Breaking: Major Changes to How Google Spends Your Budget
Outside of overhauling the UI, not much had changed in AdWords this year…until yesterday.
Google made a hush-hush announcement (there’s still nothing on the Inside AdWords blog) in which they revealed a major shift in how they choose to allocate your daily ad spend. Per Google:
“Starting October 4, 2017, campaigns will be able to spend up to twice the average daily budget to help you reach your advertising goals.”
Now, before you pull your credit card from the Billing and Payments tab, this does not mean that Google is going to double your daily budget indefinitely. They’re not trying to bleed you dry. Think of it less like robbery and more like “big data knows best.”
What changed with your AdWords budget?
Effective October 4, Google can double the amount of money you’ve said you want to spend per day on a given campaign. So, if a campaign in your account has a budget of $150, Google can decide to spend up to $300. Note that this change affects all budgets, whether they are unique to a campaign or if they are shared.
They’ve always had the ability to exceed your daily budget in the righteous pursuit of clicks and conversions: they just capped it at 20% instead of, you know, 100%.
This process is called overdelivery, and it makes a lot of sense. Some days, 1,000 people might search for “novelty koozies,” and other days that number could drop to 200. Google, benevolent as they are, wants to make sure your ads are served to as many prospective customers as possible (they also don’t want to leave unspent money on the table).
Basically, on days where traffic is high, you could see your costs swell up to 100%. Don’t panic. This will be counteracted on slower days, when ad spend is below your desired daily budget. While this doesn’t mean you’re going to spend more than your“monthly charging limit” (the average number of days in a month—30.4—multiplied by your average daily budget) it sure as hell means you’re going to hit that number.
What do these changes mean for you?
Well, for one, you’re probably never going to come in under your monthly advertising budget again.
This change will maximize your monthly ad spend, putting your ads in front of more eyeballs. This represents opportunity for you. But for Google, this is more than opportunity: it’s a chance to increase ad revenue. If every advertiser comes, like, half a percentage point closer to hitting their monthly budget, that adds up.
If you’re using some form of daily tracking to gauge how you’re pacing towards monthly targets (particularly common for agencies), you’re going to see some sporadic numbers during a given month. If your ads are overserved a few days in a row, you may receive a concerned phone call from your boss or client. Just tell them it’ll all come out in the wash: daily fluctuations will go in both directions, and spend will normalize by month’s end. While you may spend a few more dollars over the course of a month, that was money that had already been earmarked for AdWords. You’re seeing more clicks and, if your account’s in great shape, this means a parallel uptick in new business should soon follow. While it’s certainly a big change, it shouldn’t be cause for alarm.
Just be prepared to see your daily ad spend fluctuate in the coming weeks—and check back for more data as we look into our own client accounts and see how this change shakes out.