Billing Daily Budget

September 18, 2005

Hi there, I am shortly going to start my campaign, however I have a concern and query over one point. In the Daily Budget section google suggest 3 purposes. I am unsure of the third purpose where it says the following.

“We may charge you more or less than daily budget in a day, but we will never charge you more than your monthly budget (daily budget x days in the month) for any given month.”

The words in brackets I am unceratin on. Does this mean if I have a Daily Budget of £75 and a monthly, campaign spend of £500 why have monthly budget in brackets totalling £75 x 31days which is not our monthly budget as that totals £2250?

This is very confusing!

Thankyou for your time, please advise!

Hi Mikey,

There is no “monthly budget” as such within AdWords, just your daily budget.

On most days, your daily spend will be slightly less than your daily budget. However, occasionally your daily spend might be a little more.

All they’re saying is that over the course of a month, your campaign will not cost you any more than your daily budget times the number of days in the month; regardless of any individual days’ over delivery.

Hope this helps!

* Hey if I follow correctly then I am really worried about this. I JUST DONT FOLLOW! Surely they cant bill me £2250 if I only want to spend £500 on my campaign! Surely I must not be understanding this. Anyone else have any thoughts?

* If your monthly budget is £500 then you must budget £16 per day, not £75.

* Ok so if i go with that £16 and it suggests my daily budget should be £210 how do they derive this figure? also if my daily budget of £16 is less than the cost per day will this just mean my ads wont always be shown? Thanks for your help adwords support taken while to get back and i really want to start this campaign.

* Just want to make sure:

they only change you for your actual clicks, not your max monthly budget, right?

* The suggested daily budget is the amount that you would need to spend to ensure that your ad shows every time somebody searches on your keywords.

An even more detailed way to look at is this:

The suggested daily budget is the amount that the program estimates you would need to spend, to safely allow your ad to show every time someone searched on any keyword – without over-delivering on your budget.

How is the suggested daily budget arrived at? To over-simplify for the sake of the conversation:

* The program estimates the number of impressions that each and every keyword in the campaign will get, which varies according to how it is targeted (broad, phrase, or exact).

* Then it applies a moderate CTR to that number of impressions, to arrive at how many clicks you are likely to accrue.

* Then it looks at your CPC for each keyword to decide how much you might spend for each click, in competition with others.

* Taking into account all the above, the system arrives at an estimate of how much you would need to budget in order to have your ad show every time, for every keyword, without exceeding your budget. This is your suggested budget.

If your actual budget is lower than the suggested budget, your ad will not appear every time. How often will it appear? Well, if your actual budget is $1.00, and your suggested budget is $2.00, then your ad will show about half the time. Delivery will be spaced out over the 24 hour day.

A great tip for lowering your suggested daily budget: reduce the number of keywords in the campaign, by weeding out low performers.

* AdWordsAdvisor Thank you!

It was simple and clear.

I was just wondering on the following if you could elaborate on this

“Then it looks at your CPC for each keyword to decide how much you might spend for each click, in competition with others.”

HOw does the program decide on CPC, is it the current CPC that taken into account or the Maximum CPC kept by competitors.

With Regards
Aravind

* Aravindgp, I’ll see if I can hunt down some more particular information on this, and post again in a few days. Stay tuned.

Author: WebmasterWorld.com