Ad groups where you are overbidding the price at which a click is profitable.

If your competition is not bidding highly, this technique can get your ad high placement while keeping your CPC low. However, if the competitor decides to raise their bid, this can drive your ad group into the red.

If your bid is high enough and the competitor’s bid is high enough, this can be devastating to an account. The daily budget tool serves to function as a ‘stop-loss’ that prevents your account from getting drained.

Assuming someone did their keyword research correctly and picked keywords that are relevant to their business from the start, most of your optimization will be involved with writing better ads and matching landing pages to improve rather than deleting them.

You want to be careful to delete a keyword that is performing badly too hastily. There was a reason you picked it in the first place, right? I mean, if it was a mistake to pick it in the first place then yeah, go ahead and delete it. But, if you still believe the search intent of the keyword matches with what you bring, deleting can be a least desirable move IMHO. If it’s expensive and not performing well, all the more reason to decrease your bids until it’s performing up to par.

Your second statement is correct, but I was more directly dealing with the situation where an account is hitting its budget. In this case, adding keywords without lowering bids wouldn’t fix the problem, which is hitting the daily budget.

Thanks!

Also, adding long tail terms and additional variations can bring more traffic at really low costs. Helping you get the most of your budget.