Google has this morning announced changes to their Ads Scheduling budget pacing. At first it looks like little has changed. But look closer and you’ll find that without a tight leash on your budget, it would be easy for Google to sneakily spend more of your hard earned cash. Let’s take a closer look at what Google is saying, and what it means for you.
Many PPC advertisers will have seen this beauty land in their inbox this morning:
Changes to Google Ads budget pacing for Ad Scheduling – Google Ads Help
In a nutshell, let’s say you set a daily budget on a campaign that is only live on certain days of the month. Rather than trying to aim for the given daily budget on the days that it’s live, it will instead aim for an actual daily budget that it would have achieved if the given daily budget had been extrapolated out for a month, then squeezed into the days of the month the campaign is live.
On the surface this may seem innocuous enough, it’s wrapped up as a positive, to make budgeting more ‘predictable’ in Google’s words. However, it really does everything but that.
In one sense, Google is right to address what seems like a grey area that’s existed within the system. They state that:
“The monthly spending limit has always been 30.4 times your average daily budget.”
But also imply that historically it has aimed for spending the given daily budget on a given day, as this is now changing as stated:
“Google’s pacing system will now attempt to spend up to this amount regardless of ad scheduling usage.”
So it’s absolutely fair enough to try to reconcile these two mechanisms, which are seemingly at odds with another (though of course can logically co-exist). One is giving a monthly limit of 30.4x the daily budget, while the other is aiming for a monthly spend of the daily budget multiplied by the number of days live.
There’s two ways this could have been aligned, and of course Google has chosen the one which will make it more money.
In Google’s own example, it gives the following:
“Situation: Let’s consider a campaign with a daily budget of $100. It is active for only 20 days out of a calendar month.
Historical behaviour: A campaign with a daily budget of $100, scheduled to run 20 days out of the month using an ad schedule, would pace towards spending $100 x 20 in a calendar month.
New behaviour: That same campaign would pace to spend $100 x 30.4 in a calendar month.”
It stops short of giving the full implication. Which is that in this situation, if you set your daily spend to $100, you’d effectively be actually setting a daily spend of $152.
A 52% increase.
This is because your monthly spend would be set to $100 x 30.4 = $3040, then spread out over 20 days, so $3040 / 20 = $152.
The thing is though, this isn’t how people intuitively think, is it? A daily budget should be just that, a daily budget.
Let’s imagine that you’ve got a short burst campaign, that’s only going to be live for 10 days, and you want to spend £1000 on it. Before, that was a pretty easy calculation, you’d set your daily budget to be £100. Easy, right?
Now you need to factor in both of Google’s limits, and its new aim to figure out what your daily budget should be.
So, the limits are still:
- Daily spending limit: you won’t be charged more than twice your average daily budget on any given day
- Monthly spending limit: you won’t be charged more than 30.4 times your average daily budget in a month
But it’s going to try to spend 30.4 / 10 = 3.04x more than whatever you enter. Which also means it will butt heads with the daily spending limit of no more than 2x first.
So you’re going to have to put in a daily budget of £50, knowing that it’s going to aim to spend 3.04x that, but be limited after it reaches 2x.
That’s not intuitive, that’s a trap. If you set your daily budget at £100, you’ll end up spending double your intended overall budget.
If it’s helpful, your new daily budgets (after 1st June) should be as follows:
New daily budget = MAX(0.5 , Number of days live / 30.4) x Old daily budget
In Google’s example above with someone with a $100 daily budget, they’ll need to bring that down to $65.78 to not see a massive spike.
It shouldn’t need to be this difficult. But the only thing that’s becoming more ‘predictable’ is Google’s penchant for money grabbing. They’ll happily lean into obfuscation and misdirection to do so.
Don’t get caught out, and don’t be evil. Dark Horse vow to always put clients’ profits before Google’s.