Google Ads Overspending? Maybe Help is on the Way (or Maybe Not)

If you’re a PPC marketer, you’re likely familiar with the budgeting options in Google Ads that ensure your campaigns don’t overspend your allotted amount.

If not, just know that all campaigns have daily budgets (except a new beta we’ll talk about below).

You can also group campaigns together and give them what’s called a “Shared Budget” – but it is also just a daily budget. In the article below, we’ll give you a bit of a history lesson on budgeting in Google Ads, as well as explain why your campaigns might be going over their daily budget, and even your monthly spend target.

Because let’s be real, someone is going to ask you sooner or later why a PPC star can’t seem to stop an account from overspend. At the end, we’ll let you know what Google has in the works to hopefully answer our prays of budget simplification.

A History Lesson:

For some history, everything used to run quite smoothly with daily budgets – we could divide our monthly budget by the number of days in the month and easily set our daily budgets to pace evenly. We could develop budget trackers in Excel and other programs that would essentially calculate the month’s total spend in Google Ads, subtracted from our total budget, and divide that figure by the number of the days left in the month in order to give us a new “daily budget target” each day.

Having a formula like this, that took into account previous spend for the month, helped us reallocate funds properly after pushing spend for a couple of days during a sale, dealing with a traffic boost due to PR, or coming across a few days with lower than average click volume.

To continue to pace properly, each day we’d check in on campaigns and adjust the daily budget accordingly, by taking the new pacing number into account.

But, in late September 2017, things got uber complicated!

In probably the most absurd announcement to date Google notified advertisers of a major budget change summed up in a simple tweet, “To help you hit your advertising goals, yours campaigns can now spend up to twice your average daily budget.”

Say what, now?

Google Can Now Spend 2x Your Daily Budget:

There’s honestly no way for us the easily explain this, other than taking it directly from the source. In Google’s help center, you can find an article on Why Costs Might Exceed Your Average Daily Budget. From this article, we’ve pulled the important parts below to best explain the shift.

Google Ads helps you maximize your return on investment (ROI) by showing your ads more often on days when Search traffic is higher. When your ads are shown more often, your total daily cost might be up to 2 times your average daily budget, unless you’re paying for conversions. If you pay for conversions, your daily costs may be more than 2 times your daily budget. However, with all Google Ads campaigns you won’t be charged more than your average daily budget multiplied by the average number of days in a month (30.4).

In summary, Google has thrown a wrench in things. Due to the new machine learning trend, Google decided they should have more control over our budgets, and we should have less – however, this change came with a slew of issues.

Some examples of challenges people ran into:

  • First and foremost, people began going over their monthly budgets and some of us are still figuring out how to best explain it to internal stakeholders (maybe share this article with them if you’re stuck!). Using the budget tracking formula explained above works up until the last few days, but then all of a sudden with Google having a random option to spend more than 2xs your “average daily budget” – your account can overspend. When this happens earlier in the month, we have ample time to adjust, but when it happens later in the month, it could crush us!
  • This feature was based on search traffic, but not necessarily performance. So, say I am an e-comm retailer, and I know that one of my authorized sellers is going to have a HUGE sale on my product, but I won’t be discounting the product on my site during that time. There may be a huge influx of traffic, but I actually don’t want Google to start showing my ads more and push me over budget. What I want, is for Google to abide by my daily budgets, and adjust them as actual daily budgets – not making them pretend budgets with a potential to overspend based on my average daily spend divided by 30.4. Seriously.

A Fix? No.

So, what were advertisers to do? In April 2018, we thought we saw a fix on the way! Google announced Campaign Total Budgets and we could have sworn our prayers were answered. The feature allowed us to set a total budget for a campaign, and a timeframe for that total to be spent. Campaign Total Budgets could only be applied to individual campaigns though, not as Shared Budgets across campaigns. Also, the budget would still be spent according to Google’s search traffic, versus putting advertisers back in control. So, some issues could arise, but at least we wouldn’t have to deal with overspend. This seemed like a viable option, and as we all hustled to implement Campaign Total Budgets – we learned in the minute details of this change, that it was ONLY FOR VIDEO CAMPAIGNS!

Again, say what?

JUST VIDEO?

That’s right, our Search and Display campaigns have been back at square one ever since – with potential to overspend and less control for us advertisers. In early 2019, we wrote an article on Seasonal Bid Adjustments and figured this could at least give us SOME control back, even if overspend was still a potential problem.

Like in the e-comm example we shared, we could greatly reduce bids during the other retailer’s sale, in hopes that Google wouldn’t spend too much in our account on a day we don’t foresee ourselves having a strong conversion rate. But again, the Seasonal Bid Adjustment feature is still in beta, and not available in all accounts. Plus, it’s not a real fix, just a workaround for our budgeting woes.

Another Fix? Maybe!

In June 2019, some PPC marketers in the Twitterverse mentioned that there were seeing a teensy little drop down in their Search campaign settings, giving them the option to set a monthly budget versus just a daily budget.

We’ve seen this option in some of our accounts, but not all, meaning it is still in beta and/or not rolled out fully.

To check if you have the feature, login to your Google Ads, navigate to a campaign, click settings and at the top near Budget, click the drop down. Where it gives you the option to change your budget figure, does it also give you the option to change from a daily budget to a monthly budget? If so, the feature is live for you!

So, is this a fix? Maybe. Since the feature is so new, there is little to no documentation on it yet. And we have questions!

  • What happens if you reset campaign budgets mid-month? Maybe a campaign is under-performing lately, and you want to lower its monthly budget, while increasing another campaigns monthly budget? Can the system handle changes like this?
  • Are there any absurd caveats, such as “we can actually spend 2xs your monthly budget?” Hey, it’s their fault we have to ask!
  • Can we determine what a “month” is for us? Some businesses run on different “months”, to try to make everything even (30-day cycles).

Have you used this feature yet? Do you have questions of your own? Maybe you just want to tell us how it’s working out for you. Drop your comments below!

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