Breaking: Major Changes to How Google Spends Your Budget

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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%.

google announces major changes to adwords daily budget

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. 

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Comments

hemun
Oct 06, 2017

This was a great article, thanks for sharing the useful information.

Nils Rooijmans
Oct 11, 2017

"Just be prepared to see your daily ad spend fluctuate in the coming weeks"

That's great advice.

For those interested, i decided to create a script that monitors these exact fluctuations.
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.

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

Maite
Oct 13, 2017

Well, that's helpful Nils, thanks!

Btw, loved the article, easy, clean and really useful :)

Allen Finn
Oct 16, 2017

This is really cool, Nils! What a fantastic way to counteract the lurching feeling that comes along with seeing insane budget fluctuation.

David Garcia
Oct 12, 2017

I have been using an old method to kind of counter this change Google has done. If you just simply create Automated Rules to run every hour on a campaign level, it will pause it, given the criteria you decree. For example, set a rule to run every hour to pause the campaign if the daily budget exceeds let´s say <$80 to prevent it from accumulating more cost thus the rule pauses the campaign automatically, and prevents Overdelivery.
I have been doing this since this Mandatory change happened last week. So far so good.

Give it a try people....

Quentin Cellucci
Oct 15, 2017

I set up similar Automated Rules in March of 2016. My max budget is $90/day. I have not gone over $109, even after the mandatory change happened last week. Will see how it does going forward.

Allen Finn
Oct 16, 2017

^ smart workaround.

Kristin Kiser
Oct 12, 2017

Thanks for the great article, WordStream! Useful info- good way of positioning this in a way to calm the masses ala "Think of it less like robbery and more like “big data knows best.”"

And thanks for the great script, @Nils Rooijmans!

Pay Attention Google
Oct 12, 2017

Open Message to Google:

Dear +______+,

Part of my goals are staying within budget. Quit screwing around with my money or I'll take it elsewhere.

Your customers.

Jorge
Oct 12, 2017

It's a relief to read this "While it’s certainly a big change, it shouldn’t be cause for alarm". ;)

Cheers!

Quentin Cellucci
Oct 16, 2017

Google is slick. I have a love hate relationship with them. If you want to play you have to jump through there hoops. You don't have much of a choice. They pretty much own the internet. For a small local business owner like myself, who started using the Google Adwords platform because it was supposed to help businesess like us compete with the big boys who have large budgets, this change could get dicey. A click is just a click. You still have to convert that click to a paying job. So you will have to work even harder to make sure that that your ads are relevant and the clicks you are getting are well qualified. You must also make sure you have at least an 85% call conversion rate to really take advantage of these changes.

The one beef I have with Google is how they determine your monthly charge limit. (the average number of days in a month—30.4—multiplied by your average daily budget).
I run my ads Monday - Friday. That would be average 21.6 days in a month. Google should determine your monthly charge limit by the number of days in a month your ad is actually scheduled to run. Just my opinion.

Allen Finn
Oct 16, 2017

Hey, Quentin.

Do you find that the automated rule you've implemented hedges against Google overspending based on the fact that you're only advertising M-F?

Bjørn
Oct 17, 2017

What do you all think will happen to the daily CPCs with this little trick of Googles?

Elisa Gabbert
Oct 17, 2017

We can provide some data once we know!

Naveen
Oct 17, 2017

On starting of this month Adwords has changed the budget of adwords will it really helpful for customers. whats your opinion.

Jesse Matz
Oct 19, 2017

We went ahead and created & modified a MCC monthly budget spreadsheet similar to Frederick's recurring budget script. We haven't seen any fluctuations even if google double downs that day. The campaign gets recalculated and will reduce the daily budget. It's just a game of tennis now.

https://searchengineland.com/script-set-recurring-monthly-budgets-adwords-246985

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