If you’re a Google AdWords advertiser, you should take note of a recent change made to the popular pay-per-click (PPC) marketing platform. Earlier this month, Google revealed that AdWords budgets may now overspend by 2x, meaning you could be charged up to 200% of your actual daily budget.
Google made this revelation on Twitter, in which it said: “To help you hit your advertising goals, your campaigns now spend up to twice your average daily budget.” Not surprisingly, many seasoned digital marketers have been asking the question why. Why is Google trying to force advertisers to spend up to twice their daily budget? If an advertiser wanted to spend $200 per day, he or she would set a limit of $200, not $100. Well, there’s a good reason for Google’s decision to push this feature.
AdWords traffic can greatly fluctuate depending on the keywords, competition and external forces. Some advertisers may receive a substantial amount of traffic and clicks one day and few-to-no clicks the following day. This new feature is designed to balance such fluctuations. If an advertiser receives a substantial amount of traffic, his or her campaign will continue running until it reaches twice their daily budget.
The general idea is to help advertisers recoup from periods of downtime. Perhaps an advertiser doesn’t receive much traffic one day. Well, the following day he or she could generate up to twice their daily budget thanks to this new feature. And if they happen to go over this 200% adspend limit, Google will offer “overdelivery credits.” You can find these credits available in the reports section of your AdWords account.
Google further explains that under the old method, an advertiser could change his or her daily budget to $30 for the first day, $40 for the second day, and $50 for the third day. This would allow for a monthly budget limit of $120 to $144, assuming the advertiser only runs his or her ads for this period. Under the new format, however, the advertiser could be charged up to $240 for these ad runs.
The bad news is that the new overspend is not optional; it’s required for all AdWords advertisers. With that said, as long as you proactively monitor your campaigns and ad spend, it shouldn’t be a problem. In fact, it may actually help you achieve your digital marketing goals by generating more traffic that you otherwise wouldn’t receive. This feature is still new, so stay tuned for all of the latest news and updates about Google’s new overspend feature.
