How do we spend more without diminishing profit margin (i.e. lowering ROAS or increasing CPL)?

It is nearly impossible to increase your budget without thinning your profit margin, at least temporarily. This is because you're expanding the audience size, targeting less low-hanging-fruit, and pushing the algorithm to go into uncharted territory where it doesn't know who to target yet.

We often recommend temporarily "leaning out" your account when trying to scale. Activities like this are helpful to preserve your profit margin while you're waiting for the algorithm to adjust to a higher ad spend:

  • Pause brand awareness campaigns like video shopping
  • Scale back brand campaign by reducing budget and or changing bid.
  • Find brand keywords that are taking money in the other search campaigns

It becomes even more difficult when your account has maxed out its spend (meaning it reached its entire market/audience), because at that point the only options available to us is using a lower-spend outbound campaign (such as YouTube or display) can increase brand awareness and introduce your offering to a new audience. We recommend starting these campaigns with a lower budget to see how it affects the overall campaign performance. Your main campaign conversion driver campaigns should become more active as result of running these outbound campaigns, thus allowing us to increase the budget on the outbound campaigns incrementally.

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