Google has elected to increase the maximum amount each campaign can spend on a daily basis; campaigns can now spend up to double the amount of the set AdWords daily budgets.
Historically, Google has always allowed AdWords daily budgets to overspend by 20% to allow for fluctuations in search traffic. This means that if total search traffic is higher on certain days then the ad budget will be flexible to allow your ad to be shown more on these days. However, Google has now changed the daily budget cap allowing campaigns to spend up to 100% more than the set daily budget. This means that, on high search traffic days, your campaign could spend more than double the daily budget you have set.
Daily budget = £10
Maximum daily spend = (£10 x 2) = £20
Even though you could spend up to 100% more than your AdWords daily budgets you won’t be charged over the monthly budget which is determined by multiplying your daily budget by 30.4; the average number of days in a month. This means you could spend over the monthly budget. However, any spend over the monthly charging limit would be credited back to your account.
Daily budget = £10
Monthly Budget = (£10 x 30.4) = £304
Actual monthly costs = £320
Over-delivery credit returned = £16
Important: A monthly charging limit is only applied if the daily budget has run for the full calendar month!
This means that any changes to your daily budget throughout the month, or if a campaign is restarted in the middle of the month, then the campaign will not have a monthly charging limit, but your daily budget may still be increased by 100%. This can lead to very high costs and any budget changes to campaigns must be closely monitored, especially if limited by budget.
Daily budget for days 1-15 = £10
Daily budget for days 16-30 = £20
Expected monthly budget = £450
Actual monthly budget = none
Maximum total monthly costs = £900
Google has stated their reasoning for these changes is to help maximise ROI by showing your ads when the searches are at their highest. The true impact of this daily budget change remains to be seen and we will be keeping a close eye on our client’s campaigns in the coming weeks to see if the daily budget change has any effects on the overall spend for the accounts.
For further information on these budget changes and Google AdWords budgets in general then see this link from Google to learn more.
If you are currently running AdWords campaigns or are thinking of starting an AdWords campaign and are worried about this new AdWords daily budgets change then be sure to contact myself at firstname.lastname@example.org or the Key Principles team on 0115 880 0211 to see how we can help.