Did you hear?!? If you advertise on Google AdWords, you could see your campaigns spend increase up to 2x’s the average daily budget! On October 4, Google AdWords notified advertisers in their accounts and on Twitter that a change had already happened to the way budgets get handled on a daily basis. It didn’t go over very well.
In the tweet, Google announced, “To help you hit your advertising goals, your campaigns can now spend up to twice your average daily budget.”
Say What??? The link leads to the broader notice that the change took effect and is not optional.
This from Google, “advertisers won’t be charged more than your monthly charging limit: the average number of days in a month (30.4) multiplied by your average daily budget.” That is obviously key. To reiterate: advertisers will not be charged for any overages above the expected monthly budget that come from this change.
Still confused? Here is a better explanation
Even though this change sounds alarming is actually makes a lot of sense. You won’t be charged more than your monthly charging limit. Google explains that “Internet traffic is like an ocean. Some days, there will be small waves. Other days, there will be great big ones.” On low traffic days, fewer ads show up; therefore Google will help make up for this by showing more ads on days when traffic is higher. Before this update, campaigns could spend 20 percent more than the daily budget on a given day but overall wouldn’t exceed the calculated monthly budget.
Why does Google AdWords have daily budgets???
Why, particularly with this change forced on advertisers, isn’t there an option to set a monthly budget or a budget for the duration of the campaign if it has a fixed runtime? That’s how budgets get allocated, and that’s how managers are expected to operate. Daily bid adjustments don’t address this issue. And usually the reason daily budgets get adjusted — resetting Google’s monthly charging limit — is because advertisers see that campaigns are under or over performing.
During a campaign, advertisers want to have had the opportunity to get as many clicks and conversions as possible within their given budget. A daily budget is really just a limitation advertisers are forced into by having to allocate a monthly budget evenly throughout the 30-day period. But Google’s change here — that daily spend could exceed the budget by “up to 2 times” — is also arbitrary. What if it turns out there are a handful of days when it would benefit the advertiser to triple the daily budget, knowing there are days that will spend a fraction of the daily limit?
Ideally, if Sunday was a slow day and you campaign only spent $100 of the $200 budgeted, I’d want the system to automatically roll over the unspent $100 to be available Monday and allow the campaign to spend up to $300 that day. That’s not quite what’s happening here. How can advertisers know that their campaigns aren’t being depleted after multiple days of heavy overspending?
Overdelivery credits
This is where over delivery credits come into play? With over delivery credits, maybe it doesn’t matter. “Sometimes we deliver over your monthly budget. In those cases, we’ll credit the over delivery cost back,” says Google. This is the measure that should help advertisers feel a bit better about the change. Advertisers can see over delivery by day from the Reports section in AdWords.
Still confused??? That’s okay, we are here for you. Feel free to reach out to us with any questions. Good luck!