AdWords Update Allows Daily Budgets to Spend 200% of Set Amount

AdWords Update Allows Daily Budgets to Spend 200% of Set Amount

Google AdWords has announced a big change to its ad delivery system that could negatively impact conversion goals and cause campaigns to go significantly over budget.

Effective today, October 4, 2017, AdWords now allows for daily budgets to be exceeded by twice of the set amount. Users received a notification within AdWords, linking them to a detailed announcement to learn more about the change.

It’s unclear how this change will affect cost per conversion goals, but it has the potential to give advertisers and their clients a ton of headaches.

Many marketers are already aware that daily ad spend on a Google AdWords campaign fluctuates day-to-day, and could previously spend up to 120% of your set daily budget.

Increased spending is triggered in the event that the service’s algorithm determines your campaign could benefit from a higher daily budget. The total monthly spend is not supposed to exceed your daily budget x 30.4 (for the average days in a month).

But what happens if you change you daily budget throughout the month? The Google announcement states:

“A monthly charging limit won’t be used if your daily budget changes throughout the month, even though the 2 times daily limit still applies.”

They give the following example to help clarify:

“Let’s say your campaign runs for three days. You set a daily budget of $30 for the first day, $40 for the second day, and $50 for the third day. You could be charged $60 on the first day, $80 on the second day, and $100 on the third day due to the 2 times daily charging limit. This means that you’d be charged $240 in calendar month and a monthly charging limit won’t be used.”

So if you’re having a flash sale for 3 days and want to increase budget each day exactly like the scenario above, with a total budget of $120, you could actually spend double if you’re not closely monitoring your campaign.

Yikes.

This change is reminiscent of the recent updates to Exact Match Close Variant, where AdWords can now take liberties with Exact Match keywords, swapping singular for plural, a misspelled word for the correct spelling, or even rearrange the order of words in a keyword.

But as diligent marketers have learned over the last year, some of these “close variants” are going even further than described—sometimes behaving similarly to Broad Match targeting, which many competent SEM strategists avoid all together.

By carefully documenting instances of close variants completely changing the search intent of search queries, we’ve been able to recoup thousands of dollars in account credits for clients after presenting the evidence to Google.

This latest update is touted as being beneficial to advertisers (similar to the was the Exact Match Close Variant change was) as a means to increase clicks and conversions, but that remains to be seen.

Google concludes its daily spend update announcement with the caveat that there is potential for spend to go over your daily budget x 30.4, and if so, your account will be automatically credited. But from what I’ve learned with Exact Match Close Variant, it pays to be hyper vigilant.

It would behoove smart marketers to check monthly to ensure any overspend is actually being credited, and to closely monitor any change in conversion costs over the next couple of months.