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A Smart Shortcut or Strategic Risk?

A Smart Shortcut or Strategic Risk?

The Pros and Cons of Shared Budgets in Paid Search

By Aletheia’s SEM Team

As marketers know, shared budgets in paid search allow a single budget to be distributed dynamically across multiple campaigns. That sounds efficient, but shared budgets also come with trade-offs that can impact campaign performance and strategic alignment.

So, when should advertisers use them?

Shared budgets can be a useful tool if you’re:

  • Managing multiple campaigns with the same overall objective (e.g., lead generation, awareness, or traffic)
  • Working with a limited or fixed budget that needs to stretch across several initiatives
  • Operating in environments where demand fluctuates, like seasonal industries or variable CPC markets
  • Looking to reduce manual work and simplify setup—especially for accounts with dozens of campaigns

Let’s break down the pros and cons, with examples from our Aletheia paid search team expert experience.

 

✅ PRO: Simplified Budget Management

Shared budgets save time and reduce the need for manual allocation across individual campaigns.

Example: A retail client with multiple brand campaigns (Core, Home, and Personal Care) set a shared budget across all three. The team could manage spend from a single point instead of setting individual campaign limits—cutting down on overhead and complexity.

⚠️ CON: Potential for Misalignment with Business Goals

Automated budget distribution doesn’t always reflect business priorities.

Example: In the same retail scenario, the Personal Care campaign was underfunded while the Home campaign received most of the budget. This wasn’t aligned with our client’ business goals, which required a strong Personal Care push. The team had to manually adjust to a 60/40 budget split to regain control.

✅ PRO: Better Utilization of Limited Budgets

When budget is tight, shared budgets can help maximize results across campaigns by reallocating based on demand.

  • Example: For a campaign spanning Texas, Arizona, and California, a shared budget was used to support impression share goals. Google automatically reallocated budget in real time based on search volume, and the campaign:
  • Achieved 11% impression share across all markets
  • Reached 14% in the DFW area

⚠️ CON: High-Performing Campaigns Might Get Starved

Shared budgets can unintentionally underfund top-performing campaigns.

Example: A health insurance provider found its Family/Individual campaign—despite having higher CTR and CVR—received only 7% of the budget, while a broader NonBrand campaign took the lion’s share. Automation overlooked performance in favor of volume.

✅ PRO: Flexibility for Seasonal Fluctuations

Shared budgets adjust dynamically based on keyword competition and seasonal search patterns.

Example: A health insurance provider used shared budgets across its NonBrand Group and Employer/Company campaigns. As search volume shifted, the platform reallocated budgets without manual intervention—helping to capture demand during open enrollment periods.

⚠️ CON: Loss of Control Across Geographies

If your goals include geographic parity, shared budgets may work against you.

Example: A technology consultancy set a shared budget across Dallas, Austin, San Antonio, and Houston, intending equal distribution (~25% per city). Actual spend skewed heavily:

  • Houston: 53%
  • Dallas: 25%
  • Austin: 14%
  • San Antonio: 8%

Houston’s higher CPC drove the imbalance. Without campaign splits, the team couldn’t course-correct—leading to visibility and efficiency issues in lower-budget cities.

Final Takeaway

Shared budgets are a powerful feature when used in the right context. They offer efficiency, flexibility, and adaptability. But they also risk underfunding key priorities, starving strong performers, and reducing your control.

So what should you do?

Start with your business goals. If campaigns share the same objective, seasonality, and budget constraints, shared budgets can save time and optimize spend. But when precision matters—by geography, product line, or performance—manual allocation might be the better call.

Need help evaluating your campaign structure? Let’s talk.

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