Why Google Ads Can Spend Over Your Daily Campaign Budget Limit
It can be quite confusing when Google Ads spends over your daily budget you’ve set for a campaign. Often times we see Google spend up to 20% over the daily allotted budget for a campaign, and Google’s own documentation states that a campaign can spend over twice your daily campaign budget. We’ve come to accept over-spending daily budget targets as normal behavior from Google Ads, but why does this happen?
Google Wants To Maximize ROI On Ads On Better Days
Google will show your ads more often on higher Search traffic days as a way to maximize your return on investment (ROI). This can cause your campaigns to spend more than twice your daily budget on any given day, if your campaign is on an automated bid setting for conversions e.g. Target CPA, Target ROAS, or Maximize Conversions (you can learn more about these bid strategies here). This sounds like a reckless way for Google Ads to spend your campaign budget, though in reality this is part of a way for Google to spend more of your budget during higher traffic times while staying within a close range of your total monthly budget.
Assuming you are planning to run your campaign at its daily budget on a monthly basis, Google Ads will not spend more than your average daily budget multiplied by the average number of days in the month (about 30.4).
Keep in mind that this spend pattern may be more pronounced on certain days of the week/month when you may expect to see higher traffic for your ads.
Google Ads Limits Your Monthly Spend
If you keep your campaign daily budgets consistent for the entire month, Google will not charge you more than your average daily budget multiplied by the average number of days in a month (365 days per year / 12 months = 30.4). If your campaign spends beyond this amount, Google will credit your invoice for the overage as an overdelivery credit.
For example, if your daily average budget was kept at $5/day throughout the month and your campaign spent $160 by the end of the month, your maximum spend limit is $5 x 30.4 = $152. Google will deduct $8 from your invoice for the month as an overdelivery credit. You can find more information on these spend mechanisms here.
If you do make changes to your budget in the middle of the month, Google will calculate your monthly maximum spend as the amount spent so far plus your new daily average budget, multiplied by the remaining number of days in the month.
For example, let’s say in March you have a daily average budget of $10 and by March 25th you’ve spent $200. On the 26th you change your daily average budget to $20. Your new maximum spend limit is $200 + ($20 x 6 days remaining) = $320.
Google Ads Ultimately Wants You To Spend
Now that you have a better understanding of why Google Ads will allow your campaign to spend beyond your daily allotted budget, you also understand that Google has a strategy of helping you stay within reasonable budget limits for the month.
If you plan to run a campaign for a least a month, you may not need to worry about Google spending significantly more than your total budget for the month. However, if you plan to run a campaign for less than a month, you will need to monitor your campaign spend closely to ensure that you will have sufficient budget remaining for the duration of the campaign.
