PPC

Why Google Ads Isn’t Reaching Your Full Daily Budget

Written by James Parsons on January 28th, 2020 in PPC

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Google Ad Illustration

Any time you’re running a PPC campaign, your budget is going to be on the forefront of your mind. Are you spending too much money? Are you spending your money poorly? Are you managing your budget in a way that maximizes your potential new conversions? There’s a lot to keep in mind!

It doesn’t help that we all tend to think of PPC networks as inherently predatory. You give them $100 and they’ll take that $100, and if you’re making a mistake that makes spending that $100 worthless, well, that’s not their problem.

The fact is, some PPC networks aren’t quite that predatory. In fact, there are times where you might log in one day and find, much to your confusion, that your ads aren’t even spending the full budget you’ve given them.

Imagine that you gave Google Ads a budget of $100 per day, and you set up some targeting and some ad copy and let them run. You check a few days later, and find that your ad spend looks odd. One day you only spent $85, the next day you spent $92, and the day after that you only spent $69. You gave Google the ability to charge you $100 a day, and they aren’t taking it. So what gives?

There are a few different reasons why Google Ads might not be spending your full budget each day. Most of them are signs that something isn’t quite right with your campaign, so they’re issues you should identify and fix as soon as possible so you can get the most out of your advertising campaigns. Let’s dig in!

Google’s Budget Flexibility

The first thing you should check, when you’re noticing that you’re not spending the full amount in your daily budget, is this: how long has it been going on for?

See, Google, much like Facebook, has some level of flexibility in the way they spend your budget. They implemented this back in 2017 as a way to help optimize your ad campaigns on a day to day basis, without you needing to monitor and adjust your budgets on a daily or hourly basis yourself.

Google Ads Can Overspend

Here’s how it works. When you set a daily budget, Google extrapolates that to a monthly budget. So if you say “I’ll spend $100 per day”, Google says to themselves “alright, we have $3,000 this month to work with.”

In general, they will try to stick to your daily budget. This sets the baseline for what you’re getting out of your advertising.

However, what happens if one day – such as a day before a holiday where you have sales going on – demand for your search query suddenly increases? If you’re on the ball as a marketer, you might know this is coming ahead of time, and you can log in on the morning of that day and increase your daily budget. If you don’t know about the spike, or if it’s not related to anything you can predict, you end up missing that opportunity.

Rather than allow you to waste that opportunity and feel bad about it, Google decided to add some flexibility to their daily budget calculations. Specifically, they add a new cap: they can spend up to 2x your daily budget in a single day.

“What? Doesn’t that mean, if five days have extra demand this month, I could end up spending $3,500 out of my $3,000 budget for the month?”

Well, no. Google averages it out. They guarantee that, as long as you don’t dramatically adjust your budget mid-flow, they will average out your daily spending to equal $3,000 for the month.

Automatic Payments and Billing

What this means is that sometimes your daily spending will cut off early. If they spend 2x your daily budget one day, they have to under-spend a corresponding amount other days so the average comes back down.

This is why I say that you need to look at the broader context of your under-spending. If you’ve noticed Google isn’t spending your entire daily budget the last few days, take a look and see if, a few days prior to that, they over-spent. It’s possible that what you’re seeing is the short-term compensation for a previous over-spending incident where Google capitalized on a good day for you, and is dialing back on bad days to stick within your budget.

Your Bids are Too Low

One of the key calculations when running PPC advertising is your cost per action. Whether you’re paying per conversion, per lead, or per hit, you’re paying for some discrete action. With Google ads, the cost and amount of that action you get depends on your bid in the ad auction.

Most PPC networks run on an ad auction system. You set a bid, which is the maximum amount you are willing to pay for that action. Other people bidding for the same keywords and ad position compete with you for that space. If you bid $1 per action and someone else bids $2, that someone else pays $1.01 and gets the top spot, and you get the second spot for $1. If no one else bids higher than you, you pay a smidge over the second highest bid.

Adjusting Bid Strategy

This can lead to issues with some keywords with a lot of competition. If there are five open spaces in the ad display, and there are 10 people bidding for a spot, five of those people are going to be out-bid and won’t be able to get a place for their ads.

This is a simplification, of course. Due to daily budgets, more than five people can get space in those five spots. Likewise, due to dayparting and other factors, more space is open than it seems like there should be.

Still, sometimes, if your bid is too low, you’re going to have a low amount of exposure. You might not get any exposure, or you might only get the dregs once other budgets are exhausted. This might not be enough exposure to spend through your daily budget.

Increasing your bid can get you better – and more – positioning in the ad displays, but it’s not without risk. The higher your bid, the less room you have to make a profit from the actions you get. If you end up spending too much per action, you may no longer be able to make a profit.

Your Ad Rank is Low

Google assigns an ad rank to every ad on their platform. This rank is a pretty complex calculation, but it results in a numerical value attached to your ad. This value determines your ad position. The top spot is an ad rank 1, the second spot is ad rank 2, and so on.

Ad rank is determined by a calculation involving factors like your bid amount, your expected click-through rate, your ad relevance, your landing page experience, and even the competition in the ad auction at the time the ad is being calculated.

Quality Score Ad Relevance

What’s more complicated is that the number is always changing. Every single time a user searches for your keyword and your ad is eligible to appear, Google makes this calculation to determine if your ad will show up.

Ad rank is a complex enough topic that I actually covered it in detail in another post. You can find that post here: Why Your New Google Ads Have a Low Ad Rank.

Additionally, to check to see if this is your problem, you will need to check into your impression share data. Google provides this data in your Google Ads account, but you need to know where to look.

  1. Sign into your Ads account.
  2. Click on Campaign, Ad Groups, Product Groups, or Keywords, to choose a category.
  3. Click on the columns button and click to modify your columns.
  4. Click on competitive metrics, and choose impression share columns to display.
  5. Apply and look at your data.

If your impression share is very low or nonexistent, you may have an issue with low ad rank. To figure out why you’re having that issue, read the other article I wrote; it has troubleshooting steps and ideas to tweak your ads to diagnose the problem.

Your Keywords Have Low Volume

Another possible issue that you might run into is that your ads are doing too well. Well, perhaps not too well, but as well as they possibly can.

When we look for keywords to target with ads and content marketing schemes, we tend to follow some old advice where we look for keywords with a particular balance. We look for keywords that have high enough volume to be worth targeting, but low enough competition that we don’t have to pay an arm and a leg to target them.

Google Ads Manager

The problem with this is that sometimes we get it wrong. On the one hand, a keyword might have too much competition, and it means we don’t get the exposure we want, or have to pay more for it. On the other hand, sometimes our keywords have less volume than we thought they did.

Sometimes, if you pick a narrow enough keyword, volume is low enough that you get it all. Yup, just, all of it. You pay for each and every bit of potential traffic coming from that keyword, and you still have money left over.

There are a couple of possible solutions here. You can decrease your daily bid so you’re still capturing everything and not wasting extra money. You can add some keywords to the ad to give you more room to spend that money. Or you can just abandon the keyword and look for something else. It depends on how well that low-volume keyword is working for you, really.

You Don’t Have Enough Keywords Listed

This is pretty similar to the issue above; if you don’t have many keywords listed on your ad, your ad might not have much volume to run each day. Even of those keywords have a moderately high monthly volume, their daily volume might be low enough that you spend enough to capture it all.

Only 4 Keywords

This can be especially true if you’re trying to use exact match keywords rather than, say, phrase matching. I rarely recommend broad matching, since that can capture a ton of irrelevant traffic, but phrase matching gives your ads some flexibility within your keywords that can be very valuable. I recommend reading up on keyword match types.

When in doubt, expand your keyword selection to give your ads more room to breathe. Google wills till optimize for the best conversions among them, so you’ll spend your budget as effectively as possible within the constraints you’ve set.

Your Click-Through Rate is Too Low

Perhaps one of the most common causes for ads to fail to spend their full budget is a low CTR.

With Google Ads, you’re generally going to be focusing on pay-per-action ads, rather than pay-per-impression ads. This means you’re only charged when someone actually clicks on your ad.

CTR Column

Thus, if you’re not spending your full budget, it means you’re not getting enough clicks to eat through that whole budget. If you’re getting plenty of impressions – you can check your impressions in Google Ads easily, as mentioned above – and not many clicks, there’s obviously something going wrong.

There are a few reasons why this might be.

  • There’s a disconnect between your keyword and your ad copy. If a user is searching for running shoes and you’re targeting a shoes-based keyword with dress shoe ad copy, the user isn’t going to be very likely to click your ad no matter how much you’re paying for it.
  • There’s a disconnect between your searcher intent and your offer. If a user is looking for instructions on how to build a chair and you’re offering them the chance to buy a chair fully assembled, they aren’t going to be interested.
  • Your ad copy isn’t sufficiently compelling. This one can be pretty subjective. You have to make your viewers want to click your ads, after all, and there are as many ways to do that as there are ads running today.

Regardless, you can check this by comparing your impression share and your click-through rate. Ideally, your CTR won’t be too low and you can remove this as a concern. Though, improving your CTR is always a good idea regardless, so it wouldn’t be a bad idea to work to improve it anyway.

Your Target Location is Too Narrow

Another possible reason I see occasionally for under-spending ads is a very narrow geographic targeting setup. With Google Ads, you can target specific geographic areas, as broad as a country or as narrow as a sub-section of a city.

Age Targeting

What sometimes happens is that you copy an ad and adjust some aspects of it, in order to avoid having to do all of the work of starting an ad from scratch. What you might miss, though, is that your ad was narrowly targeted to begin with, and you forget to change the geographic limitations on the ad.

You might then wonder why your high volume keyword is giving you nothing, despite your targeting, bidding, and other adjustments. There’s no visible reason why it should be so limited, until you realize that you’re restricting it to a suburb of Oklahoma City or something, and your target audience is actually a whole lot smaller than you thought.

Thankfully, it’s very easy to check this – just look at the location settings in your targeting options – and to fix it.

Your Ad Schedule is Too Short

With Google Ads, you can break down your ad schedule hour by hour throughout the day. You can run ads specifically from, say, 2pm to 4pm and 8pm to 10pm, and no other times, if you so desire.

Ad Schedule

Dayparting can be a very potent strategy. When used properly, you can reserve your ad spend for the peak activity hours for your users. If you know that, between specific hours, you tend to get a higher conversion rate than other times of the day, it makes sense to limit your ads to those hours. That way, more of your ad spend can be spent during those hours.

This ends up having the same problem as the low volume keywords, however. If your ad bid is high enough, your budget is high enough, and your dayparting restrictions are narrow enough, you end up capturing all of the available traffic and can’t possible spend any more. When that happens, the only option left available to you is to expand those hours.

Your Experiences

What about you? I know a lot of you out there have spent a long time running Google ads, and you’ve probably seen just about every problem under the sun.

Have you encountered times where your ads weren’t spending their full daily budget every day? If so, what did you eventually find was the problem? I’d love to learn more, so leave me a comment below.

Written by James Parsons

James Parsons is the founder and CEO of Content Powered, a content creation company. He’s been a content marketer for over 10 years and writes for Forbes, Entrepreneur, Inc, and many other publications on blogging and website strategy.

Comments

Mark Contreras says:

September 17, 2020 at 11:18 am

When do you think I should increase my budget? My ads aren’t using my full budget so I’m not even sure if increasing my budget is going to fix anything. What do you recommend?

Reply

James Parsons says:

September 19, 2020 at 12:41 am

Hey Mark! Increasing your budget won’t help – what I recommend is setting up additional ads with brand new keywords. Cast a wide net, and as long as you have conversion tracking set up, you can let it run for a month or so and trim the fat by removing any keywords that aren’t resulting in conversions, or that fall below your acceptable cost-per-conversion threshold. This will use more of your budget, and you might find some new higher-value keywords in the process!

Reply

Jeremy Robinson says:

September 27, 2020 at 5:49 am

Thanks, that makes a lot of sense. I think I just disabled too many keywords. Maybe I need to test more keywords or run more ad variations.

Reply

James Parsons says:

September 28, 2020 at 6:29 pm

Hey Jeremy!

If you do try new “test” keywords make sure to create a seperate ad group so they don’t get jumbled up into your “good” keywords.
Then you can run those test keywords for a month or two and do and rinse/repeat by removing the worst performers and keeping the ones that yielded good results.

Creating seperate ad variations may not use more of your budget, they will just test those ads to find out which is converting the best and select that copy to use.

Adding more keywords is going to help you reach your full daily budget. You just have to go through that process of giving your keywords enough time to convert, and removing the ones that aren’t converting.

Reply

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