If you are managing Google AdWords, and you have a fixed budget for your campaigns, you will want to listen up to this week’s PPC newsletter. Because Google just declared open season on every last penny of your budget.
Late last week, Google quietly announced that they will now conveniently allow you to spend up to 2x your daily budget on “days with lots of high quality traffic.”
Here is the quiet announcement from Google (in the form of a support article).
This is big news, because it potentially changes everything we have come to know about AdWords budgeting. Let me explain.
Monthly budgets calculated daily
While almost all companies work under a monthly advertising budget paradigm, Google only allows you to set daily budgets. Most advertisers will divide their monthly budget by ~20 to ~30 days to find a daily budget number (depending on how you feel about weekends).
On a daily basis, Google would allow you to spend 20% more than your daily budget on peak budgeting days. That means if your budget was $100 a day, you might spend $120 on one day, and then $80 on another.
Now your daily budget might be $200 on one day, and $0 on another. That’s significant, and could really mess with the results for a lot of advertisers.
The good news is that Google won’t let you go over 30.4x your daily budget in a given month. Basically, you can still be safe with your days-to-months calculation, and things will even out over time. They will even return your money if you go over.
But the reason why this is concerning is that in theory, you could go the first 15 days of the month and spend your entire budget. Then have nothing showing the rest of the month. Imagine explaining that to your boss (or your clients).
While this probably won’t affect campaigns for most mature advertisers (and might actually be viewed as a positive for those who are locked-in and profitable), my concern is in those just getting started out with AdWords.
New campaigns beware
I’ve talked with countless advertisers who have already blown their entire budget with Google in a few days by trusting default settings. Now you can potentially lose everything even faster.
This creates an even bigger barrier of entry into AdWords, which should be concerning to Google. But I guess they have $89 billion reasons to say otherwise.
One thing I always advocate is doing a soft-launch of your new campaigns to test the waters. Use a small fraction of your budget to test out campaign settings, measure results, and reflect on what happened.
With this new development, soft-launches become even more important. Start with a fraction of a fraction of your budget, and work your way up from there. And pay extra close attention to everything when you are launching anything new.
As I say in PPC Course, “your first month is always your worst month.” That sounds tame by comparison. Soon I might have to say “your first month is going to be a dumpster fire.”
More coverage of this article: Google announces AdWords daily budgets can overspend by 2x, automatically.
What do you think about Google’s 2x Budget increase?
No big deal? Worst development since enhanced campaigns?
Let’s hear it!