5 Experts Weigh In on AdWords Daily Budget Update

With advertisers alarmed at Google’s recent announcement about changes to daily budget in AdWords, we asked experts to weigh in on the situation. Below five of our favorite experts react to the recent update with advice for what this means for advertisers.

Matt Van Wagner, Find Me Faster

“That’s insane.

It means, without warning, that advertisers who pay attention to day of week budgeting constraints, and who manage monthly targets in a disciplined way will have to rethink and retool their processes.

What I object to most is timing of change – advertisers had zero notice.  What kind of business partner does that to its loyal customers?

We can make adjustments, but this takes whatever was on our plate for today and forces us to 1) understand what impact its likely to have, 2) make adjustments, 3) test and measure and hope we guess right.

My first thought is that we’ll set any currently constrained budgets to .5x and hope that Google doesn’t underdeliver to the 2x daily budget.  In other words, we’ll try to neutralize the impact because there are budgets we purposely constrain to limit delivery to less profitable or measurable campaigns.

Our preference for budgeting is unconstrained; to set budgets sufficiently high so the traffic constraint is not based on network inventory, but on performance.  However, we also have large customers with tricky overlapping seasonal peaks and troughs that we use budget constraints purposely to limit traffic.”

Brad Geddes, Adalysis, BG Theory

“Here’s my $0.02…

This seems to be yet another change aimed to help small accounts with tiny budgets use their monthly budget. While there may be some benefit in undermanaged small accounts; unfortunately, these type of changes keep messing up larger accounts.

Predicting run rates and ensuring your ads are paced properly over a month is going to become much more difficult. Building an API tool or utilizing scripts that constantly monitor and change budgets over many campaigns will be the only way larger accounts who want to control pacing will be able to manage their budgets.

These types of changes put a lot of unnecessary burden on companies who understand how budgeting works and want to be in control of their own budgets by having to build more tools just to work around the AdWords system.”

Aaron Levy, Elite SEM

“In the same boat as Brad – this is one of those changes that on the surface is all “OMG EXPLODEY HORRIBLE,” but in reality won’t affect the average account much.

At the most basic level, your budget needs to be set high enough for a campaign to accrue one click. $5 bids mean you have to have at least a $5 budget to generate at least one click (caveat – don’t set it up this way). Usually, it winds up being two clicks at slightly more than $5, assuming pacing/run rate all work out, and if it nets to be a big pain they’d credit back.

A few weeks ago Google opened up eCPC to increase bids up to 100% (e.g. double them) to reach the right audience. It works great, even with the change, so we wholly support its use. Say you have that same campaign with a $5 bid and a $5 budget and eCPC turns on, and Google sees a really perfect click with a great personality and a nice car and it wants to double the bid to go after it. Well, it can’t! It handcuffs the tool and relegates you to remnant auctions.

There’s two big problems it could cause, both related to pacing. If Google overruns the first few days of a month, account managers will likely wind up pulling back to avoid overspending. Or, vice versa, we come out of the gate slow and turn up the dials, then Google overspends the last few days of the month with a perceived bigger budget.

The other challenge is with partial month pushes. Academia makes the most sense where they have mid-month application deadlines and push hard at the end. Say they have $15k for the first 15 days of the month – if Google overpaces and doubles every day, the campaign will spend $30k in 15 days (double actual budget), but based on their math it’ll be below the $30.4k budget threshold.”

Melissa Mackey, Gyro

“I would add to the discussion: this makes pacing exponentially challenging for B2B accounts who see large dips in volume on the weekends. We’ve already had trouble with under or over pacing because weekend spend acts unpredictably – this change will make the swings from week to week even wilder.

Even using a bid management solution does not completely solve this issue. We’ve had to play with the budgets we set to compensate for dips on weekends, and now our math is going to be off. Very frustrating and really seems like a money grab on Google’s part.”

David Szetela, FMB Media

“I’m happy about the change. All of my clients require management to a monthly budget target, and don’t care about natural fluctuations in daily spend. This change means increased high-quality traffic is practically guaranteed. What’s not to like?!?”

What’s Next?

Clearly it’s a complicated matter depending on the type of industry you’re running ads for. Some experts are happy about the updates and others are..well…let’s just say not thrilled. We’ll be keeping a close eye on advertiser accounts in the coming weeks to see how the update unfolds in AdWords.

Image Credits

Feature Image: Unsplash/João Silas

All headshots used with permission from each expert featured.