Adwords’ New Budget Changes: What It Means For Your PPC Campaign

by Ben Goodman ***

Earlier in October, Google announced that Adwords campaigns could now spend double the daily budget. Before this announcement, the overspending limit was at 20% above the daily budget.

At first glance, it may seem like a detriment to advertisers. However, Google reassures users that they will not be charged beyond their monthly limit, although there are a few exceptions. What has raised several eyebrows in the paid ad community, however, is that this feature was not made optional.

For advertisers and those seeking to hire a pay per click advertising company, there are several new things to take note of before making any adjustments to their PPC budgeting.

Search Engine Land lists them down to the basics:

The new budgeting feature’s goal is to make up for fluctuations in traffic. If an ad does not appear due to low traffic on certain days, Google will compensate by having the ad displayed more when traffic is higher.
Advertisers with campaigns that run through the month without any changes in the daily budget will not be charged more than the monthly limit. The formula for the monthly budget is “daily budget x 30.4 days”. Campaigns that do exceed the limit will have overdelivery charges credited to them by the month’s end.
Advertisers with campaigns that don’t run for a month will be the ones to pay for overdelivery charges, as the monthly limit does not apply to them.
Aside from daily budget changes, changing these three will reset the monthly limit:

a. the date when the campaign ends
b. time zones for Adwords accounts
c. ad delivery mode
Again, this is not optional.

According to Search Engine Journal, one large problem that Adwords advertisers will have with Google’s new budget feature is that it can quickly eat up the planned budget due to unforeseen circumstances. Sudden spikes in traffic during the early part of the campaign can mean that the budget can be consumed even as early as the first week. This can be costly for businesses who plan to run short-term ad campaigns, or do ad testing on high-traffic seasons.

As none are exempt from the change, advertisers should now plan their budget more carefully to avoid unwanted expenditures. Short campaigns, in particular, must be monitored closely. It may be better to cut the daily budget in half to make sure that the advertiser is not spending more than planned. For campaigns on busy periods (such as holidays), increasing the budget can help in case of emergencies.

Ad testing also now has the potential to be more expensive. Studying previous data and applying it correctly has become more important now in order to save on money.

The budget limit change has its advantages, especially for month-long campaigns. But Google may want to consider making this an optional setting instead of mandatory. If they do not, it will be the short-term campaign advertisers that will suffer the most. Adwords is already hard enough to use for newcomers, and this feature might just make it even more difficult.