The AdWords daily budget is calculated by Google over a month-long billing cycle, based on 30.4 days. Due to the daily fluctuations in traffic and online searches Google has changed the way that the budget can be spent, starting from last month. Campaigns can now spend up to twice the average daily budget to help try and reach advertising goals, such as a target amount of clicks and conversions.
This so called ‘overdelivery’ will be balanced out by Google over that 30.4 day calculation period. It states that it won’t charge more than the calculated monthly spending limit, but if it does then it’ll credit the extra amount. To elaborate further on that process, 30.4 is the average number of days in a month (365 days in a year / 12 months = 30.417) so Google multiplies an advetiser’s daily budget by this number so it knows what the budget should be over the course of a month.
For example, if the daily budget is set at $5, over the course of the month the daily charges will vary. Some days the charge would be $2, on others $10. But at the end of the month, the charges wouldn’t exceed $152 (which is 30.4 multiplied by the $5 budget). So even though campaign costs rose above and fell below the $5 budget from day to day, at the end of the month the charge should still be no more than the calculated monthly budget.
If Google does deliver over the monthly budget it’s possible to check if overdelivery credits have been processed, by following these steps:
1. Sign in to the (new version) AdWords account.
2. Click the reporting icon in the upper right corner of your account.
3. Select Predefined, then Basic from the drop-down menu.
4. Click Overdelivery.
5. To calculate overdelivery, subtract ‘Billed cost’ from ‘Served cost’.
This change by Google should help businesses that tend to have large fluctuations in traffic during various periods during a month by ensuring that the quota of clicks for the available monthly budget will be reached and there will be the maximum amount of traffic going to the site.
If you want to know more about how this ‘overdelivery’ could benefit your business, contact us now for more details.