Google Makes a Big Change to AdWords Budgets

Recently Google announced a major change to how they will handle advertisers AdWords budgets. To save you a click, here’s the announcement word for word.

“Starting October 4, 2017, campaigns will be able to spend up to twice the average daily budget to help you reach your advertising goals, like clicks and conversions.

On days with lots of high quality traffic, your costs could be up to 2 times your daily budget. This spending is balanced by days when your spend is below your daily budget.

Keep in mind, you won’t be charged more than your monthly charging limit: the average number of days in a month (30.4) multiplied by your average daily budget.”

What does this mean?
This means that if you set your daily budget at $100 a day Google will actually spend up to $200 a day.

Here’s where it get’s confusing. In any given month, they won’t charge you more than your daily budget multiplied by 30.4. This means that ad budget could potentially be spent in the first two weeks of the month and ads will not show for the next two weeks.

Other Potential Pitfalls
In the announcement Google states that they are doing this, “to help you reach your advertising goals, like clicks and conversions.”

Knowing Google and the AdWords platform this appears to be another attempt to automate AdWords campaigns. This might be a great thing for some campaigns, but for others this can simply mean automating wasted spend.

For example, imagine a situation where your goal conversion in AdWords is a landing page view instead of a form completion. Google will use the conversion data of “landing page view” to show your ad more often when there is a high likelihood of achieving that conversion. This means that Google’s AI will be making decisions around a data point that could lead the Google AI to making the wrong decisions.

What Can You Do?

  • Watch your budgets closely.
  • Watch your KPIs – Make sure that the budget changes aren’t having a negative impact.
  • Make sure your goals and objectives are set up properly in AdWords.