Last week Google dropped a bomb on the AdWords community, when they announced that they were now going to decide, on their own, when they would spend double your daily budget for you. They say their criteria for this would be when your campaigns are performing at a level where spending more money than you had planned was good for you.
According to Google, your daily budget is not what they use as a guide, they use your monthly budget. So, in their engineering perspective, you will still never spend more than your “monthly” budget, you just might burn through it faster than planned, leaving you with no ads running at the end of the month. Google determines your monthly budget by taking your daily budget and multiplying that by 30.4, the number of days in an average month.
If your daily budget is $10 then your monthly budget would be $340.
Predictably, the AdWords community reacted poorly to this announcement. But, like all things Google, they get to make the rules and then change them as they see fit, when they see fit.
Having seen this dance more than a few times from Google, rather than protest and become outraged, we chose to watch the campaigns closely and determine what we can do to minimize the impact for our clients.
Who may not be affected
I need to note here that I am working with a small sampling of data and clients and your observations may be entirely different.
The people most likely to be unaffected are those that are not running any sort of goal tracking. This is common with branding ads where there is no real conversion goal, just a need to get the company name and brand in front of as many people as possible. Without goal tracking Google has no way to determine if the ads are working or not and can’t use that data to increase your ad spend rate.
In addition to that, I have not seen any effect on Google Shopping ads yet. This may be due to budgets, or the platform, or any of a hundred other reasons, but for our clients at least, we have seen zero effect on Google Shopping ads.
Are you affected?
The obvious way to see if you are affected is to look at your daily spending on your ads and compare that to your budget. If your budget is $10/day and Google is spending $20/day then you are heavily affected. In our case, the worst offender I have seen so far is a roughly 15% overspend on one specific campaign. For this client, if the spend rate continues, their ads will stop running with almost 5 days left in the month.
What can you do if you are affected?
Here are several options for reducing the impact of the new rules at Google on your AdWords account.
- Cut your daily budget. The obvious solution is to reduce your daily budget by the amount extra that Google decides to spend. If your daily budget is $10 and Google is spending $20, reduce your budget to $5 per day to force Google to only spend $10.If you choose this route be prepared to watch your campaigns daily to be able to adjust the budget as needed. You may find that Google doesn’t increase your ad spending by the same amount every day.
- Restrict the hours and days your ads will show. You can reduce the amount of your daily spend by further tightening the hours your ads run. In most cases you should already be doing this, but reducing the ‘dead time’ in your ads will help reduce wasted spending and leave more money for those days and hours where your ads really work the best for you.
- Duplicate your campaigns. This is the most aggressive way to manage your ad spend. Duplicate your affected campaigns and schedule one to run for the first half of the month and the other to run the second half of the month. Cut your daily budget in half and let Google double it for you.This is nearly the same as option 1, but it gives you a little more room to let things run on autopilot rather than watching them daily.
In the end, we have little choice but to try to adapt to the ever-changing Google landscape. Most of their announcements seem draconian on the surface, but almost always turn into opportunities for aggressive thinkers looking for a way to outperform their competitors. This may turn into an opportunity to dramatically increase your exposure and conversions at the end of the month if all of your competitors are running out of ad money and their ads stop running.
Be prepared to take advantage of these changes where your competitors aren’t.