The virtue of taking this small step is that your spending stays controlled, and you will never find yourself overspending. Explore this detailed case study on PPC campaign success for valuable insights.
Why is this so important? Well, in 2023, $ 10,000 was spent on ads by every business on average, but not everything was planned as it should have been. It also limits the amount of money that you spend, and therefore, every single dollar is well provided for. Easy to say, and I am going to explain how this small action will help you save your money in the future.
Google Ads Budgeting
What is an Average Daily Budget?
The Average Daily Budget is a basic setting in Google Ads and defines the daily spending rate based on the bid strategy. As an addition, when you set this, Google determines how much you can spend per month and multiplies that by 30.4, which, as we know, represents the average number of days within a particular month. For instance, $10 per day means $304 for the whole month.
How Does the Monthly Spending Limit Work?
Even though Google Ads does not allow you to input a fixed monthly budget, the system will guarantee that you will not be spending more than your daily budget multiplied by 30.4. If you want to have a budget of $500, then you divide the amount by 30.4, and then you will have a daily budget of about $16.45.
Why is This Calculation Important?
Knowing these numbers is useful in order not to find yourself in this situation. If you adopted the $20 daily spending limit your monthly spending can go as high as $608. And, if we perform these calculations we can change budgets with our business planning in mind. See how content marketing helped a local business achieve success.
Steps to Set a Monthly Spending Limit
Access Your Google Ads Account
First and foremost, open up Google Ads and enter your account details to sign in. Once you have logged into the system, you will see the campaign dashboard which provides you the entire picture of every campaign.
This should be considered as your HQ. Fun fact: Google Ads performs over 3.5 billion searches daily, and this means that advertisers should be keen with their budget to achieve the best results.
Navigate to the Billing Section
Once inside, find a space on the top-right corner of the dashboard. Here, you will see a 'Tools & Settings' icon – that 'looks like a wrench.' Go into it, and in the 'Billing' tab, choose 'Billing Options.' This section is run like your financial command center – all things concerning payments and limits are arranged here. They make sure that all your billing and spending details are under one roof to ease control.
Configure the Monthly Spending Limit
This area is where the real work begins! Check out for Account spending limit. This is where you tell your budgeting system the maximum amount of money you can spend for the month.
For instance, if the amount that you spend on your daily needs is $10. To capture average monthly spending, Google uses the average number of days in a month, which is 30.4 days. So, $10 × 30.4 = $304. That's your maximum spending allowance for the month.
Type this value in or any other amount you need, and then press "Save." By so doing, this cap ensures that your hard-earned cash isn't used up on the utilization of extra campaigns beyond the overall amount you have set, even if some days achieve outstanding performance beyond what you could afford to spend on a particular day. Master the essentials of creating a winning B2B SEO campaign for your business growth.
Advantages of Setting a Monthly Spending Limit
In Google Ads, you get to choose to set a daily budget for your campaign, and by so doing, it helps you to more greatly control how much you spend per month. It also avoids the common pitfall of going over budget, something that is especially crucial if you are working toward specific financial targets.
Enhanced Budget Control
The greatest benefit of establishing a monthly spend is the fact information and control over advertising costs lie solely in your hands. If you set your limit depending on what you are willing to spend in a month at $500, you will not spend a dime more. This helps you to ensure that your campaigns are within your budget.
Predictable Expenditures
It can be noted that setting limits for particular spending at the monthly level means receiving no shocks at the end of the month. That way, you will make sure that you don't go overboard and the $500 you spend every month is manageable. This stability helps in working out the finances of the business, and this eradicates issues with budgets.
Flexibility to Adjust
Related to the above advantage is the fact that the spending limit can be redesigned depending on the needs of the business. If you discover that the campaign is doing well, you can extend the limit or reduce it if you have to cut down. Because of this flexibility, you always have the discretion of how much you want to spend.
Disadvantages to Consider
Although deciding to use a monthly budget in Google ads has its many perks, it has its cons too and here I've learned a few of them from the roosters. Here are some tips that will help to make a final decision on the spending limit for your advertising campaign:
Potential Ad Pauses
That is why it is recommended to set it at a monthly level – your ads may stop as soon as the limit is exceeded. Google Ads put a stop to your campaigns until the following billing cycle commences.
If your ad is doing well, you might be missing critical opportunities out there. For instance, if you set the daily budget at $500, it means once the limit is reached, your ads are stopped until the new month, greatly reducing your chance of being noticed or even making a sale.
Limited Reach
If you put a tight budget, your ads will not reach as many people as you'd like them to. This can be especially true with such competitive keywords because to stand your ground, you will need more money to bid with.
For example, let's have a CPC of $2.50 and suppose that you need to allocate $200 for the entire month. It is sometimes possible to capture only about 80 clicks, which is a relatively small outreach and interaction.
Complexity with Multiple Campaigns
When one is operating under one account and is in the process of creating many campaigns, it becomes quite a bit of work to try and set different spending quantities for each.
For instance, if you are running campaigns for $100/month for a particular product and $300/month for other product(s), then it isn't easy to be sure that the necessary sum for each of the campaigns will not be overthrown by other campaigns. I suggested shared budgets and even those need to be checked constantly to ensure that they are not abused. Learn how many keywords you should use for SEO to optimize your strategy.
Best Practices for Budget Management
Regular Monitoring
One of the practices that I have been carrying out is the frequency with which I check my Google ads campaigns, preferably once a week. This assists me in preventing over-expenditure early enough and then altering my plans to fit the circumstances. According to research, those who analyze their campaign tend to adhere to the set budget by way of exclusion by 20% than those who do not engage in the practice.
Adjust Budgets Based on Performance
Nonetheless, what I have learned indicates that it requires reallocation of funds according to the performances of the campaigns. For instance, while the metrics show that one campaign is 30% more effective than the rest, I would allocate the majority of the budget to it. This dynamic approach can enable organizations to realize an additional ROI of up to 25%.
Utilize Shared Budgets
Shared budgets make a lot of sense when I handle more than one campaign. It will help me distribute the money in the campaigns without being limited by the campaign limits. When there are two separate budgets for the campaigns and the money I have to spend every month, the choice is made clear, with only the most important campaigns gaining further investment. Discover the key benefits of digital marketing to grow your business effectively.
Final Words
First of all, adjusting campaigns by a monthly budget limit in Google Ads is effective in preventing them from getting out of hand. Hence, having a limit, I can control my expenditures and not incur hefty bills that are not necessary.
In any case, it is always possible to make necessary budget changes, thus keeping my campaigns on track with my business objectives. This way, I can derive the maximum from the ad budget to get maximum target traffic.