Why costs might exceed your daily budget
AdWords helps you maximise 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.
For example, if your daily budget is $10 per day, and you've accumulated $15 in costs on a given day, you'll only be charged $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.
If your budget is $10 per day throughout an entire month, the maximum you'd be charged is $304 ($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 $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.
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.