Google Gets Greedy. Huge Same Day Adwords Change Doubles Daily Budget

GainTap is a Chicago based digital marketing company and Google Partner. We manage Adwords accounts for small businesses. If you need help or have concerns with your Adwords account, please contact us.

Google Greed LogoImage source: seomofos.com

Here’s what Google isn’t telling you about their recent move to double Adwords daily budgets.

As a company that provide PPC services, we’ve had to reach out to plenty of clients warning them of this update. If you haven’t logged into your Adwords account yet, you should. That’s the only way you would know about a major update to Google Adwords budgeting that’s making advertisers angry. They sent a same-day notification through Adwords that effective immediately, your campaigns will be able to spend double their daily budget when Google determines there’s a lot of search volume for your keywords. They however will not let you exceed your calculated monthly budget limit. I say calculated because there is no setting in Google Adwords to set a monthly limit.

How Google Calculates your Adwords Monthly Spending Limit

Google takes your daily budget and multiplies it by 30.4 to calculate a monthly spending limit.

Adwords Monthly Budget Calculation Example

You have a daily budget of $40. That would be a calculated monthly budget of $1,216 ($40 x 30.4).

Why Doubling Your Adwords Campaign’s Budget is Bad for Advertisers

Your Ads Will Get Turned Off Mid-Month

Let’s use another example. Let’s say you have the Adwords Campaign budget of $40 from our above example. Google determines there’s a lot of search volume for your ads in the first week of October. Google lets you spend $80 / day for the first week. You have now spent $560 in the first week. If this were to continue for the rest of the month your campaign should supposedly shut off after hitting $1,216. This means you only run 16 days of ads this month.

Your Costs for Bad Keywords Will Increase

Especially for individuals running broad and broad match modifier keywords, you’re going to see a lot more wasteful spending. If your ads start triggering for some trending, unrelated phrase you could see a big increase in spending if Google doubles your daily budget to accommodate.

Who is Going to be Most Affected by This Adwords Update?

If You’re Testing Adwords for Less Than a Month

This is really going to affect you if you are running less than a month of Adwords because you are stuck with these two possibilities:

  • You could spend double your budget
  • Or you could end up under performing if you halve your budget to prevent overspending

This could affect anyone testing Adwords for short periods of time or seasonal businesses. Or really, any test where you are going to see big spikes in traffic on days Google feels your ads deserve more clicks.

If You’re Running a Long Term Branding Campaign

If you’re running a branding campaign where your goal is spreading awareness, you often want to have consistent ads running over a period of time. With this change, you could easily have your ads turned off after a few weeks if you do not monitor your account aggressively.

If You Don’t Check Adwords Daily

Adwords accounts that are “set it and forget it” will suffer from an increase in wasteful spending. If you’re not actively adding negative keywords on a daily basis you could be spending twice the money on bad keywords.

If You Have Low Quality Scores

For Adwords accounts with low quality scores, you will be paying more upfront costs. Getting an increased quality score requires a combination of improving relevance of an ad, keyword and landing page. For some businesses, it takes time to make these updates and they would prefer a more consistent stream of traffic so they can make changes over time. This means, it is not beneficial to get a ton of upfront traffic to low quality score keywords. It would be better for these businesses to stretch that traffic out over a period of time.

Who Benefits From This?

The main benefit would be if there is an increase in valid, qualified keyword searches for your ads. You will no longer hit as low of a budget cap and could get more conversions earlier in the month. Advertisers who are monitoring their accounts daily will also likely be able to react to big swings in click volume and fix negative keyword issues.

Opinion: Google Shows its True Colors and They’re All Green

I believe this is another update to Google search products that is aimed at profiting the company at the expense of businesses. There have been a lot of updates in the last two years from increasing the size of ads to eliminating the right side ads. Here’s what I think Google should do for Adwords customers.

Google Should Have Provided More Warning

Google should have provided more warning before rolling out a big change like this. They have every Adwords user’s emails. The proper thing to do would have been to send an email ahead of time so accounts could be adjusted.

Google Adwords Should Include an Optional Setting (Like Enhanced CPC)

There should be a checkbox to exclude your campaign from allowing a doubled budget. There is no reason why this feature has been left off except Google thinks it’s in the best interest for the advertiser.

Google Adwords Should Finally Allow a Hard Monthly Max Spend Limit

Google Adwords does not have a monthly spend limit like Facebook and most other platforms. Though Google has said they will not spend more than your calculated monthly spend limit, the inclusion of this feature would help advertisers feel like they have some control. The notion that you have less control over your daily budget and no ability to set a monthly limit adds up to one big psychological hurdle.

What Are Your Thoughts?

If you have thoughts about this please leave them in the comments section.

 



Author: Graham Onak

When not running the day-to-day activities of GainTap, Graham writes about technical optimization for websites and online marketing programs.

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