Before launching your first pay-per-click (PPC) campaigns, it’s crucial to determine your monthly budget. Factors like traffic volume, estimated cost per click, local competition, and expected performance all play a role in setting your initial PPC budget. However, once you’ve established this budget, the question arises: how do you effectively manage it within Google Ads?

The answer is more complicated than it seems, and many advertisers struggle to avoid overspending once their campaigns are live. Fortunately, several strategies can help you control your budget within your Google Ads accounts, each with its own pros and cons.

This article will explore five strategies for effective budgeting in Google Ads.

Table of contents

1. Campaign daily budgets
2. Shared Budgets
3. Campaign total budgets
4. Automated budget rules
5. Monthly account spend limits

1. Campaign daily budgets

The default and most common way to manage Google Ads spending is by using a daily budget. When you set up your first campaigns, you probably assigned each one its own daily budget. This approach is also common in platforms like Microsoft Advertising and Facebook Ads.

How campaign daily budgets work in Google Ads

Each Google Ads campaign can have its own budget. Instead of inputting your monthly or annual budget directly, Google asks for a daily spending limit. Divide your monthly budget by 30.4 (the average days in a month) to get this figure. Google ensures you’re not charged more than 30.4 times your daily budget per month.

However, this daily budget isn’t a strict limit. Google might spend up to double your daily budget on a given day! Throughout the month, Google might overspend or underspend on any day based on search traffic fluctuations. While daily spending might vary, it averages out over the month, and Google won’t exceed 30.4 times your daily budget.

For instance, here’s how a $10 daily budget might be spent throughout a month, according to Google.

What are the advantages of using campaign daily budgets in Google Ads?

Most advertisers use daily budgets because they offer flexibility and control. With each campaign having its own adjustable budget, you can modify them based on performance.

What are the disadvantages of using campaign daily Budgets in Google Ads?

Managing total spending can become complex with multiple campaigns, each potentially overspending or underspending. It’s hard to predict your final spending when each campaign might spend anywhere between zero and double its daily budget. As your account expands, this variability makes spending less predictable and budget management more time-consuming. The Google Ads budget report can be helpful in this regard by projecting your potential spending.

Who is campaign daily budgets best for?

Daily budgets are ideal for small businesses with few campaigns that can tolerate minor spending fluctuations. They also suit campaigns with consistently strong performance or those with dedicated budgets.

2. Shared budgets

Google Ads introduced shared budgets to simplify managing multiple campaigns within an account.

How shared budgets work in Google Ads

Instead of separate budgets, multiple campaigns can share a single daily budget. For instance, rather than five campaigns each with a $10 daily budget, create one $50 budget shared by all five. These campaigns then draw from this shared pool, potentially spending different amounts. Shared budgets follow the same rules as daily budgets, potentially overspending or underspending on any given day.

To create a shared budget, go to Tools and Settings in the top right corner of Google Ads. Then select Shared Library > Shared Budgets.

You can then create a new budget and assign it to multiple campaigns. To add campaigns later, simply edit the shared budget.

What are the advantages of using shared budgets in Google Ads?

Shared budgets streamline managing individual budgets as your account grows. They also allocate funds more efficiently between campaigns, as high-volume campaigns can utilize funds from smaller, potentially underspending campaigns.

What are the disadvantages of using shared budgets in Google Ads?

The main drawback is reduced control over individual campaign performance. A $50 shared budget across five campaigns won’t necessarily be split evenly. One campaign might consume $48, leaving others with limited visibility. High-performing but smaller campaigns might be overshadowed by larger ones. Additionally, campaigns with certain automated bidding strategies can’t use shared budgets. Google suggests portfolio bidding strategies for shared budget campaigns to balance their collective goals.

Who is campaign daily budgets best for?

Shared budgets suit advertisers seeking simplicity in managing multiple campaigns, especially those with similar goals and performance expectations. Top-performing campaigns, like branded campaigns, might have excellent ROI even with less spending. Therefore, it’s often wise to keep some campaigns on separate daily budgets even if others use shared budgets.

3. Campaign total budgets

Planning daily budgets can be challenging for short-term campaigns. For certain video campaigns, advertisers can opt for a campaign total budget instead.

How campaign total budgets work in Google Ads

Video campaigns with defined start and end dates can bypass daily budgeting. Instead, they can set a unique campaign total budget within Google Ads, specifying their desired total spend for that period. Google then tries to spend this budget evenly until the campaign ends.

What are the advantages of using campaign total budgets in Google Ads?

Campaign total budgets eliminate the need for daily budget calculations for those video ads. They also give Google more flexibility in adjusting daily spend to ensure the total budget is utilized by the end date, even with fluctuations in performance. Furthermore, with flexible start and end dates, there’s no need to worry about budget allocation within specific monthly periods.

What are the disadvantages of using campaign total budgets in Google Ads?

These budgets are exclusive to video campaigns with start and end dates, meaning evergreen campaigns are ineligible. Once set, a campaign total budget cannot be switched to a daily budget, limiting flexibility for extending campaigns beyond their initial end date.

Who is campaign total budgets best for?

Campaign total budgets are perfect for short-term video campaigns with a fixed budget, like promoting upcoming sales, events, or product launches. They’re ideal for generating hype and brand awareness within a specific timeframe using unique creatives.

Automated budget rules

Automated rules in Google Ads simplify various tasks, including budget management. They allow monitoring, increasing, decreasing, or pausing budgets based on predefined criteria.

How automated budget rules work in Google Ads

Within the “Campaigns” tab, access automated rules through the rightmost “More” icon, then select “create an automated rule.”

This lets you create a rule. Essentially, you’re instructing Google to perform an action on specific campaigns, given a particular condition, at a defined time. While vague, let’s break it down:

• Apply to (required): Choose whether the rule affects all campaigns or a select few.
• Action (required): What do you want Google to do? Options include:
  • Enable campaigns
  • Pause campaigns
  • Adjust budgets
  • Modify labels
  • Send emails
• Conditions (optional):_ What triggers the rule? You can base this on campaign performance, such as spending or current effectiveness.
• Frequency (required):_ How often should Google check these conditions and execute the rule? Without conditions, the action is always performed at the specified time. Options include monthly, weekly, daily, hourly, or a one-time execution.

This logic streamlines budget management. For instance, set an alert and pause campaigns if monthly spending exceeds $5,000. This task, which could keep an account manager up at night, is effortlessly handled by an automated rule. The example rule is shown below:

What are the advantages of using automated budget rules in Google Ads?

While automation in Google Ads is a sensitive topic, automated rules offer immense flexibility, especially for budget management. Use them to receive alerts when approaching budget limits, pause campaigns upon reaching their budget, or adjust budgets based on metrics like conversions or CPA. This helps account managers define automation boundaries, preventing overspending or wasted funds on underperforming campaigns.

What are the disadvantages of using automated budget rules in Google Ads?

While useful, mistakes with automated rules can be disastrous. Always read your rule aloud before saving, even if you’re experienced. Say, “I want you to perform this Action on these campaigns, at this frequency, if this condition is true, using data from this period.” It’s mechanical because it is! Even minor errors can lead to unwanted outcomes. For instance, increasing your budget 10% every hour based on last month’s good CPA is possible but potentially problematic. Additionally, inform everyone managing the account about any active automated rules, especially if responsibility is shared. These regularly executed rules might confuse your team if campaigns start or stop unexpectedly while you’re away.

Who are automated budget rules best for?

These rules benefit advanced users, particularly those with numerous responsibilities or multiple client accounts. Use them as safeguards to prevent overspending and receive timely alerts. Start with simple rules, then gradually explore more advanced features as you gain confidence.

Monthly account spend limits

Google’s latest budget management tool, the monthly account spend limit, was quietly introduced in 2021 and remains underutilized.

How monthly account spend limits work in Google Ads

Advertisers can now set a monthly spend limit across all campaigns, preventing spending beyond that amount each month. Independent of campaign budgets, this limit effectively halts all ads mid-month once reached, resuming on the first of the following month. This cycle continues each month. To set a monthly spend limit, go to Tools and Settings > Billing > Settings. Enable the account spend limit and define your maximum monthly spend.

You can modify or disable this limit anytime, even after reaching it within a given month.

What are the advantages of using monthly account spend limits in Google Ads?

They’re excellent for preventing overspending. Unless you have a very flexible budget, a monthly account spend limit prevents Google from exceeding your intended spend, even with combined campaign budgets.

What are the disadvantages of using monthly account spend limits in Google Ads?

Monthly account limits halt ALL campaigns upon reaching the threshold, even top performers or upcoming ones. This powerful tool requires careful consideration. If your budget allows for continued spending based on performance, set a high limit or consider foregoing this feature.

Who is monthly account spend limits best for?

Most advertisers can benefit from an account spend limit, primarily as a safeguard against exceeding planned budgets. However, it’s not a substitute for proper campaign budget management! You still need to optimize each campaign’s budget for maximum ROI on Google Ads.

Manage your Google Ads budget wisely

While there’s no single “right” way to manage Google Ads budgets, various strategies and tactics can prevent accidental overspending. Here’s a recap:

1. Campaign daily budgets
2. Shared Budgets
3. Campaign total budgets
4. Automated budget rules
5. Monthly account spend limits Choose the best strategies based on your total budget and number of campaigns. Remember that as your account grows, your strategies might need adjustments, so revisit them regularly! (If you’d rather not manage this yourself, we can help! Learn more about our digital marketing solutions.) More: Ready to scale your Google Ads account? Find out–and leverage these expert tips!