This is Why Budget Attainment Should Be a KPI

A wise marketer once said “measure everything.” As Klipfolio explains, Key Performance Indicators, or KPI for short, are measurable values that indicate if a business is meeting their objectives. KPIs can measure the overall performance of the company, or focus on departments or specific processes. While a handful of marketers think this value indicator is on the way out, many still take an active interest in carefully selected KPIs.

PPC marketers tend to focus on a certain few KPIs (more to come on that later), but rarely on budget attainment. Given how important it is for every marketer to prove ROI, reporting on spending the intended budget seems crucial to understanding the full story. But first, let’s look at why KPIs are essential to the modern marketer.

But KP-Why and KP-How?

Keeping an eye on KPIs allows marketers and businesses to take a step back and see what’s been going on in their company and within their campaigns. How can you articulate to the boss that the campaigns have been working if you haven’t been tracking the performance in a measurable way?

Klipfolio provides a framework for making a SMARTER plan for your KPIs:

  • Specific – define your goals
  • Measurable – decide how you plan to measure your goals
  • Attainable – make sure your goals are realistic (budget, time investment, etc.)
  • Relevant – your goals must make sense for the company
  • Time-bound – set a time period and stick to it
  • Evaluate – sit down and go over the results
  • Reevaluate – reassess your goals and adjust as needed

Goals and key performance indicators should include all of the above for marketers to be successful, but they also have to be appropriate to each unique business.

The Most Important KPIs for Paid Search Marketers

There are enough KPIs out there to keep you busy for days, but if you’re in paid search these are the most common goals to track and measure:

Click Through Rate (CTR)

Much like it sounds, this indicates how many people saw your ad and were intrigued enough to click on it. Your CTR can affect your Quality Score and in turn your budget!

Quality Score (QS)

Google’s QS rating indicates how relevant your keywords and ad content are (using CTR and other factors) to determine how much you pay for each click.

Cost Per Click (CPC)

CPC reflects how much you spend per click and depends on many factors, including your QS, how competitive the keywords are, and your bidding strategy. Keeping an eye on this metric can help you save money per click.

Cost Per Conversion/Acquisition (CPA)

CPA is calculated based on the total amount spent versus the amount of actual conversions you earned.

Conversion Rate (CVR)

CVR is calculated based on how many people achieved the goal you intended, such as a sale on an eCommerce website or a newsletter signup on an informational site. Depending on which conversion you intended defines how that KPI is measured.

Impression Share

This tells you how much of the search impression pie your ads are getting.

PPC marketers hear common industry acronyms and abbreviations flying left and right and assume these are the only KPIs their business should measure. While standards became so for a reason, it’s important to reflect and measure what KPI makes the most sense for your company. If not, you might not get the kind of results that influence strategy and make a real change in the business.

What is Budget Attainment and Why is it Overlooked?

Budget attainment is one KPI that PPC marketers regularly leave off the table, despite how much information that metric can provide. Budget attainment says a lot about how things are being managed. Agencies or individuals are either given a campaign budget by clients or they set one, and then they try to spend that budget accurately every month. Seems simple, but the story doesn’t always play out that way.

If the PPC marketer overspends the budget, it’s a problem for obvious reasons. Even if overspending meant achieving another important KPI like conversions, the client simply may not have the extra money; hence, allocating a budget in the first place. If the PPC marketer underspends the budget, the client will ask why they didn’t put all the resources they were given into getting maximum results. Meanwhile no one can consistently measure a return on investment if the investment is different every month, and therefore there’s also data integrity at risk. Ultimately, if PPC marketers can’t spend budget accurately and consistently the client will want to spend their money with someone who can.

Not realizing the importance of consistent budget allocation month after month, paid search marketers often overlook budget attainment as a goal in campaigns. One of the problems with attaining budget is ongoing fluctuations in parameters involved in PPC. Manually navigating these changes, while maximizing results and achieving budgets every month would require almost constant optimization from marketers. As a result marketers tend to overspend or underspend, trying to hit those targets with any kind of accuracy. This goes for any sized budget.

Meticulous Budget Attainment with Machines

Manually optimizing paid search campaigns to hit the budget right on target is challenging and very time consuming when done without machine assistance. In our experience, PPC marketers that used the power of machine learning automation to help manage campaigns were two and a half times more likely to hit budget targets on AdWords and seven times more likely on Bing Ads, compared to rule-based manual campaign automation.

Chris Hanson from 3GEngagement says,

“Machines perform complex tasks around bidding, budget management, and optimization. Account managers are able to focus on things like generating ad copy, landing pages, keywords, and otherwise applying their industry knowledge to service customers.”

3GEngagement graph of success

Since leaving bid and budget management up to our machine learning technology, Chris Hanson’s team has increased margins up to 25% and campaigns are on budget every time.

Machine learning optimization allows campaign managers to focus more on strategy, creative/display, campaign monitoring, environmental or economical changes, increasing or decreasing the budget, and interpreting the machine learning data.

Machine Learning Budget Attainment You Can Bet On

Budget attainment needs to be on the PPC marketer’s radar as an important KPI of how their campaigns are progressing. Pacing a budget carefully over time encourages consistent growth over the month and accurate results on performance. Pairing this KPI with machine learning is a winning combo. Because we know it works, we definitely challenge marketers to measure budget attainment and to attempt bid and budget management with the help of machine learning technology – it may be the best KPI you ever decided on.


Image Credits

Feature Image: Unsplash/ Olu Eletu

Image 1: 3GEngagement Success Story via Acquisio

Cassy Trussell

Cassy Trussell

Cassy is Acquisio's Content Specialist and resident Community Manager. With degrees in both Communication Studies and Graphic Design, coupled with agency and freelance design and copywriting experience, she has an ideal trifecta of skills to back up the entire marketing team. A passionate foodie, she can tell you all the best dishes in the city. When she's not writing, designing, or engaging with Acquisio's community, she spends time with her dog Derp, a local Instagram star.

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