Stop Wasting Money on PPC: Go Big or Go Home

When businesses approach me about underperforming PPC campaigns, the first question I ask is about their budget. In my experience, with all the tools available to performance marketers today, optimizing ad copy, researching keywords, and fine-tuning landing pages has become much easier. What remains a challenge is convincing decision-makers to allocate more funds to fix an underperforming campaign.

Contrary to some assertion, PPC advertising is still one of the most effective ways to drive traffic and generate leads for businesses today.

But many companies find themselves frustrated, spending money on ads without seeing the desired return.

After managing PPC campaigns across various industries for years, one thing is clear: you either spend enough to see results, or you risk wasting money. If you’re not ready to fully invest in PPC, it’s better to save your resources and focus on other marketing strategies.

The "In-Between" Trap

Many businesses fall into the trap of running PPC campaigns with limited budgets, thinking that a smaller budget will reduce risk. Unfortunately, this is a flawed strategy that often leads to disappointing results for reasons I will explain shortly.

I’ve seen this firsthand. I once managed a small-budget PPC campaign for a client in the health industry. Despite meticulously crafted ads and highly targeted audiences, the budget simply didn’t stretch far enough. We captured only a handful of leads, and after analyzing the data, it became evident that the cost per conversion was too high to sustain. In the end, we had to shut down the campaign because we were burning money for minimal returns.

So, What Exactly Makes Spending Too Little a Bad Strategy?

PPC platforms operate on auction systems. The more competitive your industry or chosen keywords, the higher your cost per click (CPC). With a limited budget, your ads will struggle to compete with those from better-funded competitors. To consistently win high-quality clicks and conversions, you must bid competitively. Essentially, PPC is a bidding war, and the bigger spenders usually win.

As Neil Patel , a leading digital marketing expert, puts it: "If you’re not willing to spend enough on PPC, you won’t gather enough data to make informed decisions. And without data, optimization is impossible."

But there’s more to PPC than just outbidding others. Spending more allows you to:

1. Gather More Data

Data is the backbone of successful PPC campaigns. The more clicks you get, the more insights you can gather about which keywords, audience segments, and ad creatives are performing well. A small budget doesn’t allow for enough data collection, meaning you’re optimizing based on limited, unreliable information. In short, you’re making decisions in the dark, which increases the chances of underperformance.

Larry Kim , founder of WordStream and MobileMonkey, explains it well: "PPC is about testing and iterating. The more you spend, the more data you collect, which means faster optimization. You can’t scale without solid data to base your decisions on."

2. Scale Faster

PPC thrives on a feedback loop—the more you learn from your data, the better your campaigns perform. With a sufficient budget, you can test different strategies, make optimizations, and scale your efforts faster. A small budget, on the other hand, slows down this process, preventing you from capitalizing on early learnings and limiting your growth potential.

According to Ryan Deiss, CEO of DigitalMarketer, “Scaling in PPC requires more than just a good strategy. It requires sufficient budget so that you can test, optimize, and eventually dominate your market."

3. Dominate Your Niche

In competitive industries, advertisers with larger budgets not only get more clicks but also enjoy greater brand visibility. Even if someone doesn’t click on your ad, repeated exposure to your brand at the top of search results or their social media feed leaves a lasting impression. A small budget simply won’t provide you with enough exposure to create that kind of impact.

ROI of Spending Big

In a famous study, WordStream found that advertisers who increase their budget can see a 50% increase in conversions over time because they can continually optimize their campaigns and outbid competitors. This finding mirrored my experience in PPC.

I once worked on two PPC campaigns side by side—one for a small local business with a $1,000 monthly budget and another for a real estate company with a $10,000 monthly budget. The results were night and day. The larger-budget campaign allowed us to split-test multiple ads, optimize keywords, and invest in remarketing. Within two months, we generated over 1,000 qualified leads, significantly reducing the cost per acquisition (CPA).

Conversely, the small-budget campaign struggled. We were constrained by limited data and couldn’t afford to test different ad creatives or target wider audiences. The few leads we did get were far too expensive, and the campaign ultimately failed to deliver positive ROI.

Summary

In conclusion, don’t waste your money on PPC if you’re not ready to spend enough. It’s better to save those funds until you can make a proper investment. PPC works best when supported by a well-thought-out strategy and an adequate budget. Running campaigns on a shoestring budget will likely lead to frustration, and you might abandon a powerful marketing channel that could have driven significant growth if funded appropriately.

If you’re serious about PPC, commit to doing it right. Set clear goals, allocate a healthy budget, and trust the process.