The budget is where so many advertisers fail.
So many users new to Adwords and Pay Per Click quickly see their budget eaten up and dismiss the whole Adwords system as expensive and not for them. When in truth if they understood the system better and made a few small changes they would see their campaigns improve and their budget drop.

You could be haemorrhaging cash without even knowing it.

There is a very simple change you can make that will have an almost immediate effect on your pay per click budget. This could save you a fortune -
Do you advertise on the Adwords 'content network'?
Do you even know what this is?
You can find it in 'Edit Campaign Settings' more in a second on how to find it.

The content network will see your ad appear right across the Internet on sites related to your chosen keywords via Google's Adsense program.

The problem is that in most cases there's a huge difference between your ad on the search results page and your ad on someone elses site. The difference is in the state of mind of the person that will see your ad. A person seeing your ad in Google's search results is proactively looking for what you're offering, at least if you've got your keywords right, they've just done a search and your ad came up. When they click they're much more likely to buy or complete an action on your site.

Somebody coming across your ad whilst 'browsing' the Net, and that's the key difference 'browsing', is much less likely to complete the desired action. Since they are not proactively seeking out what you offer but have casually come across your ad as they surf the Net. Their response will be much poorer.

I suggest you immediately turn off the option to appear on the content network. It's very easy to do from the 'All Campaigns' page select a campaign by checking the relevant box next to it. Once selected click the 'Edit Settings' button at the very top of all your campaigns. This will open the 'Edit Campaign Settings' page now simply uncheck the checkbox for 'content network' found in your campaign settings at the top right under 'Where to show my Ads'.

Why you shouldn't let Google optimize your Ads.

While you are in 'Edit Campaign Settings' at the bottom left uncheck Automatically optimize ad serving for my ads. Google may show one ad more than another based on its CTR(Click Through Rate). BUT your lesser shown ad could have better ROI(Return On Investment) and bring in more sales. Google could be strangling your business right there. Unchecking this will also allow you to 'split' test ads accurately as a couple of ads run side by side will be served equally.

How to set your daily pay per click budgets.

Start with a high per click bid and get your ad shown the maximum number of times. This will build your CTR and you can then gradually lower your click bid without effecting your position. Google rewards good CTR by better positioning a good performing ad. You may want to spend less to begin with but a better attitude is to spend smarter.

Successful advertisers typically turn the daily budget up to the max in their campaign settings area, based on Googles suggested daily maximum. Cost control is then achieved through pausing poor-performing ads and groups, or lowering bids not by cutting your daily budget. If youre not appearing on the front page for a search you cant measure ROI accurately for your keywords. You must pay through the nose to begin with.

But having said that be careful not to appear in the No.1 spot as this can attract the casual clicker. Spots 3-5 are the prime spots. The viewer clicking here has at least considered your ad copy before doing so.

After initial testing if youve written a good ad and you're getting good CTR then you should see your ad hold its own when you lower your per click budget.

How to work out your daily spend.

This is important so pay attention.
If you have a monthly budget of $600 dividing it by the days in the month 30days you get a $20 daily budget.

Google will not exceed the monthly figure but they will go over the daily budget sometimes.

Don't under bid.

Dont underbid your Ad group because youre thinking of your maximum bid as your actual bid. The average cost per click on the group is the figure you should watch.