Choose your bid and budget

To run your ads on Google, you'll need to decide on the right campaign budget and ad group bids. Your budget establishes a charging limit for an individual campaign, so it should be the average amount you'd be comfortable spending per day (or seeing on your monthly credit card bill if you multiplied your budget by 30.4, the average number of days in a month). Your actual costs may be lower, depending on how you manage your bids.

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 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.

Here you'll learn the steps for setting your bid and budget in a new campaign, and how to estimate how much you'll spend.

Steps to set your bid and budget for a new campaign

  1. Sign in to your AdWords account at http://adwords.google.com
  2. Click the Campaigns tab.
  3. Click All online campaigns, then click the + Campaign button and choose a campaign type from the drop-down.
  4. In the Bid strategy section of your campaign settings, select a strategy. If you choose the "manual" option, enter a Default bid as well.
  5. For Budget, the amount you enter should be the most you're willing to spend on your campaign on average per day over a month. You can also apply a shared budget that you've previously created in the Shared library.
  6. Click Save and Continue (on the next settings page, you'll be prompted to create and save your ad group).
  7. You may edit your bid strategy and budget again at any time by returning to your campaign's Settings tab.

About your campaign bidding options

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 with the ad auction the most you'll pay is 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.

AdWords essential

The ad auction

There are two basic bid strategies (for advanced details, see Determining a bid strategy based on your goals):

  • Manual bidding: This is the default strategy to let you manage your maximum CPC bids yourself. You can set bids at the ad group level, or for individual keywords.
  • Automatic bidding: If you're new to AdWords (or if you're busy), we recommend this strategy. All you have to do is set an average daily budget, and the AdWords system manages your bids for you, to bring you the most clicks possible within your budget. You can still set a max. CPC with this option.

With manual bidding, your ad group's Default bid amount will be applied to all keywords in your new campaign's ad group. You may change your bid amount at any time. You also may change this value for individual keywords via the Max CPC column on the Keywords tab. Learn how to choose a bid for your keywords.

Tip

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.

Setting 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 bidding strategy by setting multiple adjustments that work together, such as location and time of day, or time of day and mobile devices.

About your campaign budget

Your budget amount is for a single campaign (as opposed to a total amount across all your campaigns), and it represents 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 a daily budget of US$10 to US$50. Check your account daily after applying a new budget to see how your campaigns have performed.

Because customer traffic fluctuates from day to day, Google may allow up to 20% more clicks (or other ad activity for campaigns on another bidding option) in one day than your average daily budget specifies. We call this overdelivery.

However, our system makes sure that in a given billing period, you're never charged more than 30.4 multiplied by your daily budget amount. For example, if you budget $10 per day, the maximum you would pay is $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 daily budget you've set, a credit will automatically be applied to your account. For instance, if your monthly charging limit is $304, and you've accrued $310 in costs in a given billing period, you'll receive a credit for $6 and only be charged $304.

Tip

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.

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