Why costs might exceed your average daily budget
- AdWords helps you maximise your return on investment (ROI) by showing your ads more often on days when Search traffic is higher.
- When your ads are shown more often, your total daily cost might be up to 20% more than your average daily budget. However, you won't be charged more than your average daily budget multiplied by the average number of days in a month (30.4).
Why campaigns might cost more than their daily budget
For each of your ad campaigns, you'll set a daily budget – the amount that you've budgeted to spend on your ads each day. If you've noticed that the total daily cost of your campaign is more than your daily budget amount, that means your campaign is spending more of your budget on days with higher Search traffic and less on days with lower traffic. Search traffic can fluctuate for several reasons: whether it's the weekend or weekday, or due to seasonality and holidays.
Dipping into your daily budget for other days in the month helps to optimise the performance of your campaigns and helps make sure that your ads can run a little more on days when they’re very popular.
How you’re charged when campaigns exceed their daily budget
Up to 120% of your campaign's daily 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.
If your daily budget is $10, up to $12 can be used to show your ads on certain days based on fluctuations in traffic.
Note that sometimes your daily costs might exceed the 120% cap. However, you'll still only be charged for the 20% over your daily budget. For example, if your daily budget is $10, and you've accumulated $15 in costs on a given day, you'll only be charged $12 per day. The remaining $3 is returned to you as an overdelivery credit, which you can see in your transaction history.
About the monthly charging limit
While the cost of your campaign can be 20% above your average daily budget on any given day, you won't be charged more than the monthly charging limit that AdWords uses to prevent you from accidentally getting overcharged. This means that 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 30.4 (365 days in a year ÷ 12 months).
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 $10 per day throughout a month (a $304 monthly charging limit), and you've accrued $310 in costs over a calendar month, you'll only be charged $304. Here's the maths:
$10 (daily budget) x 30.4 (average days per month) = $304
The other $6 is returned to you as an overdelivery credit.
How budget changes affect the monthly charging limit
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.
Let's say that your campaign runs for three days. You set a daily budget of $100 for the first day, $120 for the second day and $150 for the third day. You could be charged $120 on the first day, $144 on the second day and $180 on the third day due to the 120% daily charging limit. This means that you'd be charged $444 in calendar month and a monthly charging limit won't be used.