Dave Naffziger's Blog

The proper way to control your PPC budget is to alter your bids. If you’re spending too much, lower your bids. You’ll get more clicks for your budget dollar doing it this way.

There are only 3 reasons you should ever cap your adwords/overture budgets:

1. Starting a campaign. You don’t know conversion or traffic yet and you don’t want to throw money down a bottomless pit while figuring it out.
2. Brand advertising. I don’t understand why you’d spend brand advertising dollars on PPC campaigns, but if you are spending it, you’re typically applying a budget. More than a few studies show that PPC does not function effectively as a brand advertising medium.
3. You’re bidding the absolute minimum that you can on all keywords, and you’re still spending more than you can afford, then you have no choice but to use the daily budget caps.

None of the three reasons indicate anything favorable about your business. #1 (starting a campaign): you don’t know your conversion. You’ve got to figure it out ASAP. #2 (branding): well, good luck. You’re going to have to spend a ton of cash to meaningfully impact the typical measures of brand advertising. #3: you need more money. Go beg and borrow for more dollars. You know that the campaign is profitable, so grow it.