Adwords Update: Your Daily Budget

After a recent change in Google AdWords Budget Management, campaigns are now able to spend up to twice their average daily budget to help you reach your advertising goals, such as clicks or conversions. Currently, due to the fluctuations in traffic, some campaigns may be limited by budget on days where there is a lot of traffic and not be able to spend its budget on other days due to a lack of traffic. Therefore, the introduction of over-delivery could help you to gain more clicks, and potentially conversions, on the days where there is more traffic and help to improve pacing over the month.

Google have assured us that while it may spend twice the daily budget on some days, it will not exceed the monthly budget, by under spending on other days. Your monthly charging limit is worked out by the average number of days in a month (30.4), multiplied by your average daily budget. If your ad ends up showing too much and gains cost then Google will credit you for those extra costs.

HOW DID IT PREVIOUSLY WORK?

Previously, Google still calculated an effective monthly budget based on your daily budget and varied the spend throughout the month (for those campaigns that work on a monthly basis). However, before this update, the daily budget could only be exceeded by 20% (staying within the monthly budget). Meaning this update has allowed Google to exceed your average daily budget by more than double.

WHAT DOES THIS MEAN IN PRACTISE?

For example, if you daily budget was £10 a day, this would be multiplied by 30.4 (average days in a month) to produce a monthly budget of £304. You might notice over the course of a month, on some days, you could only spend £4, while on other days you could be charged up to £20. However, by the end of the month, you would not be charged any more than your original monthly budget of £304. If this was exceeded, Google would credit you for those extra costs.

THE POTENTIAL IMPACT:

• In reality, traffic is not always consistent so for campaigns that experience a huge fluctuation in traffic, this could be a very beneficial update.
• For campaigns that don’t experience much change in traffic you should not be very effected by this update.
• A concern is that if a campaign over spends at the beginning of a month, it could then heavily pull back later in the month, which could mean that you have to then increase the budget.
• For those campaigns that don’t run over an entire month, are paused or have the daily budget changed will have their monthly budget limit resets could lead to you being responsible for paying for the 2x daily budget charges.
• One suggestion is it would be more beneficial to have a ‘campaign’ budget which would give advertisers more control over their budget management.
• At equimedia, we think this could potentially be a useful tool for some campaigns, but it will mean we will have to be even more diligent with our budgets!

If you have any questions around budget management or are looking for assistance then please get in contact: new.business@equimedia.co.uk