7 Reasons Google Ads Isn't Reaching Your Full Daily Budget
Any time you run a PPC campaign, your budget will be at the forefront of your mind. Are you spending too much money, or are you misspending your budget? Are you managing your budget to maximize your potential new conversions? There's a lot to keep in mind!
It doesn't help that some marketers 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, that's not their problem.
The fact is, PPC networks don't work that way. There are times when 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; the day after, you only paid $69. You gave Google the ability to charge you $100 daily, and they aren't taking it. So what gives?
Let's dig in!
Quick Update (2023)
In early 2022, Google Ads introduced a new budget simulator tool that provides advertisers with a more accurate prediction of how changes to their budget could impact their campaign's performance. This tool can help advertisers make more informed decisions about their budget and maximize their ad spend. It's been a useful addition to Google Ads so far; I think you'll like it too.
Google Ads has also introduced automated bidding strategies, such as Target CPA (Cost per Acquisition) and Maximize Conversions, which automatically adjust bids to help advertisers reach their target goals while staying within their budget. These strategies use machine learning algorithms to optimize bids based on various factors, including historical performance data and user behavior.
Despite these changes and updates, it's still possible for advertisers to experience issues with their ads not spending their entire daily budget.
Google's Budget Flexibility
The first thing I recommend that you check when you notice that you're not spending the full amount in your daily budget is this: how long has it been going on?
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.
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 setting establishes the baseline for what you're getting out of your advertising.
However, what happens if demand for your search query suddenly increases one day – such as a day before a holiday when you suddenly have sales going on? 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 unrelated to anything you can predict, you miss 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.
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 on 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 overspend.
1. Your Bids are Too Low
One of the critical calculations when running PPC advertising is your cost per action. Whether paying per conversion, lead or hit, you pay 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.
This phenomenon 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 ten people bidding for a spot, five of those people are going to be outbid 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 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 on your daily budget.
2. Your Ad Rank is Low
Google assigns an ad rank to every ad on its 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 ranked #1. The second spot is an ad ranked #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.
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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 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.
- Sign into your Ads account.
- Click on Campaign, Ad Groups, Product Groups, or Keywords to choose a category.
- Click on the columns button and click to modify your columns.
- Click on competitive metrics, and choose impression share columns to display.
- Apply and look at your data.
3. 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.
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, the volume and competition metrics are low enough that you get it all. Yup, all of it. You pay for each and every bit of potential traffic coming from that keyword, and you still have money left over.
4. You Don't Have Enough Keywords Listed
This situation 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 if one of those keywords has a moderately high monthly volume, its daily volume might be low enough that you spend enough to capture it all.
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.
5. 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.
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.
6. Your Target Location is Too Narrow
Another possible reason I occasionally see 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.
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 fix it.
7. 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, 2 pm to 4 pm and 8 pm to 10 pm, and no other times if you so desire.
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 strategy can end up having the same problem as the low-volume keywords, however.
What about you? I know a lot of you out there have spent a long time testing and optimizing your Google Ads, and you've probably seen just about every problem under the sun.
Have you encountered times when 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 and we can get a conversation started!