AdAi – Calculating Reclaimed Ad Budget
AdAi reclaims ad budget by turning off cannibalistic ads (i.e. ads that provide little to no incremental value over SEO). Reclaimed ad budget is calculated on a daily basis and is reported in the AdAi user interface. Each month it is summed up and used to calculate AdAi fees for the prior calendar month. The amount of daily reclaimed ad budget is based on the difference between expected daily spend and optimized daily spend per search term, with a minimum of zero.
Expected Daily Spend
The expected daily spend is determined per exact match search term (as defined in the Google Ads user interface) and calculated as expected daily clicks multiplied by expected CPC.
Expected CPC
Expected CPC is taken directly from Google Ads. It is calculated as the minimum average CPC for the search term over the past 14 days for which we have data using the lowest third of the daily averages available.
If there is no CPC data for the past 14 days, AdAi reenables the search term (no longer optimizing it) until CPC data is detected. This ensures we have a recent (within 14 days) CPC to use to calculate savings, at minimal loss of optimization. This is referred to as “cost rebasing” and can be seen in the AdAi user interface.
Expected Daily Clicks
Expected daily clicks are calculated based on the expected ad CTR multiplied by the actual daily impressions.
Expected Ad CTR
Expected ad CTR is calculated as the average (mean) daily ad clicks for the search term over the past 14 days for which we have a full day’s data (no optimized days) divided by the average (mean) daily impressions for that same search query taken from Google Search Console (GSC) over that same period. By using ad clicks divided by GSC impressions, we are able to take into account ad scheduling, targeting, etc. for the ad relative to the total search volume.
Actual Daily Impressions
Actual daily impressions are the highest daily impressions for any page for the search query as taken from GSC. By using actual impressions to calculate expected daily clicks, we are able to provide accurate estimates at a daily level, even when there are large changes in search volume due to seasonal changes, trending topics of interest, etc.
Optimized Daily Spend
Optimized daily spend is only reported for exact match search terms that have been disabled by AdAi for at least a portion of a given day. It is simply the actual spend reported by Google Ads for that exact match search term for a given day.
Examples
Day #1
| Actual Daily Impressions | 20,000 |
| Expected Ad CTR | 5.5% |
| Expected Daily Clicks | 1,100 |
| Expected CPC | $2.50 |
| Expected Daily Spend | $2,750 |
| Optimized Daily Spend | $1,500 |
| Reclaimed Ad Budget | $1,250 |
Day #2
| Actual Daily Impressions | 22,000 |
| Expected Ad CTR | 5.5% |
| Expected Daily Clicks | 1,210 |
| Expected CPC | $2.50 |
| Expected Daily Spend | $3,025 |
| Optimized Daily Spend | $750 |
| Reclaimed Ad Budget | $2,275 |
Please note that in order to optimize or improve the performance of AdAi for the benefit of all users, Revvim may, from time to time, revise its calculation for reclaiming ad spend.