Overdelivery: Recent Changes to AdWords’ Budget Handling

On the 4th of October 2017, Google made a change to the way their online advertising service, AdWords, handles budgets set by advertisers. Ad campaigns could previously overdeliver by 120%, but they may now overdeliver by up to double the daily budget. This caused a certain amount of concern among advertisers who were concerned about loss of control in how their budgets are spent. Now that this change has had almost a month to bed in, we can look at the possible implications of overdelivery vs the real result.

 

How Overdelivery affects advertisers

Overdelivery aims to allow the flexibility to use more money on days with high quality traffic that results in more opportunity for ads to receive clicks. This is balanced by a lower spend on quieter days.

Google assures advertisers that they will never spend over the monthly charging limit. This calculated as the average number of days in a month (30.4) multiplied by the daily budget, and cannot be set manually. If they do overspend, advertisers will be credited for overdelivery at the end of the month. This works well for campaigns which run continuously where the daily budgets are set appropriately.

However, advertisers tend to be working to a weekly or monthly overall budget and manage their campaigns by monitoring and pausing them to prevent overspending. For these advertisers, the monthly charging limit does not apply, and there is the real possibility of spending double their budget every single day the campaign is running. As a result of this, an advertiser may use up all of their budget towards the start of the campaign and have nothing left for the end.

 

How things look so far

Looking at data from campaigns managed by Moore-Wilson’s Digital Marketing team, some of which are continuously running, some managed by automated rules, and others managed manually, none of them appear to have been impacted too heavily by this change. Certainly, none of the campaigns have spent double their budget for the month! Continuously running campaigns have worked as Google said they would; high traffic, high spend days are balanced by low traffic, low spend days. Managed campaigns have seen a few high spend days, but rules or manual management have prevented overspending.

However, campaigns which are budgeted for on a weekly basis do appear to be looking at a higher spend towards the start of the week than previously. The result of this is that campaigns which were running 4 or 5 days a week prior to the overdelivery change are now only running for 2 or 3 days max.

Theoretically the higher delivery of ads on fewer days should balance out with lower exposure over more days, but whether this has any further impact on the effectiveness of an ad campaign remains to be seen.

 

By Teresa Nunn, SEO Consultant