Whether you are a solopreneuer or Fortune 500 company, having, and more importantly, sticking to a marketing budget is critical. Overspending can result in nightmares for CFOs and could make the difference in paying the bills for small business owners on tight margins. So why does your Google PPC campaign go over budget? Let’s take a look.
Contrary to what many believe, this isn’t a dirty trick by Google to spend more. In fact, the digital giant made an announcement this month reminding people about the potential for a campaign or campaigns to exceed the daily budget.
On October 4, 2017, Google announced to all advertisers that there would be a change in the policy allowing campaigns to exceed the daily budget by up to 20%.
The new rule is that they can now exceed the daily budget by as much as two times. Google’s explanation for this change is that it will help advertisers ‘meet their advertising goals.’
Because of this possibility, marketers and online advertisers need to adjust their strategies. Unless you want to spend every month explaining to your boss why you’re over budget, you will likely want to dial back the spend.
Even though the daily budget is now ‘flexible,’ the monthly budget is still defined as the average daily budget multiplied by 30.4 days. So, the larger question is why have daily budgets at all if they are only a ‘soft limit’ and no longer have any real meaning?
The good news, however, is that Google has also instituted a policy that if ads exceed the monthly budget, advertisers will review a credit for the difference. So, at least you’re not billed for thousands of dollars when you’re only expecting hundreds of dollars.
Unless you want to spend every month explaining to your boss why you're over budget, you will likely want to dial back the spend Click To TweetWhat Google is trying to do is compensate for fluctuations. If some days have a lot of traffic, it can increase the daily budget, and that increase would help spend the overall budget. For instance, you may have days that do not spend the daily budget, while other days you are at maximum daily budget. The new rule allows Google to spend for more clicks on those ‘maximum’ days.
Ginny Marvin, who wrote an article about this on SearchEngineLand, had a great idea. Why can’t days where there is an under spend be rolled over into the next day? Then at least spend guidelines would still be in place. As the new rule stands, there is really no longer a need for the daily budget limit anymore.
Orod
There are two questions here:
1) Why there is a daily budget for each campaign if it will be balanced monthly?
2) What happened if the daily budget changes in the last 10 days of a month from for instance 100$/per day to 10$/per day?
The monthly budget will be in this case approximately 2100$/month, so then how can system keep truck of such case.
We understand that Google loves clicks, but after October 4, 2017 Google decides how much we must spend per month by balancing the daily budget.
It’s a shame and it’s not strange that the company gets millions of penalties every year in all continents.
Chris Thompson
That’s a real good question. After this update, I don’t think there needs to be a daily budget. If they could eliminate the Daily Budget and keep a Campaign Lifetime Budget then it would be a lot easier to understand how much is ultimately being spent.
Regarding your 2nd question, because you are defining it as a daily spend, you can change that number at any time during the month. I would advise taking a look at your keyword average CPCs because if you lower the daily budget too much so that it’s lower than the average CPC, the ads won’t show. You have created a scenario where the keywords have become too expensive.