Post Updated: 30/10/2021
What does it mean? Well, it means that your ads could show more often through the day, if there was enough budget to do so. For example, if you have a click budget of £10 a day and each click costs £1, but there is enough demand for 20 clicks a day, your account would be limited by budget as it is not able to show for all 20 clicks. Google will stop your ads from showing every so often each day so that you only spend the £10 budget that you have set.
‘Limited by budget’ is measured by percentage. If your Search Lost Impression Share is 20%, this means your ad could show 20% more often if you had 20% more budget.
If you are still struggling to grasp the understanding, here is Google’s official explanation.
What Is Causing It?
Some PPC consultants would simply tell you to increase your daily budget, if the ‘Limited By Budget’ label was showing. Sometimes, this is the best answer, but there is usually a bunch of other things you can do before handing over more money to Google.
If the campaign is performing really well and you are happy with the cost per conversion that you are currently paying, then there is no reason why you wouldn’t just increase the budget. The problem we have is that it’s usually poor performing accounts that need more budget, so business owners are more reluctant to increase the budget for something that is not working so well.
There are many different things that could cause your account to be limited by budget, which I will go into more detail below:
1. Badly Setup Campaign
Badly set up campaigns are a common cause of being limited by budget. There are simply too many settings for me to run you through them all, but the common ones are keyword match types, lack of regular maintenance and leaving the ad schedule to the default setting of 24/7.
Going back to my example from earlier, if you have a £10 a day click budget and each click costs £1. But your poorly set up campaign is wasting £3 a day, you are only getting £7 worth of relevant clicks. So by cleaning up the wastage and saving that £3 a day, this will increase how often your ads show for relevant search terms and will therefore reduce the ‘limited by budget’ percentage.
2. Too Much Scope
What I mean by this is that you are biting off more than you can chew. By trying to target too much with a small budget, you might be leaving yourself short. For example, if you are a local company, you may have your geo targeting set too big or you may be promoting one too many services/products.
Try pausing a campaign or reducing your geo targeting so that you are not spreading your budget too thin. Focus on getting that one service working before you try and branch out.
3. Not Enough Budget
This one is pretty much the same as above. Your campaign might be set up correctly and performing well as it is, so you may just need to add more budget. As I said previously, if you are happy with the cost per conversion and there are no other improvements to be made, steadily increase the budget and monitor the performance.
If you are not sure which one of these issues is causing the problem, get yourself booked in for a PPC audit and I can get you on your way.