Well finally, it’s here!
Google recently announced that as of June 1, advertisers will be able to set monthly spend limits at the account level. This is groundbreaking for advertisers managing multiple campaigns while trying to keep to a monthly budget.
So how does this new feature work? Are there any drawbacks you need to know? I’m going to cover all that and more in this post. Read on to learn:
- How the Google Ads monthly spend limit works.
- How it compares to daily budgets.
- How to set up a monthly budget in your account.
- What you need to know to get the most out of this new feature.
This way you can determine whether this new feature is one that you should apply!
What are Google Ads monthly budget limits?
Functioning similarly to lifetime budgets on Facebook, monthly budget limits in Google Ads allow you to layer on an account level monthly spend cap on top of your daily budgets. This is the first time in history we’re truly able to control our spend at the account level!
As mentioned above, this is groundbreaking for advertisers managing multiple campaigns while trying to keep to a monthly budget.
By definition from Google, a monthly spend limit is the “maximum amount you can pay for a campaign over a month.” How it works is it will override your campaign’s daily budget to stop at a certain threshold.
Because this will be set at the account level, if you’re running multiple campaigns, you’ll want to account for all of them when setting your limit. This means that, while monthly spend limits will be a stellar money-saving tool, you won’t want to take advantage of it to the point where you restrict your performance by setting that monthly limit too low.
How Google Ads spend worked before monthly budget limits?
Let’s quickly refresh on what spend on Google Ads looked like prior to this new tool.
Before monthly budget limits, every campaign in Google Ads was required to have a set daily budget. That daily budget guided Google on how much it should spend per day to average out to a projected monthly spend. However, depending on the temperament of the ads auction, daily budgets would ebb and flow—even spending higher than anticipated.
This is because Google is programmed to dynamically adjust your spend for the day based on what’s needed in order for you to perform. For example, if you set a daily budget of $10, you may end up spending $8 one day and $12 the next to average out to a rough $300 for the month.
However, if cost of bids goes up due to external factors like competition, then you can easily go over that daily budget consistently resulting in an overall higher spend for a 30-day period than expected.
Is the monthly spend limit right for you?
In order to implement a monthly spend limit, you’ll need to still have your daily budgets set up. But, if you’re unsure whether a monthly spend limit is the right move just yet, let’s quickly compare how your campaigns would function with or without this feature.
Daily budgets with no monthly account spend limit
Essentially, this works like the campaigns we already have, know, and (in some cases) love. These are the campaigns that are already familiar to us, as they have always required a daily budget without the new monthly spend limit feature.
Aside from already being familiar to us, campaigns that use this model have additional benefits:
- Less restricted: These campaigns are less restricted than campaigns with a monthly spend cap. Google will only be considerate of the daily budget which allows for wiggle room for you to continue growing your reach.
- You can adjust your daily budget at any time (though this applies to monthly spend limits too)
- Unlike the monthly limits, daily budgets are set at the campaign level. So, you can manage spend campaign-by-campaign if one takes priority over the other.
Here are some drawbacks to campaigns using daily budgets but no monthly account spend limit:
- Since daily budgets have the flexibility to go over what they’re set to, it can be harder to keep your spend in control as Google takes reign over your costs.
- While some may prefer to manage budgets campaign-by-campaign, if you have a larger account, it can be hard to keep track of your many different budgets for each.
- Daily budgets that are set too low can be just as limiting as a low monthly spend limit since either of those could cause your campaign to show less, causing a loss of impression share due to budget.
Daily budgets with a monthly account spend limit
Now, take your regular campaigns with just the daily budgets, and tack on an account level monthly spend limit on top of that. This works by having Google’s algorithm use your daily budget for campaign level spend and bids while simultaneously tracking overall account spend to keep to your monthly budget limit.
Using the monthly budget limit, here’s how you can benefit:
- Now you can finally manage how much you’re spending in total on Google Ads!
- Whether you have one or many campaigns, you will never have to pinpoint where spend is bleeding out to stop it.
- In a way, monthly spend limits act as an extra safety measure to ensure you keep costs in a comfortable spot.
- If you were ever wary of using Google’s automated tools like Smart Bidding or Smart Campaigns, the new account level monthly spend limit makes these features more approachable since you know you’ll still have the upper hand when it comes to overall spend.
While the monthly spend cap and daily budget work hand in hand together to optimize, at the end of the day your monthly spend limit will override and stop your campaign from running if you hit your limit. This means that:
- If your spend limit is so low that your campaign hits it halfway through the month, then your ads will stop running for the remainder of the month.
- It may be difficult to manage for larger accounts juggling multiple daily budgets on top of the monthly spend limit.
- You’ll need to set aside time to stay on top of your monthly spend limit as it’s not just a “set it and forget it” type of feature. You’ll want to check on it in relation to your historical spend to ensure it’s not too high or too low.
How to set up a monthly spend limit in Google Ads
Since this is set at the account level, you’ll find that setting up your monthly account spend limit is actually in a different spot than where you’d set your daily budgets. Here’s where to go and what to do:
- In Google Ads, in the top right-hand side of the toolbar, click into Billing
- On the left-hand menu, click into Settings
- Once there, you can select the option to create a Monthly Spend Limit
Are you going to use the Google Ads monthly spend limit?
Since this feature is a new tool to help folks maintain control of their overall advertising costs, then it’s an obvious green light for those who are tight on budget. However, if you’re squeamish about trying this out, keep in mind that you can always adjust it or toggle it back off. So, it’s worth a try for any account regardless of your business needs, but be sure to keep an eye on your performance to see if it works well for your account. If so, happy spending! And, if not, then continue business as usual! #KhabarLive #hydnews