• Google Ads spend limits

Google Ads spend limits

One of the challenges of digital marketing is to find a balance between efficient use of advertising budgets and achieving optimal results. The key items that affect the success of ad campaigns are the Google Ads spending limits. These limits determine the maximum amount you are willing to invest in Google Ads campaigns. As such, they have a major impact on achieving your business goals and return on investment. In this article, we’ll take a closer look and define the impact of Google Ads “spend” limits on your funds.

In general, google defines spend limits into 2 categories:

  • daily spend limit
  • monthly spend limit

Daily spending limit

The Google Ads daily spending limit is the maximum amount you are prepared to invest in campaigns in a single day. This limit ensures that your ads are only shown until they reach the specified daily limit. Most campaigns have a daily spending limit set at twice the average daily budget. This means that on some days, your campaign may spend 2 times more than the average amount you invest daily. (It is this fluctuation in price that is therefore reflected in the fluctuation in traffic to your store.)

Monthly spending limit

On the other hand, the monthly spending limit in Google Ads represents the total maximum amount you’re prepared to invest in ad campaigns in a month. This limit is important for long-term planning and cost control. The calculation of the monthly spending budget is obtained by multiplying the set average daily budget by the number of days in the month. (Of course, if you ran campaigns during a calendar month, only the days when the campaigns were active would be taken into account.)

Exceeding the limit

In some situations, the cost of advertising may exceed the spending limits. This means that even if Google stops showing your ad once your daily budget is full, it’s still possible that it will receive a certain number of clicks. This happens only rarely, but it happens nonetheless. However, it is important to say that you never pay anything extra. At the end of the month, the amount you spend on an average day will match your average daily budget.

So how does it work?

The key is understanding the difference in between the amount you are billed and the amount that represents the cost of advertising. The cost per ad amount includes the cost of all the impressions and clicks that you have achieved within the campaign. The invoiced amount represents the amount you have to pay.

Example:

Let’s say your daily advertising budget is 8€. This means that your daily spending limit is 16€ (double the average daily budget: 2 x 8€). However, on one day the campaign gets more clicks and exceeds your limit by 1€, so it is 17€.

  • The amount of 17€ represents the total cost of advertising for one particular day.
  • The amount of 16€ represents the price you will be invoiced.

But what about that 1€?…that’s what Google will pay.

This means that the difference between the cost of the ad and the limit you set will be reimbursed by Google itself. Whether it’s a case of daily or monthly spending limits, you NEVER PAY ANYTHING MORE.

Conclusion

Google Ads, by setting “spend” limits, ensures that you achieve optimal campaign results given your financial spend in advertising. However, you should never forget the importance of regularly analysing and adjusting these limits in line with the evolution of your campaigns to maintain the success of your digital marketing activities.

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