It is critical to plan budget changes appropriately when managing a paid search campaign. Even if you set a daily budget for your campaign, you must note that all engines work towards a billing period. This billing period is essentially 30.4 times your daily budget (365 days in a year/12 months or 30.4 days/month).
The engines reserve the right to under deliver or even over deliver by up to 20% every day on your daily budget to try and help show your ads a little more on days when your campaigns are most popular. The system is designed to make up for low traffic days by slightly exceeding your daily budget on higher traffic days as long as it does not exceed your monthly budget limit.
Many factors can impact your budget:
- If you change budget mid-day the engines will typically try and spend 50% in the AM and 50% in the PM, however this is all settings and demand based. So say you spend 70% in the AM and then adjust the budget at noon. It will then spend 50% of your new budget in the AM. Note that in this case you could end up spending more the day you made the change or if you lowered budget your spreading could be pretty slim in the afternoon.
- If you change your budget multiple times a day you will be changed on the highest daily budget that you chose.
- If you change budget mid-month you will be charged for the month no more than the new budget multiplied by the number of days that remain in the month plus the total amount spent for the campaign prior to the budget change. For example $113 spent so far + ($10/day X 7 days remaining) = $183
- If you change your budget multiple times a month the same would apply as the mid-month.
- If you pause the campaign mid-month, because it’s working to a monthly billing cycle it might not fully reconcile to your daily budget x 30.4 days.
Even if you don’t necessarily change your daily budget, the following actions are considered budget changes (for computing the maximum amount you’ll be charged within a calendar month):
- Changing campaign end date
- Changing delivery method
Additional elements that will confuse the system are if you’re max CPC’s are higher than your daily budget cap. So for example your budget cap is $5.00 and your max CPC is $15, the engines are confused and won’t show because a click would result in overspending your budget, even with the 20% in mind.
Budget management is such an important part of a healthy paid search campaign. Keep these points in mind when planning campaign changes!