Google Ads have been set to spend limitlessly so far. The Daily spending limit feature was available but it was always a query from the advertiser’s side to have a limit on a monthly basis.
Google has introduced a new feature that will help advertisers in deciding their monthly expenditure limits. This feature is known to be the Monthly Spending Limit, which will help you control the money spent on Google Ads for every month.
What is the Monthly Spending Limit in Google Ads
The maximum amount one can pay for a campaign every month is known to be the monthly spending limit.
“You can calculate it by multiplying the average daily budget you set, by the average number of days in a month, which is 30.4 (365 days in a year ÷ 12 months). If your campaign starts during a calendar month, we will only take into account the days the campaign was running.” – Google Ads
How to calculate the Monthly spending limit for your Google Ads campaign?
This is a simple way of calculating your monthly spending, you have to multiply the daily spent limit along with 30.4 which is the average daily budget for most of the campaigns, and this will give you the monthly spending limit for your Google Ads.
For instance; if you have an average daily budget of $5, the monthly spending limit will be $5*30.4 = $152.
But remember if you make changes to the average daily budget it will affect the monthly spending limit as well.
How to set up a Monthly spend limit in a Google Ads campaign?
The monthly spending limit is applicable for the account level and so you will have to,
- Select the Billing option from the Google Ads account which is on top of the right hand side of the toolbar.
- On the left side, you will have the menu, from that choose the Settings option
- You will get through to a page where you will be able to create the monthly spending limit for your Google Ads
- There will be an option whether to control the monthly spending limit or not. Once you click the option it will be followed by the amount column where you will have to set the monthly spending limit excluding taxes.
- Once all these steps are done, click on save to create the monthly spending limit for your Google Ads.
The Advantages and disadvantages of using Monthly spending limit in Google Ads
To create a monthly spending limit you will have to first set up your daily spent limit, as the monthly spent will be calculated based on the daily budget.
Let us take a scenario where an advertiser is unsure if he wants to use the monthly spending limit feature for his Google Ads account. So here we go getting in the shoes of the advertisers knowing the advantages and the disadvantages of using the new feature.
Advantages in using monthly spending limit
There are many benefits added on if you choose this feature some of them include,
- A cost-effective tool in limiting the amount spent.
- This feature allows the users to adjust the settings at any time.
- A Monthly basis budget helps in deciding the accurate amount to be spent on the Google Ads account.
- The amount spend can be managed.
Disadvantages of monthly spending limit
Like every coin has two sides, this feature has also drawbacks, some of them include,
- The monthly spending limit is available only at the account level.
- One might say a monthly budget helps in limiting the expenditure but limiting the amount spent in the Google Ads account can be a bit tougher job to do.
- There are more possibilities for this feature to limit your level of reach.
- If the daily budget is low then the monthly spending limit feature might stop your Google Ads from running due to insufficient funds.
What happens when Google Ads exceed the monthly spending limits?
Let us be clear using an example, imagine an advertiser has a Google Ads campaign with a daily average budget of $10 and the monthly spending limit of $10*30.4 = $304.
Let us assume for a month consumer demand has increased and the Google Ads campaign has received more clicks that cost $309. You might know that the monthly spending limit was $304 and now you have received clicks for $309. It is the system to stop the Google Ads from showing. But in rare cases, the system might not recognise the issue right away.
“This is not how much you pay. Your billed cost, the amount you’re responsible for paying, will never exceed your spending limits.” – Google Ads
In that case, Google will be charging only $304 and not for the extra clicks. Google will be paying the excess of $5 on behalf of you.
But remember this happens once in a blue moon, only if the system doesn’t detect the limits.
Coming to an end, as the new feature helps advertisers in having control over the amount spent it is indeed great news for those who have limitations in budget. But make sure to adjust the average daily budget to convert it into a monthly spending budget, so that your Google Ads do not stop running in the middle of the month.
