AdWords Campaigns Can Now Spend up to 2x their Daily Budget
Last week, Google changed how AdWords handles daily budgets. To better account for daily fluctuations in search volume, campaigns can now spend up to twice their daily budget (previously campaigns could spend up to 20% more than their daily budget).
So, in theory, if you have a $100 budget, you could spend up to $200 on a given day if search volume for your keywords happens to be high that day.
Some advertisers are understandably freaked out by this change – however, Google has said that they won’t charge you more than your “monthly charging limit” – which is the average number of days in a month (30.4) multiplied by your average daily budget. If they do wind up showing your ad too much, and you accrue more costs than your daily budget allows over a billing cycle, they will give you a credit for those extra costs. Here’s an example of how it works:
There is a caveat, though. The above scenario only works if you keep your daily budget the same every day of the calendar month. If, however, you make changes to your daily budget, or you pause your campaigns at any point during the month, the “monthly charging limit” calculation won’t be used – meaning you could see discrepancies between your daily budget numbers and what Google ultimately charges you.
Google provided the following example:
What does this mean for me? What actions do I need to take?
If you don’t ever change your daily budget during the month, and your campaigns are evergreen, you don’t need to worry about much. On a day-to-day basis you may spend up to double your daily budget, but Google will credit you if you happen to spend over your monthly charging limit.
If you have a short-term campaign that won’t run for an entire month, you’ll want to keep a close eye on it (monitoring daily or weekly and adjusting budgets accordingly), because the “monthly charging limit” doesn’t apply in this case. If you know your terms have particularly high search volume, you could intentionally keep your budgets low to account for the risk of overspending. For example, if you have a campaign that’s running for a week and has a budget of $700, normally your daily budget would be $100. If you know you have high search volume terms, you could set the budget at $50 to start (and then adjust accordingly once you see how you’re actually spending).
If you change your daily budgets frequently throughout the month, again, you’ll just want to keep a close eye on spend (monitoring daily or weekly and adjusting accordingly) to ensure you don’t exceed your desired monthly target. If you’re in this situation, chances are you’re probably already doing this and managing spend through some kind of pacing document. If not, here’s a quick primer on pacing documents and how they work.
For more info on the AdWords budget changes, click here.