other lawyers I've coached recently (I have quite a few lawyers in my Google Ads coaching practice!) who already have 60-80% impression share. Even though they want to get more leads out of Google, there's just not more leads to be had - there are only so many people searching for their keywords! In these accounts, growth means expanding their keyword set, which probably means accepting a higher cost per lead.
Now, you may be asking "Okay, but why is being limited by budget normally a bad thing anyway?"
[Note: If you see a yellow "limited by budget" warning, that's just a Google Ads recommendation with fancy clothes on. You can ignore it. But a red "limited by budget" means there's a genuine performance issue happening.]
Think of it like this: Let's say that you're going to run a race. And yes, I came up with this analogy, not AI, so stick with me! You start sprinting towards the finish line, but after a few minutes, when you're only halfway through the race, someone sucks all the oxygen out of the air. You would collapse! You would not be able to finish that race. Even if you were on track to beat your time, and you had perfect form, and the perfect shoes on, it was the perfect day, you would not be able to finish without oxygen. You would fail.
And that's what happens with a campaign that's limited by budget. It starts the day humming along, optimizing millions of signals, trying to get you the best results, and then all of a sudden it runs out of budget. You suck the oxygen out of the air. It can't reach that finish line. It will not perform as well as a campaign that's fully funded, a runner that has plenty of oxygen to fuel them all the way to their goal, that finish line.
Here's what you can learn from Chris when you see that red "limited by budget" warning:
- Check your impression share: Specifically, look at Search IS lost (budget) over the last 30 days, and the last 7 days. If it's at least 10% lost, then a budget increase can help increase volume. But remember - this column is only meaningful for manual bid strategies and target bid strategies, not maximize bid strategies!
- Verify your CPA or ROAS: If you are, indeed, missing out on impressions due to a limited budget, check to see if your actual CPA is within +-10% of your target CPA, or if your actual ROAS is within +-10% of your target ROAS. If you're exceeding your goals, boost that budget, baby! If you're not meeting your goals, try to fix the root cause of that problem before making budget adjustments.
- Increase your budget: If both of the above are true, your campaign is essentially begging for more fuel. Increase your budget to get more leads at a similar ROI. If you're worried about things going wonky, adjust your budget in 10-20% increments, wait a week, then reevaluate.
Need help scaling your Google Ads campaigns? Book a call with me and we'll get your account growing.
