AdWords Adds Automatic Overspend

10th October 2017

On the 4th October, Google notified AdWords customers that it has changed the way daily budgets are now handled by the site. The site now allows your ads to automatically overspend on their daily budget by up to 2 times your current limits.

The change was announced in a tweet by the online ad service and affects all customers.  There is no opt out on offer from the search giant.

 

The Google Adwords Announcement in Full

“Starting on 4 October 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.”

 

How is Google Calculating the “Monthly Budget”?

Google has provided an example of how its new monthly budget will work

 

Google’s Example:

Let’s say you set your budget at £5 a day and your billing cycle is 30 days. Over the course of the month, you notice that your charges vary. Some days you’re charged £2, on others you’re charged £10. But at the end of the month, your charges won’t exceed £152 (that’s 30.4 multiplied by your £5 budget). So even though your campaign costs tipped above and fell below your £5 budget from day to day, at the end of the month, you’re still charged no more than what you budgeted.

 

Problems with Automatic Overspend for AdWords

For customers who are testing new products or testing new campaigns, this has the potential to seriously disrupt the test.  If for instance, you are promoting an event, that concludes before the end of the month, or a special promotion that is designed to move your remaining stock of a particular line, you could find yourself spending double your intend ad costs.

 

The Good News About Changes to Daily Budgets in AdWords

If Google gets its calculations wrong and uses all of your monthly budget in the first 15 days of the month, it will continue to run ads up to your daily budget, before returning the overspend at the end of the month.  In effect, you could benefit from free advertising from Google, if the search giant gets its sums wrong.

 

Contact the Experts

If you find the changes to Google AdWords difficult to implement, then give the experts at DOM Marketing a call. As a Google Premier Partner agency, we can easily take away the pain from your AdWords account management.