So, the action Google suggests is to raise the budget. While it’s definitely good for Google, it’s not necessarily good for your business.
Here is what the stats looked like when Google suggested a budget increase:
What it also means is that you can get more conversions for the same budget. The only thing you need for this is to reduce the target CPA (it also works with other bidding strategies). By how much? Well, as you might already know, there’s no direct correlation between your bid and ad position and traffic volume.
So, you can’t tell, for instance: “if I decrease bids by 2x, my traffic will decrease by 2x”. Or: “If I increase bids by 20%, I’ll get 10% more conversions”. Or, smth like this. What I usually do is decrease target CPA bids by ~20% and monitor campaign’s/shared budget’s behavior. The more the budget is restricted, the more I can reduce the bid.
In this case, Google recommended increasing the budget by 2x and I reduced the target CPA by 30%. See what have happened:
I’ve got almost the same number of conversions, but almost twice cheaper! In your case the Google’s response to such action may be different, so you need to experiment: to find the optimal budget, bid, CPA for your business goals.
Possible scenarios
1) You decrease bids and your daily spend decreases to <0.75 of your current budget
Say, the budget is $100/d, and your daily spend became $75/d or less. It means
- you reduced by too much, or
- bids of your competitors were too close to yours, so even small reductions lead to a big decrease in traffic.
So, you may want to increase bids. For instance, you decreased by 30% and it led to a big drop, so you may want to increase bids, say, by 15%.
2) You decrease bids and your daily spend decreases to 0.75-1x of your current budget.
It means you’ve reached the point where the number of conversions you get is near to maximum for your budget.
3) You decrease bids and your daily spend is still ≈ your current budget.
It means you have even more room for decreasing bids and getting your conversions even cheaper. You can try to reduce bids again.
Make sure you gave the algorithm a few days to adjust to your changes. The only exception is when the next day after reducing bids you get <0.5 of your normal number of impressions per day. In this case, just set the previous bids back and wait a few days until the algorithm adjusts to your previous CPA and number of conversions.