AdWords Might Spend Double Your Daily Budget Limit Now

NOTE: This post has been updated since its original publishing to include more detailed information from AdWords on this change. See end of post for update and link to further documentation.

Yup. You read that headline right. Announced on the day it begins, Google will now potentially spend up to twice your daily budget limit to “help you meet your goals”. PPC Twitter is going nuts, as you might imagine. Who thought this was a brilliant idea? Seriously. At an extremely bare minimum, this should have been announced in advance to give people a chance to make adjustments and not in a panic to do so and explained WAY better.

From the “announcement” post:

Double Your Daily Budget Spend in AdWords

What if my goal is to stay within my budget?

Here’s a scenario that seems to make this seem highly implausible in cases where AdWords could potentially serve at 2X daily limit every day:

  • Budget limit of $10/day.
  • Monthly cap should be $304 ($10 x 30.4).
  • AdWords serves $20/day (2 times daily budget limit amount) for first 14 days of the month.
  • Total spend in those 14 days is $280.
  • That leaves $24 for the remaining 16.4 days in the month (to stay within total spend limit of daily budget $10 times 30.4).

What happens then?

Is it A:

Client gets free clicks at the $10/day limit for remaining days in month (which would be approximately 14 days if you assume AdWords would only serve $10 on any remaining day and figure that would allow for an additional 2.4 days where you paid and the rest on Google).

Is it B:

You’d be out of budget after 16.4 days and out of luck to have ads run the rest of the month without a budget increase.

Is It C:

This only applies to campaigns that are either not already hitting their daily budget limits? If you’re consistently at or near your daily limit, will this simply not apply?

This needs to be clarified.

So, Just Adjust Budgets Throughout The Month

Well, the above also assumes that you never change your budget during the month because, as I tweeted, fun fact, if you change your budget throughout the month this figure goes out the window as far as having a handle on what that monthly charging limit would be, according to AdWords’ own documentation (and I have experienced this even before this change under these circumstances):

Changing Your Daily Budget Limit

Here is the full page the above comes from.

But It Will Help Advertisers “Reach Their Goals”

What, exactly are these goals that this will help them reach? It says clicks and conversions are examples of goals. I think this is probably intended to make budget management easier – let the system show your ads more when there is more traffic. That part, in a vacuum, is not a terrible idea. Being able to use “unused” budget that would be leftover at month’s end on days where traffic might spike is not a bad idea.

But, I’m thinking more about campaigns that are using their budgets up either every day or close to it. Isn’t that our goal when managing accounts? To try to get the most we can out of the dollars available? The point really is that this should not be mandatory.

It is hard to not be at least a little cynical and think this will certainly help Google reach revenue goals, at least until the scenario I outlined above gets explained. Otherwise, it is hard to see how some accounts can have it both ways – double the limit for some period of time and then drop off or free clicks? It is confusing.

How Will Real Advertisers Likely React To This In Action?

I can’t see this going over well for non-professionally managed accounts. Unless the scenario I described above actually happens (the lots of free clicks version), in which case, advertisers will be thrilled. If, however, their budget – which for clients means the total amount they have allocated to spend on clicks for a given period of time – will just potentially get blown in less than a full month and their ads might stop running will make advertisers angry. If there is another way this will work, I am anxious to hear it.

I can’t imagine too many small businesses being thrilled at having twice what they were expecting billed to their credit cards or hitting their billing thresholds twice as fast? It will be confusing to say the least. I can see a lot of calls to AdWords asking “why am I being billed at twice the daily budget limit I set?” Again, unless the rest of the month is given for free, this seems nuts.

Here’s another scenario that Google probably doesn’t think of either what if you have set your limit at a point that is below “all of the available traffic” for a reason? Like the volume of business you’re getting at that spend amount is meeting your goals. Now, that advertiser will have to adjust their budgets downward and keep a very close eye on them to keep their results in their desired sweet spot. And, that introduces the whole “you changed your budget during the month” piece into the equation.

What Now?

I am hoping that this was just very poorly rolled out and explained. Google has a pretty solid history of not explaining things well. I’m hoping I am just not understanding this properly.

In the meantime, communication with clients to give them a heads up and more time monitoring budgets and trying to figure out how this will really work. It certainly seems to provide an advantage to professionally managed accounts, and maybe also those that are using outside bid management tools too.

An opt-out option would be nice. Maybe that will happen if this goes poorly and advertisers get pissed. Maybe it will not be hugely impactful? Time will tell.

What do you think about this? As always, sound off in the comments or hit me up on Twitter (@NeptuneMoon).

UPDATE:

AdWords has finally answered many of the questions in this post. Summary is that you shouldn’t see crazy spending in the first part of the month that would deplete you for the latter part of the month. If, you have “leftover” budget toward the end of the month, you could see a bigger push or spend then though.

You can read the full answers to questions we’ve posed as an industry here from AdWords.

Comments

  1. Yes, I definitely want an “opt out” of this. I don’t trust them to meet my client goals as much as I put the time and attention to detail to meet their goals, there is no way. there are so many client specific particulars. And what happens if they double budget because they think they will get more conversions and they don’t? For clients with bigger daily budgets on campaigns $500+, there could be some serious budget alterations and peaks and valleys through the month. I’m not a fan of this in the least.

  2. great write up. Thanks. I fully agree with Google badly communicating on these types of changes. Let’s hope it’s not as dramatic as it seems.

    Also agree we will be spending “more time monitoring budgets and trying to figure out how this will really work”.

    In order to facilitate just that, i created a script.
    The script will compare the anticipated ad spend based on your campaign daily budget settings with the actual ad spend.
    It will check for overdelivery in any of three periods: yesterday, last week and last month.
    In case of big differences (overdelivery by Google) it will report an alert, log the alert in the specified Google Sheet and inform you about the alert via email.

    Hope this will benefit the readers over here.

    Here’s the script:
    http://nilsrooijmans.com/daily-budget-overdelivery-alerts-script/

  3. Thanks for sharing with all possible breakups & details. But i don’t think doubling daily budget will help low budget advertiser.

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