If you work in digital marketing, and search engine marketing in particular, you’ve already heard about the 2x AdWords budget change, which was announced - and simultaneously launched - on October 4, with no ability to opt-out.
You may also have had a less-than-favorable reaction to the 2x AdWords budget change, much like many top paid search professionals and influencers.
So what does the 2x AdWords budget change mean for SEM professionals like you? And how can you survive the change, adapt your digital marketing strategies to it, and have yourself, and your campaign budgets, come out on the other side in one piece?
The 2x AdWords Budget Change - Executive Summary
Here are the key points of the 2x AdWords budget change:
Key Point 1: The spending cap increase for shorter-term campaigns
The cap on your daily AdWords budget has been increased from a maximum 20% additional overage fee to an additional 100% - that’s a maximum of double your daily SEM budget. So, on days with unexpectedly high traffic spikes, your ads will be served more frequently than they previously were, up to and including double your normal daily budget.
Key Point 2: This applies differently to uncapped-budget campaigns, or to 30+ day campaigns, (with one exception):
However, the expanded 2x budget cap applies differently to campaigns with uncapped budgets with extremely high spending limits, according to Google. You can still hit the 2x cap, but these longer-dated campaigns will have a budget cap equal to your daily budget x 30.4, and will not exceed this amount. Any overage beyond this will be refunded by Google at the end of the month. There’s one exception to this...
Key Point 3: Making changes to your 30+ day campaigns will change your overall budget, but still not cause you to immediately hit the 2x cap
It should be noted that making updates to such campaigns, such as changing dates, budgets or time zones will change your campaign's budget level - the maximum budget will then be set to your new daily budget multiplied by however many days remain in your [originally] 30+ day campaign.
Who’s Most Affected Here?
If you run short-term campaigns that run for less than 30 days, particularly short-term flash sales during high-traffic periods for those on in retail and e-commerce (such as Black Friday, Cyber Monday or throughout Cyber Week), you may be most at risk of a budget overrun as a result of the 2x AdWords budget change.
This is because those unexpectedly high traffic spikes could serve your ads far more frequently than they have in the past, costing you up to double your daily budget limit.
Adapt to the 2x AdWords budget change with these 7 tips.
7 Ways to Adapt to the 2x AdWords Budget Change Today
1. Keep a Close Eye on Budget:
Google claims that SEM budgets will be evenly paced over the length of campaigns, but it’s still a good idea to keep a close eye on your spend and make adjustments as needed. There’s a significant opportunity cost involved if, for instance, all the budget of your multi-week campaign gets exhausted by Week 1. As far as Google is concerned, this is a success - you got the clicks you needed, and much faster than usual...but if your ads go dark in Week 2 or Week 3, all the potential customers you might have engaged in that time period will never even see your ads.
2. Accelerated vs standard delivery:
If you’re concerned about spreading your budget over time, consider adjusting your delivery settings to standard versus accelerated. This will make sure your budgets don’t run out too early in the day.
3. Plan in advance, and consider throttling, budgets for short-term campaigns:
For campaigns you know will run less than 30 days, consider estimating your total budget and reduce the entire budget slightly, at least for the first few days.Keep a close eye on spend and increase if needed. For extremely high-traffic periods, consider throttling spend in advance - a daily budget set at 50% of your normal amount will, at worst, end up at 100% of (equal to) your total daily budget.
4. Review and use bid modifiers:
Review how your campaigns perform at different times of the day, through the week, as well as by devices and locations. Use bid modifiers where possible to zero in on when and where you see the highest traffic patterns and the most budget deployed.
5. Reminder: Your account now defaults to “Optimize: Prefer Best Performing Ads”:
Just a reminder: as part of AdWords’ ongoing changes, the default setting on your AdWords campaigns is now set to “Optimize” rather than “Rotate Evenly.” While Google’s official line is that this default setting using its advanced technology to dynamically emphasize your best-performing ad units, keep in mind that this setting is effectively set to maximize clicks. And this may eat into your budget. Keep an eye on your settings and watch your spend closely.
6. Try to get your daily budgets closer in line to monthly budgets:
According to Google, it isn’t likely that extremely high daily budgets will hit their limits - some advertisers (possibly including yourself) purposely set overly high budgets to counter any traffic spikes, specifically to avoid unintentionally going dark after budgets get exhausted. However, if underdelivery happens in the first half of the month, AdWords may overdeliver a bit more aggressively in the second half to meet your monthly budget target. Keep an eye on your spend and reduce budgets if needed.
7. Review your CPCs and CPAs:
Make sure your CPCs and CPAs are efficient to your business. It may not make sense to purposely set excessively high CPCs to outbid your competition, especially during high-traffic periods.
While this is definitely new territory for SEM, the best advice we can give in the near term is to watch your budgets carefully and be prepared. As mentioned, Google has stated that campaigns that run for a month or longer that his the 2x cap will have overage charges refunded - it’s those shorter-term campaigns that may be a real risk.
While there are tactical steps you can take to address the 2x AdWords budget change in the short term, in the long term, the best way to deal with this issue is to be more strategic about your budget. Planning ahead for potential high-traffic periods will help you avoid costly traffic spikes.
About the Author
Sohna Ravindran is QuanticMind's Search Account Manager. A digital marketing veteran, Sohna has worked on the agency side, as well as in-house at Google as a senior account manager. She's part of the QuanticMind's professional services team, leading day-to-day management for customers while providing strategic recommendations for future performance.More Content by Sohna Ravindran