Setting a Budget
If you’ve ever planned a vacation, you know the importance of identifying a limit for how much you can spend while allowing for the unanticipated. In the same way, AdWords lets you set daily budgets for your campaigns with the flexibility to change them at any time.
Decide how much to spend
With AdWords, you choose a daily budget for each campaign based on your advertising goals and the general amount you’re comfortable spending each day. If you’re used to working with a monthly advertising budget, you can find your daily budget by dividing your monthly budget by 30.4 – the average number of days per month.
Tip
Start small. If you’re a beginner, try a daily budget of US$10 to US$50. Check your account soon after applying a new budget to see how your campaigns have performed.
Set your daily budget
Your daily budget applies to a single campaign, not all campaigns in your account. Here’s how to choose it:
- Sign in to your AdWords account.
- Click the Campaigns tab.
- Click +New campaign.
- On the “Select campaign settings” page, scroll to the “Bidding and budget” section and enter a daily campaign budget.
- Finish (or skip) choosing your other campaign settings and click Save and continue.
Tip
Get a recommendation. AdWords shows recommended budgets for campaigns that repeatedly meet their daily budget but have the potential to earn more clicks and impressions. Learn how to find your recommended daily budget.
Change your daily budget at any time
You can change your daily budget at any time and as many times as you like.
Tip
Don’t set and forget. Check your account regularly to look for campaigns that are limited by budget or have leftover dollars. A limited budget could mean fewer clicks and impressions than you might have otherwise earned, whereas a bloated budget may actually increase the cost per click of your ads if you’re using automatic bidding. You can check the Status column on your Campaigns tab to see whether any of your campaigns show a “Limited by budget” status.
Here’s how to edit your daily campaign budget from the Campaigns tab:
- In the Campaigns table, click the budget you’d like to edit.
- Enter a new campaign budget.
- Click Save.
Here’s how to edit your daily campaign budget from a campaign’s Settings tab:
- Select the campaign you want to edit.
- Click the Settings tab.
- In the “Bidding and budget” section, click the Edit link next your campaign’s daily budget.
- Enter the new budget.
- Click Save.
Edit your campaign budgets in bulk
If you want to change the budget for multiple campaigns at once:
- Sign in to your AdWords account at https://adwords.google.com.
- Click the Campaigns tab.
- Check the box next to any campaigns you want to edit. You can also select all campaigns by checking the box in the menu bar.
- Click Edit, then choose Change budget…
- In the window that appears, you can set your budget to a specific amount, or increase or decrease your budget by a percentage or specific amount.
- Click Preview changes to see what your edits will look like, or click Make changes to edit your selected campaigns.
How budget changes take effect
When you change your daily campaign budget you’ll see these adjustments immediately in your account. Based on when you edit your budget, the way that your campaign consumes your budget can vary. Here’s what happens to your budget based on the time or frequency of your change:
| Mid-day | Campaigns will typically spend around 50% of their budget in the day’s first half and |
| the remainder in the day’s second half. However, if demand for your ads happens to | |
| be greatest early in the day, you might spend 70% of your daily budget in the | |
| morning. If you made a budget change around noon, you might spend an additional | |
| 50% of your new daily budget in the afternoon, which could result in a total spend | |
| for the day which is slightly greater than either of the daily budgets which were in | |
| effect that day. This results from the fact that the system is designed to make up | |
| for low traffic days by slightly exceeding your daily budget on higher traffic days, as | |
| long AdWords never exceed your monthly charging limit. | |
| If you’ve lowered your daily budget significantly, it’s also possible that your ad | |
| distribution will slow significantly for the rest of the day. | |
| Multiple times day | You’ll be charged based on the highest daily budget that you chose for that day. |
| Mid-month | You’ll be charged for the month no more than the new budget multiplied by the |
| number of days that remain in the month plus the total amount spent for the | |
| campaign before the budget change. | |
| For example, if on November 24th your daily budget is US$5, and you’ve already | |
| spent US$113 this month, and on the same day you change your daily budget to | |
| US$10, you’d be charged no more than as follows: | |
| $113 spent so far + ($10/day X 7 days remaining) = $183 | |
| Multiple times a month | The same calculation applies as the one for changing your budget mid-month |
Tip
Even if you don’t deliberately change your daily campaign budget, the following actions are considered budget changes (for computing the maximum amount you’ll be charged within a calendar month):
- Changing your campaign end date.
- Changing your delivery mode (standard delivery or accelerated delivery).
- Choosing a different time zone for your AdWords account.
Find out how to select a time zone and how it affects your budget cycle.
Why Cost Might Exceed Your Daily Budget
AdWords helps you maximize your return on investment (ROI) by looking out for days when search traffic is higher, and then showing your ads more often on those days. When this happens, your total daily cost could be up to 20% more than your usual daily budget – but AdWords prevents your campaign from overspending for the month as a whole based on a monthly charging limit.
When campaigns cost more than their daily budget
If you’ve noticed that the total daily cost of an ad campaign is more than the amount you budgeted for that day, that means your campaign is spending more of your budget on days with higher search traffic and less on days with lower traffic. This way, up to 120% of your daily campaign budget can be used to show your ads on certain days of the week or certain times of the month based on fluctuations in traffic, but not more than you spend on your campaigns each month.
Search traffic can fluctuate for the following reasons:
- Whether it’s a weekend or weekday
- Seasonality and holidays
- Geopolitical and cultural events
Dipping into your daily budget for other days in the month helps your campaigns reach their potential. However, in cases where costs exceed the 120% cap, you’ll still only be charged for the 20% over your daily budget.
Example
If your daily budget is US$10 per day, and you’ve accumulated US$15 in costs on a given day, you’ll only be charged US$12. AdWords uses a monthly charging limit to prevent you from accidentally getting overcharged.
Monthly charging limit
While the cost of your campaign can be 20% above your daily budget on any given day, AdWords uses a monthly charging limit. As long as your budget is consistent for an entire month, you won’t be charged more than your daily budget multiplied by the average number of days in a month, which is 365 days in a year ÷ 12 months or 30.4 days/month.
Example
If your budget is US$10 per day throughout an entire month, the maximum you’d be charged is US$304 (US$10 daily budget x 30.4 average days per month) in that billing cycle.
If your budget is the same value throughout a month, and you accrue more costs in a calendar month than your monthly limit allows, you’ll only be charged your monthly limit. For instance, if your daily budget is US$10 per day throughout a month (a US$304 monthly charging limit), and you’ve accrued $310 in costs over a calendar month, you’ll only be charged $304.
However, a monthly charging limit won’t be used if your daily budget changes throughout the month, even though the 120% daily limit still applies. For campaigns that are paused in the middle of the month or that otherwise don’t run for the full month, you may see discrepancies between your average daily budgets and your total charges.
Avoid a Depleted Daily Budget
If you have a limited budget, you want to make the most of every cent you spend on your advertising campaign. Instead of discontinuing your campaigns and missing out on clicks, or spending more than you can comfortably afford, consider the following techniques for spending your campaign budget more effectively:
- Lower your bids for campaigns that are “limited by budget,” potentially reducing the average cost per click.
- Let AdWords automatically bid for you to get as many clicks as possible with your campaign’s current daily budget.
- Choose “Standard delivery” for your ads, instead of “Accelerated delivery.”
If your campaign is meeting its daily budget but could earn more clicks and impressions, you’ll get a “recommended budget” to estimate how a different budget could improve your performance.
Lower your bids in campaigns that are “limited by budget”
While counterintuitive, slightly lowering your bids in campaigns that are “limited by budget” could potentially help you earn more clicks. Lowering bids for budget-constrained campaigns could reduce the average amount you pay when someone clicks your ads, with the potential for your budget to go further and get more clicks. Lowering bids too much, however, could result in fewer clicks if your bids are no longer competitive. If you choose to decrease your bids, check your campaign a few days later to ensure that you haven’t lowered your bids too much.
Let AdWords automatically bid for you
An alternative to lowering your bids yourself is to allow AdWords to automatically adjust your bids for you. When AdWords automatically sets bids for you, changing your keyword or placement maximum cost-per-click (CPC) bids, it’ll still stay within a target daily budget that you’ve set for that campaign. Note that it’s not possible to use automatic bidding with the following campaign types:
- “Search Network only – Product listing ads”
- “Display Network only – Mobile apps”
How to allow AdWords to automatically bid on your behalf
- Click the Settings tab within the campaign you want to edit.
- Scroll to the “Bidding and budget” section and choose “AdWords will set my bids to help maximize clicks within my target budget”
- Enter a daily budget for your campaign.
- Click Save and continue.
Change your delivery method from “Accelerated” to “Standard”
Think of “Accelerated delivery” like jet fuel. It’s likely to use up your campaign’s daily budget early in the day by showing your ads more quickly until your budget is reached. “Standard delivery” is like aslow-burning candle. The delivery of your ads is spread more evenly throughout the day.
If you’re using manual bidding, by default your campaign will be set to “Standard delivery.” It’s not possible to use “Accelerated delivery” with automatic bidding.
How to change your delivery method:
- Sign in to your AdWords account.
- Select the Settings tab within the campaign you want to edit.
- In the “Bidding and budget” section, click + Delivery method (advanced) and then click the Edit link.
- Choose “Standard: Show ads evenly over time.”
- Click Save.
Find your campaign’s “recommended budget”
AdWords shows recommended budgets for campaigns that repeatedly meet their daily budget but have the potential to earn more clicks and impressions. You can use them to estimate how a new budget may improve the visibility of your campaign’s ads. The recommendations are based on a detailed analysis of your campaign’s performance from the past 15 days, along with the other factors listed below:
- Recent campaign performance
- Current campaign budget
- Keyword list
- Campaign targeting settings
AdWords won’t display a recommended daily budget if you rarely meet your daily budget, or if your campaign has limited data. If you don’t see a recommended budget, and you know your ads aren’t being shown as often as they could because your budget is limited, you might want to consider raising your budget to an amount that you’re comfortable with.
How to find your campaign’s recommended budget:
- Select the Settings tab within the campaign you want to edit.
- Next to “Budget,” click Edit.
- Click View Recommended Budget.
- Review the recommended new daily budget, if there is one, including any guidance regarding potential traffic. When you decide what your new budget will be, enter the new amount.
- Click Save.
How budget recommendations are calculated
Budget recommendations are based on keywords and determined by how many times your ad could’ve shown in total if you had a limitless budget. In other words, AdWords looks at how often your ad wasn’t eligible to show based on your budget limitations.
AdWords then compares this potential number of impressions to how often someone actually clicks your ads (your clickthrough rate, or CTR) and how much your clicks have actually cost (your actual cost per click, or CPC). This shows how much your budget would have to be to better accommodate the traffic available to you.
To take into account that search traffic and costs can fluctuate, your budget recommendation combines estimates from each day separately. This means that even if your business is cyclical – i.e. you typically see spikes in traffic throughout the week – the recommended budget relies on the average amount of traffic.
Although AdWords can calculate what your budget has to be to cover all possible traffic, they won’t necessarily recommend the full amount to you. Your recommended budget tries to capture more ad impressions without drastically changing your budget.
Example
If your current daily budget is $10 and AdWords determines it needs to be $100 to capture all possible traffic, your recommended amount may be less, such as $20 (the amount can vary depending on your current budget and potential traffic).