Google Spending TWICE Your Budget? New Budgeting Option Prevents Overspend
What's your advertising budget? That's the first thing businesses must decide when running Google Adwords. But the way Google spends your money isn't that straightforward.
Until recently, Adwords' only budgeting option was 'daily spend.' To spend $10,000/month in ads, for example, you would set it as $333/daily spend.
Fluctuating Search Volume
However, a problem arises with the inconsistent volume of searches on Google.
Some days, 100 people might search for "pink widget," and other days may have 1000 searches.
Such search fluctuations would prevent consistently reaching the daily budget.
Google Spends More Daily Than You Tell It To
As a result, Google took the liberty of spending up to 120% of daily budgets to reach the monthly average. For example, if there was a day with less than $333 spent, Google could add an additional 20% spend to another day ($399.60) to even out to $10,000 by the end of the month.
So the $333 daily budget is not what's actually spent, it's the average daily budget over a month.
Fall 2017 Update, Google Can Spend Double You Daily Budget
But in October 2017, Google released a drastic change and started allowing campaigns to spend TWICE the daily budget.
With a $333 daily budget, Google now compensates for slow days by spending up to $666 on other days.
This makes sense for long-term campaigns. But it becomes problematic when running shorter-term campaigns, or when changing campaign budgets.
I now spend more time every month monitoring the pace of my clients' ad spend.
Latest Update: Campaign Total Option (Video Only)
But that will soon change. Google recently released a new budgeting format called 'Campaign Total Option.'
With this new option, you set an exact budget with start and end dates. While daily spend may still fluctuate, the main benefit is that you won't have to monitor the spend so closely. It's easier to manage and doesn't overspend.
For those who advertise on Facebook, this is equivalent of Facebook's 'lifetime budget.'
Currently, the Campaign Total Option is only available for video ads, but they'll eventually roll it out to search ads.
When To Stick with the Daily Budget
The downside is this new option doesn't work with shared budgets. Shared budgets, as its name suggests, refers to multiple campaigns sharing a budget. That way if one campaign doesn't use its spend in one day, the additional budget can be allocated toward another campaign. It maximizes budgets and is a mainstay for most of the accounts I manage.
If you're running lots of short-term promotions, you'll want to use the new Campaign Total Budget once they become available for search. With long-term campaigns, stick with the daily budget.