AdWords Fundamentals assessment study guide
About campaign budgets
AdWords lets you set an average daily budget for your campaigns, with the flexibility to change them at any time. Your daily budget is the average amount that you’d like to spend each day over the course of the month.
While your spend may vary each day, you won’t pay more than your monthly charging limit, which is the daily budget you set, multiplied by the average number of days in a month. On days when your ads are likely to get you more traffic, you may spend up to 2 times your average daily budget. Those days are balanced by days when your spend is below your daily budget.
If you’re creating a campaign with a specific start and end date, you can also set a total budget for the entire duration of the campaign. Campaign total budgets are currently available for video campaigns only.
This article explains how to decide on your daily budget, when to use a campaign total budget, and how budget changes take effect.
How to decide on a daily budget
With AdWords, you choose a daily budget for each campaign based on your advertising goals and the general amount that you're comfortable spending each day.
Let's say that you normally spend £304 per month on advertising. To work out your daily budget, you'd divide £304 by 30.4 and would get a daily budget of £10.
Using this example, here's how you'd work out your daily budget:
304/30.4 = £10 per day (Monthly budget/average number of days per month = daily budget)
You can also create shared budgets, which let you allocate budget across multiple campaigns.
When to use a campaign total budget
When you already know how much you’d like to spend on your entire campaign, you can set a campaign total budget. Currently, campaign total budgets are only available for video campaigns with a specific start and end date.
You’ll have the option to select “Campaign total budget” when you create a new video campaign. Keep in mind that you can’t change the budget type once a campaign is created.
AdWords will try to spend your total budget evenly over the duration of your campaign while taking into account higher and lower traffic days to optimise your campaign’s performance. For example, let’s say your video campaign gets fewer views on Mondays and Tuesdays and more views on weekends. AdWords will optimise performance by spending more on days when your video is likely to get more views, while keeping your overall budget goals on track.
With a campaign total budget, you’ll only be billed up to the amount you enter for a campaign, even if AdWords serves more views or impressions than your budget allows.
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 spends your budget can vary. Here's what happens to your budget based on the time or frequency of your change:
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 as we never exceed your monthly charging limit. Learn more about Why costs might exceed your average daily budget.
If you've lowered your daily budget significantly, then it's also possible that your ad distribution will slow significantly for the rest of the day.
|Multiple times a day||You'll be charged based on the highest daily budget that you chose for that day.|
When you change your budget during the month, your spend for the rest of the month won’t exceed your new average daily budget multiplied by the remaining days in the month.
For example, let’s say you have a daily budget of £5, and as of 24 November you’ve spent £113. On the same day, you change your daily budget to £10. The maximum you’ll be charged for the month of November will be:
£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.|
Even if you don't deliberately change your daily campaign budget, the following actions are considered budget changes (for computing the maximum amount that 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.