Latest Google Adwords Update: The Controversy of Potential Daily Budget Overspend by 200%

  • Author: Kaspars Brencans,

On October 4th, Google Tweeted this…

Google AdWords has always been a tricky machine, and even seasoned PPC veterans tend to run into questions about platform’s functionality. In today’s PPC world, Google is looking to automate as many processes as possible, and one of the latest victims they have targeted is the daily budget.

As of October 4th, Google announced that campaigns may spend as much as 2x the daily budget. Oh, wait, did I mention that they did this over a tweet, not even an official press release?

Over-spending the daily budget is no news to advertisers, as Google has always allowed the daily budget go as high up as 1.2x the daily spend, but cap the monthly spend at 30.4x the daily budget.

Who should worry about the change?

Advertisers who show their ads periodically. Why? As Google is shifting into calling budgets “daily”, but treating them more like they’re monthly – it can impact sporadic advertisers, as they have no control of how much a campaign will spend. Will it be the allotted amount? Will it be half of that? Will it be double? No one knows…

Who shouldn’t consider this a problem?

About 60% of the advertisers, as they already have set up their ads to run per monthly basis. Google’s search engine’s usage has been proven to work in like waves the curl by the beach – Mondays having the highest traffic, while Sundays see a huge drop in comparison to the beginning of the week. Therefore, why would you want to have the same amount of budget allotted to weekends, when you could rather ride out the top of the wave by spending more on the days when people are using Google the most? And that’s what Google is trying to accomplish with their update – allowing advertisers to get more traffic to their accounts when the usage is the highest.

As mentioned before, Google will not exceed the daily budget multiplied by 30.4 on a monthly basis. Let’s look at it how it could look in real life situation.

Advertiser set’s a daily budget of $20/day. Now, the monthly budget will end up at about $608 ($20 x 30.4 days).

Potential breakdown of traffic for a week for that account

Monday: $38

Tuesday: $35

Wednesday: $24

Thursday: $16

Friday: $18

Saturday: $5

Sunday: $4

Altogether, we still have spent the same $140 that we were supposed to spend in the initial plan for the first week.

Who shouldn’t care about this change at all? (and should actually get excited about it)

The 10% of advertisers that are not able to hit their daily budget. In most cases, these are larger accounts that are looking to buy all of the possible targeted traffic out there. If one of the days of the week there is an unpredicted influx in traffic, Google will allow this account to capture all of the traffic as it will count towards the total monthly spend.

Only con for this group of advertisers – Google does select which auctions an account will participate in, and if the account isn’t properly set up and/or managed daily, there is a change that the spend might go bananas for days at a time until the leak has been found and fixed.

So who’s right in this dilemma…

At the end of the day, did Google implement this to spend more of advertisers’ money, or, was it a sincere way to improve the average account’s health? If you ask me – I’d think like to guess it’s a split decision of both, but with proper account management, this should not be an issue. If a client is profitable from PPC, the daily spend doesn’t really matter as much as the actual performance in the long cut.

PRO TIP: Script to limit AdWords daily budget

If you’re really looking to cut Google’s slack, here’s a link to a script to regain the control over budgets, built by my fellow LinkedIn friend Daniel Gilbert from BrainLabs Digital :

Link to the script: https://gist.github.com/BrainlabsDigital/2c1867781433e7163a035c16c2e4c760


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