Google Ads daily budget overspend on your mind? Here’s why it happens and how to save your campaigns (and your money).
Here, you’ll find:
- Explanation of what Google Ads daily budget is
- How Google Ads budgeting works
- What causes Google Ad overspend
- How to avoid Google Ads daily budget overspend
You built a Google Ads campaign, set a fixed daily budget, only for Google to exceed it — what gives?
Running digital ads for your business is ideal if you want to grow and scale your visibility and sales. But it can also be frustrating if your campaigns are eating up your budget before you can see a return on your ad spend (ROAS).
This is known as Google Ads daily budget overspend, which is common among businesses that are new to digital advertising.
Fortunately for you, you can avoid this from happening by following the tips and tricks from our expert, Jessica Weber, Director of Account Performance at HawkSEM.
Let’s take a look.
What is Google Ads daily budget?
Google Ads daily budget refers to the maximum amount of money an advertiser is willing to spend on their Google Ads campaign in a single day.
Google averages your daily spend, so some days it’ll spend over that limit, while on other days, it spends next to nothing.
How budget works in Google Ads
Google Ads daily budget is the average amount spent daily for each ad campaign. How much you spend will depend on your cost-per-click (CPC) rate. Daily budget represents the approximate amount advertisers are comfortable spending each day over the course of a month.
For example, if an advertiser sets an average daily budget of $100, Google Ads will aim to spend around $100 per day on their campaign. Note that Google Ads interprets the daily budget as an average over time, rather than limiting spending to an exact amount on a daily basis.
So some days, it may hit $200, while on other days, it only spends $30. Over the course of a month, it’ll average out to roughly $100 spent daily. This helps advertisers maintain control over their ads costs and ensures their campaign stays within their allocated budget.
What are the causes of Google Ads daily budget overspend?
Now that you understand how Google Ads budgeting works, let’s explore the top three reasons businesses spend more than they budgeted for in Google Ads.
1. It’s the Google algorithm’s fault
Google Ads uses algorithms to decide when to spend more or less money on ads. It analyzes data, like how many people are searching for things and how likely those people are to make a purchase.
If it sees certain days have higher clicks and conversions, Google may allow overspending. Sometimes, it’ll spend more money than usual, up to 2x your daily ad budget. This can be a problem because it can cause you to spend more money than you planned. The Hard Stop Script helps ensure this doesn’t happen when it pauses campaigns (more on that below).
Here are two scenarios where Google increases your daily ad campaign spend:
Surge in search traffic volume
When search traffic spikes for specific keywords related to your Google Ads campaign, it means more people are actively searching for products or services like yours. This increased demand can result in higher competition among advertisers bidding for those keywords.
Now, if your campaign is set to maximize visibility and reach, Google Ads may show your ads more frequently. It does this to capture the increased search demand. As a result, your ads may receive more clicks, leading to higher expenditure on your daily budget.
For example, let’s say you have set a daily budget, but due to a sudden spike in search traffic, your ads receive more clicks than usual. Google Ads will continue showing your ads to meet the increased demand, potentially resulting in spending more than your intended budget.
Pro tip: By analyzing the search traffic trends and adjusting your daily budget to align with the increased demand, you can ensure that your ads continue to be effective without exceeding your budgetary limits.
Variations in conversion rates
When your conversion rate fluctuates, it can impact your overall campaign performance and ultimately affect your budget.
Here’s how it works: Let’s say you have set a daily budget of $100, and your ads perform well with a steady conversion rate. However, if your conversion rate suddenly increases, your ads become more profitable, and Google Ads may show them more frequently to capture the increased conversion opportunities.
A higher conversion rate is generally a positive outcome. But it can also lead to overspending.
With more people converting, your ad spend increases as Google Ads tries to capitalize on the success of your campaign. If you don’t closely monitor your search, social media, and shopping campaigns, your daily budget may be exhausted earlier in the day than anticipated, resulting in overspending.
Pro tip: Track and analyze your campaign performance. If you notice a significant increase in conversions impacting your daily budget, adjust it to maintain control over your spending. And optimize your campaign’s success while staying within your allocated budget limits.
2. Poorly calculated budgets (aka it’s your fault)
Every advertising campaign starts with a set budget — or least, it should. Get your budget wrong, and it’ll cost you (literally).
“The root cause of overspending is most likely mismanagement of daily budgets and poor planning for budget pacing throughout the month,” explains Weber. “For example, if the cause of overspend is raising budgets too much to make up for low front-of-month spending, raising your budget more than 20% at a time can cause volatility in campaigns.”
Pro tip: Use historical data and consider your business and advertising goals when setting your ad budget.
3. Mid-month campaign changes
Found inspiration to improve your ad campaign’s performance in the middle of the month? Don’t do it.
Google has changed how it calculates and charges for advertising budgets. Instead of looking at the last 30 days, it now looks at the current month. So if you change your budget in the middle of the month, Google starts counting from the beginning of the month again.
Here’s an example:
Let’s say you set a budget of $100 for the first 10 days of the month. Then, you increase it to $200 for the next 10 days. And finally, up to $350 for the last 10 days.
In the first 10 days, Google will calculate your monthly budget as $3,040 and can charge you up to $200 per day. So you could spend up to $2,000 in the first 10 days.
On day 10, if you increase your budget to $200, Google doesn’t consider what you already spent. It calculates a new average for the whole month, which becomes $6,080. Now it can charge you up to $400 daily for the next 10 days, totaling $4,000.
On day 20, if you change your budget to $350, Google starts over again, calculating a new monthly average of $10,640. For the last 10 days of the month, they can charge you up to $700 per day, totaling $7,000.
So by the end of the month, you could spend $13,000 on ads, even though your maximum calculated average was only $10,640. Remember, Google uses a breakdown that benefits it and charges you more than you planned to afford.
Fortunately, this extreme situation doesn’t happen often. Most of the time, your spending will vary, and you won’t come close to this scenario. But still, be cautious. Set a lower daily budget and try not to change it in the middle of the month, unless you can afford additional charges beyond the new monthly maximum.
Consequences of over-budgeting with Google Ads
The most obvious downside of overspending on Google Ads campaigns is that it eats up your budget, placing a financial strain on your business.
However, there are other consequences to consider as well, like the following:
- Limited campaign lifespan: Overbudgeting can cause campaigns to exhaust their allocated budget quickly. As a result, the campaign may end prematurely before you see results, leaving potential customers untapped and reducing the overall effectiveness of the advertising efforts.
- Limited visibility and reach in paid search: If the budget is exhausted early in the month, ads may stop appearing for the remainder of the month, reducing impressions and reach. This can result in missed opportunities to reach potential customers and drive conversions.
- Ad delivery issues: Overbudgeting can lead to ad delivery issues, such as ads not being shown evenly throughout the day or being paused during certain periods. This can negatively impact ad performance and hinder the ability to reach the target audience effectively.
Ways to avoid Google Ads daily budget overspend
“It’s best not to focus on daily spend in Google Ads as the platform operates on a monthly budgeting system,” advises Weber.
That’s because when using automated bidding, Google may overspend on a single day to capture high-quality traffic likely to convert based on user signals. However, Google will account for that over the 30-day period and underspend on other days when traffic is less attractive.
“We use account budget trackers that keep track of overall budget pacing for the month that our teams check regularly and will adjust daily budgets if needed,” continues Weber.
So here are several methods to keep from overspending on your Google Ads daily budget.
Create precise budgets at the start of each campaign month
If you’ve been running campaigns for some time, you have access to historical performance data that can guide your bidding strategy. Use this information, plus your business goals, to set realistic budgets for each month.
“It’s incredibly simple. Google operates on a monthly time frame for budgets. So take how much you want to spend in a month and divide it by 30.4 (average days in a month) and to get the daily budget number to set in your account,” shares Weber.
Once you have that overall daily number, put it toward each of your campaigns based on your strategy and priorities. Then you should have minimal to no overspend issues at all on a month-to-month basis.
Monitor your campaigns daily
Worried about how much Google’s spending on your campaigns each day? Then watch them closely to see what’s being spent daily.
Use this data to adjust your budgets accordingly to optimize ad spend. For example, if you see that your campaigns are underperforming, you can increase your daily budget to make up for it. Then when you see your campaigns are overspending, you can lower your daily costs to prevent running out of budget.
Use Google Ads’ Hard Stop script
A “Hard Stop script” can help manage money spent on Google Ads. This tool is important to use when you want to ensure you don’t spend too much on ads, especially during busy times like holidays or big sales days.
Some accounts have a “monthly spend limits” feature that can help control spending, but not all accounts have this option.
The hard stop script works by checking how much money has been spent on ads so far in the month and comparing it to a budget that you set. If the spending goes over the budget, the script will pause all the ads and send you an email to let you know. It will also add a special label to the ads that say, “PAUSED BY HS.” The script will turn the ads back on at the start of the next month and remove the label.
To use the hard stop script, you need to copy and paste it into your Google Ads account. Then, you can adjust the budget and add your email address so you get notified if the ads are paused.
This script is helpful for making sure you don’t spend too much money on ads and can help keep your budget under control.
Things to consider before using Hard Stop
Before using this script, keep the following in mind:
- The script won’t work with Performance Max campaigns because of a problem with Google’s tools. The script can still check how much money is spent and send an email, but it can’t stop the Performance Max campaigns.
- When you use the script for the first time, you must give it permission to access your Google Ads account twice.
- When you look at a preview of the script, it may say it didn’t work because it couldn’t find a label. That’s because the preview doesn’t actually create the label. But when the script runs, it’ll make the label.
- The person who made the script will update it in the future to work with Performance Max campaigns once Google fixes the problem.
- Advanced budget tracking script
- Budget pacing scripts
- Daily budget over-delivery alerts
- Daily/monthly budget management script
Use automated bidding strategies for budget control
If you want to “Set it and forget it,” then you need automation to keep costs down. You can create campaigns using automated bidding strategies that have a maximum budget. This way, your ads will spend within your desired range and then stop running once you reach your budget max.
“Try to structure your campaigns so they’re not labeled as “limited by budget” by Google,” says Weber. “This may mean having a structure with fewer campaigns, if you have lower budgets, to keep a higher level of data flowing in accounts.”
She also notes that you shouldn’t include budget changes as part of the optimization strategy for a campaign.
“We generally look at budget optimization as a different subset outside of campaign optimization,” shares Weber. “Optimize a campaign for performance and then take a step back and look at how to allocate budget between campaigns to maximize performance.”
Optimize landing pages for better conversion rates
Overspend can happen when you run a monthly campaign with Google Ads. However, you can maximize your campaigns by optimizing your landing pages to boost conversions and sales.
This way, you increase your return on investment (ROI) and return on ad spend (ROAS).
At HawkSEM, we design and build custom landing pages and write conversion copy for ad campaigns to ensure optimal results.
Pro tip: Continue improving your ad campaigns to boost your quality score by using relevant keywords, optimized landing pages, and ad extensions to provide additional info that can help searchers make a conversion decision.
Leverage negative keywords to exclude irrelevant traffic
If you’re going to potentially overspend on Google Ads on certain days, make sure it’s for relevant audiences. By adding negative keywords to your campaigns, you can prevent wasting ad dollars on clickers who’ll never convert.
For example, if you sell air mattresses, you wouldn’t want ads appearing in searches for pillowtop mattresses, so you’d add the phrase (pillowtop) to your negative keyword list.
If there’s anything you learn from this article, it should be that you don’t have to worry too much about going over your monthly budget.
While Google Ads daily budget overspend might feel like a concern, Google does an excellent job of averaging your ad spend so you don’t exceed your budget.
However, if you don’t like how it allocates your funds on a daily basis, there are measures you can take to control it. Consider learning about ad scripts to prevent overspending and to get a handle on your budget.
If you lack time or resources to implement these strategies, then consider working with a team of experts who live and breathe this every day. (We know just the team.)