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Google Ads Monthly Budget: T-Time With Tillison

Google Ads Monthly Budget: T-Time With Tillison

Until now you have only been able to set daily budgets on Google Ads. Now Google has decided to mix it up a little and introduce a monthly budget option. This is great for those of us who budget our spending monthly and have longer running campaigns. While you could always do this on a daily budget it does eliminate the need to re-calculate a daily spend per campaign and gives you a little more clarity on the overall amount you wish to spend on a campaign.

In this edition of T-Time With Tillison we are looking at:

  • Where to find the Google Ads monthly budget setting
  • What happens if there are fewer or a greater number of days in a month?
  • What happens if you double your budget part-way through a month?
  • Can it overspend, as the daily budget does?

How do you set up a monthly budget?

While the process is almost identical to the daily budgeting option before. We have still included a step by step below for you in case you needed a refresher. 

  • Step 1 – Open your Google Ads account
  • Step 2 – Open up one of your campaigns
  • Step 3 – Settings: On the right-hand side menu bar
  • Step 4 – Click on budget
  • Step 5 – Change ‘Average Daily’ to ‘Monthly’

That’s it. Google recommends using a monthly budget ‘if you have a target spending goal for each month‘. But in our view, it is really just up to you and what you prefer. 

How will a monthly budget differ from a daily budget?

Currently monthly budget will only work for users running Google Search campaigns and not for Google Shopping campaigns. This appears to be down to the fact that monthly spending option is still in Beta. However, that being said, there is evidence to show that this will eventually be rolled out to cover Shopping too. Good news for those running a Google Shopping campaign who want a monthly spend budget but for you may have to be patient for the time being.  

We have had some concerns or unanswered queries with exactly how the new monthly feature will work. Currently, with a daily budget Google will both overspend and underspend each day from time to time. It ultimately tries to average out its daily spending to meet your budget and what this means is:

Day 1 – Google could spend £100 of the budget (whole amount)

Day 2 – Google may spend £150 of the budget (overspend)

Day 3 – Google may spend £50 of the budget (underspend)

While these figures aren’t exact and yours will vary down to the penny, Google will try its best to balance your budgetary needs against ad costs and thus run by an average daily spend than an exact amount before cutting off the ad.

How exactly will this approach work on a monthly budget?

We asked Google 3 questions to try and settle these concerns for you  

Question 1:

If we set a budget of £3,000 per month, does it divide the budget equally between the number of days in that month?

For example: If February has 28 days does it get more budget spent per day than July would which has 31 Days? (average spend for Feb £107.14 compared to July’s average spend of £96.77)

Google’s answer:

‘Campaigns on a monthly budget will try to spend the amount divided by the number of days in the calendar month.’

So in short, yes, February will get a larger daily budget than July. Following this rule, Google says that the monthly spend should, as a result, be the same regardless of it being a short or long month. 

Question 2:

What happens if you double your monthly budget from £3,000 to £6,000 on day 15 of a 30 day month?

For example: First 15 days of a month has an average spend of £100/day. Would the next 15 days have an average spend of £200/day (double the original budget) or would it factor in the new higher budget as well as the shorter number of days and ensure that the budget is spent by the month-end (Increasing to approximately £300/day). 

Google’s answer:

‘If the spend for the calendar month is less than the monthly budget set, the difference will not be carried over to the next month.’

In case you were wondering why the answer didn’t make much sense that’s because it doesn’t answer the question which we asked. Because Google hasn’t given a straight answer, we have been left to theorise just exactly how this may work for you.

Given the way daily budgets work, that being, if you increase your budget then Google will look at the new budget set and try and spend it, we expect the new system to work exactly the same. So looking back at our example of doubling the budget from £3,000 to £6,000 in the middle of the month, it will likely see the remaining unspent balance and spend it by the end of the month. This isn’t a problem if you don’t plan on amending the budget but say for example you make the change with 2-3 days to go in anticipation for your desired spending next month. Google will see this new figure and try and spend it for the remainder of the current month. If you aren’t planning and working to monthly cycles this could result in a costly mistake.  

Question 3:

Currently the daily spend can be higher or lower than the set budget. Is this going to work the same way? If there is an overspend in month one, then can the system correct that in month two? If this is correct then by how much can it overspend?

Google’s answer:

‘If spend for the calendar month exceeds the monthly budget, and you have had no changes to that budget then the advertiser will not be charged for any spend exceeding that monthly budget amount.’

They gave us the same answer again to our previous question. What this means is if you have a consistent budget for the month and don’t touch it (ie £3,000 budget but Google spends £3,300 in the month) then Google will reimburse you the £300 overspend. Which is great if they do overspend but if you are dealing with larger budgets the overspend may be costly, even if you do get it back in the following month’s campaign. 

Looking at the new monthly spend option, it’s hard to see anything which will make substantially better than before. Our conclusion is that if you are planning budgets monthly and won’t be inclined to edit the budget mid-campaign than the monthly option will be a little simpler to manage. Otherwise sticking to the daily budget will work just fine for everybody else. You may be spending the same amount in the long run but like anything, it always seems an easier pill to swallow in small amounts.

If you have had any experience with the new monthly budgeting please let us know how you are getting on with it. Are you seeing this in shopping campaigns yet? If so we’d love to hear from you and how well it’s working. 

As always, remember to subscribe to our YouTube channel so you never a miss future T-Time With Tillison episode, and if you need help or advice on Google Ads you can get in touch with our specialists who are ready to help.

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