Budget Allocation & Bidding Strategy

Process

• Collect budget and performance data across all active platforms

• Read ads/references/budget-allocation.md for allocation framework

• Read ads/references/bidding-strategies.md for strategy decision trees

• Read ads/references/benchmarks.md for CPC/CPA benchmarks

• Read ads/references/scoring-system.md for health score algorithm

• Validate: confirm spend data covers ≥14 days before evaluating kill/scale decisions

• Evaluate budget allocation, bidding strategy, and scaling readiness

• Validate: verify kill list candidates have sufficient data (≥20 clicks or ≥$100 spend) before recommending pause

• Generate recommendations with kill list and scale list

Budget Allocation Framework

70/20/10 Rule

• 70% on proven channels (consistent ROAS/CPA targets met)

• 20% on scaling channels (showing promise, need more data)

• 10% on testing channels (new platforms, audiences, creatives)

Platform Selection Matrix

Business Type

Primary

Secondary

Testing

SaaS B2B

Google Search, LinkedIn

Meta, YouTube

TikTok, Microsoft

E-commerce

Google Shopping, Meta

TikTok, YouTube

Microsoft, LinkedIn

Local Service

Google Search, Google LSA

Meta

Microsoft, YouTube

B2B Enterprise

LinkedIn, Google Search

Meta

Microsoft, TikTok

Info Products

Meta, YouTube

Google Search

TikTok

Mobile App

Meta, Google UAC

TikTok

Apple Ads

Real Estate

Google Search, Meta

YouTube

Microsoft

Healthcare

Google Search

Meta

Microsoft, YouTube

Finance

Google Search, Meta

LinkedIn

Microsoft

Agency (clients)

Varies by client

N/A

N/A

Budget Sufficiency Rules

Platform

Minimum Daily

Learning Phase Budget

Google Search

$20/day

Sufficient for 15+ conv/month

Google PMax

$50/day

Sufficient for algorithm optimization

Meta

$20/day per ad set

≥5x target CPA per ad set

LinkedIn

$50/day Sponsored Content

15+ conversions/month

TikTok

$50/day campaign, $20/day ad group

≥50x target CPA per ad group

Microsoft

No strict minimum

Sufficient for stable delivery

Bidding Strategy Evaluation

Google Ads Bidding Decision Tree

Start

├─ <30 conversions/month?

│  └─ Use Maximize Clicks (cap CPC at benchmark)

│     └─ When >30 conv/month → Maximize Conversions

├─ 30-50 conversions/month?

│  └─ Use Maximize Conversions

│     └─ When stable CPA → Target CPA

├─ >50 conversions/month?

│  └─ Use Target CPA

│     └─ When revenue tracking → Target ROAS

└─ Revenue tracking active + >50 conv/month?

   └─ Use Target ROAS

Meta Ads Bidding

• Lowest Cost (default): best for volume, may have CPA variance

• Cost Cap: sets CPA ceiling, may reduce volume

• Bid Cap: maximum bid per auction, most control

• ROAS Goal: target return on ad spend

• CBO vs ABO: CBO for proven campaigns, ABO for testing

LinkedIn Bidding

• Cost Per Send (CPS): for Message Ads

• Manual CPC: recommended starting point for cost control

• Cost Cap: efficiency at scale with predictable CPA

• Maximum Delivery: highest volume, most expensive. Use only for scale with established data

• Target Cost: for predictable CPA

TikTok Bidding

• Lowest Cost: maximize conversions within budget (volume)

• Cost Cap: set maximum CPA (efficiency)

• Bid Cap: maximum bid per impression

• Budget ≥50x CPA per ad group for learning phase exit

Microsoft Bidding

• Mirror Google strategy but bid 20-35% lower

• Manual CPC for low-volume campaigns (Enhanced CPC deprecated on Google March 2025; verify Microsoft availability before recommending)

• Target CPA / Target ROAS for automated (requires 15+ conversions/30 days)

v1.5 Bidding Innovations

Google AI Max for Search

• 14% avg conversion lift for non-retail brands at similar CPA/ROAS, up to 27% for exact/phrase-match-heavy campaigns (Google Ads blog, May 2025)

• Independent data is more conservative: median +13% revenue / +16% CPA across 250+ campaigns (ALM Corp)

• Requires strong negative keyword lists (AI Max casts a wider net)

• DSA likely consolidated into AI Max by Q2 2026

• Best for: accounts with mature conversion tracking and keyword history

TikTok Smart+ Modular Control (2025)

• Lock targeting, creative, budget, or placement independently (mix of manual and AI)

• TikTok platform median ROAS 1.41-1.67 in 2025; Smart+ delivers ~53% lift over standard campaigns (TikTok for Business)

• October 2025 update added module-by-module control after early-2025 control complaints

• Best for: advertisers wanting partial AI control without full black-box

Apple Ads Maximize Conversions

• GA: February 26, 2026. AI-powered auto-bidder for Apple Ads

• Target CPA based on weekly average (not per-conversion)

• Daily budget must be >=5x target CPA for stable performance

• Two-week learning phase required; avoid changes during learning

• Currently supports installs only (not post-install events)

Meta Advantage+ Bidding

• Automatic optimization across all placements within Advantage+ Sales campaigns

• Budget automatically shifts to highest-performing placements in real time

• Best combined with broad targeting and high creative volume

Scaling Assessment

Ready to Scale (Green Light)

• CPA consistently below target for 2+ weeks

• ≥50 conversions per week (learning phase exited)

• CTR stable or improving

• ROAS above target

• No creative fatigue signals

20% Rule

Never increase budget by more than 20% at a time:

• Week 1: $100/day → $120/day

• Week 2: $120/day → $144/day

• Week 3: $144/day → $173/day

• Monitor 3-5 days after each increase for performance stability

Scaling Methods

• Vertical: increase budget on winning campaigns (20% rule)

• Horizontal: duplicate winning campaigns to new audiences

• Platform expansion: add budget on new platforms

• Geographic expansion: test new markets/regions

• Format expansion: test new ad formats on same platform

Kill List Assessment

3x Kill Rule

• Any campaign/ad group with CPA >3x target → flag for pause

• Review spend in last 14 days with no conversions → flag for pause

• Creative with CTR >50% below platform benchmark → flag for creative kill

Kill Decision Framework

Scenario

Data Required

Action

CPA >3x target

≥7 days data, ≥20 clicks

Pause immediately

No conversions

≥$100 spend or ≥50 clicks

Pause and diagnose

CTR <50% of benchmark

≥1,000 impressions

Kill creative, test new

ROAS <50% of target

≥14 days data

Reduce budget 50% or pause

MER (Marketing Efficiency Ratio)

MER = Total Revenue / Total Marketing Spend

• Assess blended efficiency across all platforms

• Target MER varies by business: 3x-10x depending on margins

• Use MER to evaluate overall health, not just per-platform ROAS

• Incrementality testing recommended for MER accuracy

Output

Budget &#x26; Bidding Assessment

Budget Allocation Health

Allocation Strategy:  ████████░░  XX/100

Bidding Strategies:   ██████████  XX/100

Scaling Readiness:    ███████░░░  XX/100

Budget Sufficiency:   █████░░░░░  XX/100

Deliverables

• BUDGET-STRATEGY-REPORT.md: Full allocation and bidding analysis

• Current vs recommended budget split (pie chart data)

• Bidding strategy recommendations per platform/campaign

• Scale list: campaigns ready for more budget

• Kill list: campaigns/ad groups to pause immediately

• MER analysis and trend

• Quick Wins for immediate budget optimization