Who Benefits From Google’s Recent Change To AdWords Budgets?

Did you ever have somebody say they did you a favor, but after hearing what that favor was you didn’t know if the favor was really for your good or for theirs?

This recently happened with Google and their new change to how daily budgets are going to work.  Previously, advertisers would set a daily limit on how much they are willing to spend on a campaign (or multiple campaigns if using a shared budget).  By setting a budget, advertisers were assured never to spend any more than 20% over that budget on any given day.  Google gave themselves a little wiggle room in case the clicks for a campaign would come in fast and furious.  Understandable, okay.

However, I was shocked when I logged into my account last week and saw the following message:

Daily Budget Notification

Let me translate from Google speak.  An advertiser’s campaigns will no longer be limited to their daily budget +20% instead Google can charge up to twice as much as what an advertiser agreed that they are willing to spend per day.

In theory, this makes sense because if traffic for a campaign suddenly spikes and if your campaign is converting at a profit you wouldn’t want to have your ads stop showing, right?

Now Google wants their advertisers to be successful, after all those advertisers who are not successful/profitable will probably not continue to use Google to advertise.  However, Google also wants to make as much money as they can from their advertisers in order to grow.  So whose best-interest is the change to AdWords budget really for?

Well, consider these scenarios:

What if there is a spike in traffic that is not converting?


Make Each Click Count - T.O.P. Guide To Success Using Google AdWords

What happens to your ads near the end of the month given your daily budget has doubled on non-converting traffic and thus depleted your monthly budget?


What if you pause an underperforming campaign before the end of the billing cycle?

These 3 scenarios would all negatively affect an advertisers and scenarios that need to be considered when creating your daily budget.

Daily budgets have long been used as a protective net against large spikes in non-converting traffic.  Google has now removed this safety net and Google advertisers need to be fully aware of this fact.

So the question to ask yourself as you review your current budgets are the following:

  1. Always the most important question – are all of your campaigns currently profitable?
  2. Are you using negative keywords to limit your exposure for non-converting keyword searches?
  3. Are you currently managing bids on individual keywords within your campaign? Meaning are you bidding higher for keywords that convert compared with those that convert less frequently.
  4. Are you or is someone else on your marketing team regularly checking your AdWords accounts for both profitability and updating non-converting keywords to your negative keyword list?

If the answer is no to any of the questions above, you may need to consider lowering your budgets. This of course is difficult to do as we approach the holiday season, and I’m not suggesting you cut your budgets in half across your entire account, but profitability is the key to success using Google AdWords and you need to consider the question above when determining how well your account is currently optimized.

After all, you must do what is in your best interest even if a friend of yours says they have just done you a favor:>

Happy Marketing!

Andy Splichal


For blog readers only, I’m currently offering a copy of my book, Make Each Click Count – T.O.P. Guide To Success Using Google Marketing for just $5 with free shipping.  In addition, for a limited time, I am including a complimentary marketing strategy session ($149 value), where I will join you on a screen share/phone call reviewing your AdWords account and answering any questions that you may have on how to make your Google Campaigns more profitable.



Andy Splichal is an online marketing strategist  with more than a decade and a half of experience helping companies increase their online presence and profitable revenues.  Although this blog focuses on driving profitable traffic through Google AdWords, True Online Presence offers additional services for lead generation as well as other proven marketing strategies customized for each client.

Individual Campaign Budgets Vs. Shared Campaign Budgets

Google allows advertisers to create daily budgets for their Campaigns thus limiting the amount of money that can be spent in a day.  This budget can either be determined for an individual Campaign or across multiple Campaigns using shared budgets.  Here we will discuss how advertisers create both individual and shared budgets and when it may be optimal to select one method over the other.

First and foremost, an advertiser’s daily account budget should never be higher than that Make Each Click Countwhich they are willing to spend.  Ideally, an advertiser will always be generating profitable clicks where it wouldn’t make sense to limit the amount of clicks; however, in reality Campaigns are not always created as profitable from inception which is a common example of where tighter budgets are useful.

In addition, budgets protect advertisers from unexpected surges in traffic.  A budget safeguards the amount an advertiser will spend in a day even if the amount of user searches suddenly and dramatically increases.

For example, perhaps an e-commerce advertiser sells a product featured on a national morning show, which creates a sudden increase is searches.  However, maybe those customers who take to the Internet to search for the ‘hot’ product aren’t converting instead they are just looking.  In this example, the advertiser’s budget could save the advertiser considerable costs.  However, if the surge of traffic was converting, the budget could also cost the advertiser profitable sales by restricting ads from running due to budget constraints.  Luckily, budgets are easily changed and optimized similar to most other features in the Google AdWords interface.

Individual Campaign Budgets

An individual daily budget is initially determined while creating a new Campaign along with the Campaign’s default bid and the bid strategy.

Creating Individual Campaign Budgets In Google AdWordsAfter a Campaign has been created, an advertiser can quickly change an individual Campaign’s budget in one of two ways:

The quickest and easiest way is to click on the budget column for the Campaign they wish to change.  A pop up help window will display that allows advertisers to enter their new daily budget and save.

Popup Budget Help Window - Google AdWordsAn individual Campaign budget can also be changed by clicking on the ‘Settings’ tab/’All Settings’ sub-tab and changed similarly to how the budget was initially created.

Google AdWords Settings TabCreating budgets are an essential safeguard to ensure an advertiser never spends more money than they are expecting.  However, what if an advertiser has hundreds or even thousands of Campaigns?  How can they possibly manage and optimize all of those budgets?

Shared Campaign Budgets

Shared daily budgets allow multiple Campaigns to pull from a single budget.  Ideal for advertisers with a large number of Campaigns or for advertisers looking to easily restrict their daily budget across an entire account, shared budgets can be used in numerous effective ways.

In order to create a shared budget, advertisers need to access the ‘Shared Library’ link in the left navigation bar.

Google AdWords Shared LibraryOnce inside the Shared Library, advertisers will need to ‘View’ the Budgets.

Google AdWords View Shared BudgetsThen, to create a new Shared Budget, click on the +BUDGET button. 

Add New Shared Budget In Shared LibraryA help window will then display prompting an advertiser to name the budget, apply it to campaigns (optional) and set the daily budget.

Create New Shared Budget In Google AdWordsMake Each Click CountOnce a new shared budget has been created, advertisers can easily apply it to existing Campaigns or add new Campaigns once created to an
existing shared budget.

In order to add Campaigns to an existing budget, advertisers again have two options.  The first option is to access the ‘Shared Library’ and clicking on the shared budget they wish to apply to a Campaign and then clicking on the ‘Apply to campaigns’ button.

Apply Shared Budget To an AdWords CampaignOnce the ‘Apply to campaigns’ button is pressed, a pop up help window will open allowing advertisers to select which Campaigns they wish to have their budgets replaced with the current shared budget.

Similar to adjusting individual Campaign budgets, in the second method advertisers can add Campaigns to a shared budget by clicking on the ‘Settings’ tab/’All Settings’ sub-tab and selecting ‘Apply a budget from the Shared library’.

Google AdWords Shared Library SettingOnce the ‘Apply a budget from the Shared library’ button is pressed, a help window will open listing available shared budgets and a partial list of what Campaigns are linked to each.

Shared Library Popup WindowTo add one of the shared budgets, an advertiser simply needs to select the radio button next to the shared budget that they wish applied to the Campaign and save.

Summary –

Creating budgets is an essential component to creating and growing a successful AdWords account.   A budget is good when it serves as a safeguard protecting an advertiser’s bank account; however, too low of a budget can be detrimental to an account by restricting conversions by limiting clicks and impressions. Conversely, too high of a budget could actually increase the cost per click if an account is utilizing automated bidding strategies.

It is important for advertisers to realize that creating a budget is NOT a one-time set it and forget it setting.  Finding the optimal budget for each Campaign should be fluid as it is an important factor in optimizing conversions throughout the account. Optimizing a Campaign for budget is similar to optimizing keyword bids in that an advertiser does not want to be too high or too low.  Furthermore, Campaign budgets should be reviewed (based on historical data) and increased or decreased as needed both for individual budgets as well as for shared budgets.

Still need help or looking for someone to bounce ideas off?  I am currently offering free marketing discovery sessions to those interested. Call True Online Presence at 1-888-456-6943 or schedule online.

Happy Marketing!


Andy Splichal is an online marketing strategist  with more than a decade and a half of experience helping companies increase their online presence and profitable revenues.  Although this blog focuses on driving profitable traffic through Google AdWords, True Online Presence offers additional services for lead generation as well as other proven marketing strategies customized for each client.