Google Ads Daily Budget: How is your daily budget determined?

Your daily budget can significantly impact the success of your Google Ads campaigns, and setting a daily budget is a crucial step. I’ll walk you through how Google Ads daily budgets work and how much you should spend on your campaigns each day to better meet your advertising goals.

What is a daily budget in Google Ads?

Your Google Ads daily budget is essentially the average amount you’d like to spend on a specific ad campaign each day. Google uses this budget to help control your ad spend and ensure you don’t exceed your monthly ad budget.

How does your Google Ads daily budget work?

Google Ads uses a daily budget to serve and display ads. Your daily budget is the average amount you’re willing to spend on your ads each day. Google uses this budget to determine how many times your ads will be displayed in a day. You can use this formula to determine your Google Ads daily budget:

Some advertisers take the opposite approach and use the following formula to create their monthly budget:

It’s important to note that due to traffic fluctuations, Google may exceed your daily budget by 20% on certain days. For example, your campaign may spend more on day 3 due to higher search volume than on day 4.

However, Google guarantees that you won’t exceed a monthly spending limit, which is the average number of days in a month (30.4) multiplied by your average daily budget. If your campaign exceeds your monthly budget, Google Ads will credit the excess spend back to your advertising account.

Why is your daily budget so important?
Understanding your daily budget is important for the following reasons:

Controlling advertising spending

Setting a daily budget gives you control over your ad spend.
This ensures that you don’t overspend on your campaigns.
Flexibility
Daily budgets are also flexible. Google Ads allows you to change your daily budget at any time, giving you the ability to adjust your spend based on your ad performance. If your ads are performing well, you can decide to increase your daily budget. Conversely, if your ads aren’t performing as well as you’d like, you can choose to decrease your daily budget.
Spend efficiency
Setting a daily budget can also improve the efficiency of your ad spend. Google Ads uses daily budgets to help manage ad spend and ensure that funds are spent efficiently. By setting a daily budget, you can ensure that your ads appear at the right times to reach your target audience.
How do I determine my daily budget for Google Ads?

The first step in determining your average daily budget is to understand your overall marketing budget. This is the total amount you’re willing to spend on all your marketing efforts, including Google Ads. Once you have a clear idea of ​​your overall marketing budget, the next step is to determine how much of that budget you want to allocate to Google Ads. This depends on a variety of factors, such as your marketing goals, the size of your business, and competition in your industry. Once you’ve determined your Google Ads budget, you can calculate your average daily budget. Google averages the number of days in a month to 30.4. So, to calculate your average daily budget, simply divide your Google Ads budget by 30.4. Google Ads offers a few tools to help you:Performance Planner: A tool for optimizing your existing campaign budgets. Keyword Planner: Allows you to determine the maximum amount you’d pay, on average, per click on your ads for each of your keywords.

How much should you spend on Google ads?

Determining the ideal average daily budget for Google Ads is a complex task because it varies greatly from business to business. The budget for Google Ads is affected by the company’s total marketing budget and the average cost per conversion and conversion value. For example, a car dealership will naturally spend more on advertising than a clothing retailer. But generally speaking, we need to refer to the average click cost in Google Ads Keyword Planner, and then estimate the ad click-through rate and conversion rate, so that we can calculate a rough average cost per conversion CPA. Generally speaking, 50-100 conversions per month is the most basic state. Take 50 as an example: multiply the calculated CPA by the 50 monthly conversion goal to get the monthly budget, and then divide it by 30.4 to get the minimum daily budget.

How do I set or edit my average daily budget in Google Ads?

Step 1: Sign in to your Google Ads account
Step 2: Select the campaign you want to editOnce signed in, navigate to the Campaigns section of your Google Ads account. This is where all your active campaigns are listed.
From the list of campaigns, select the campaign for which you want to set an average daily budget and click Open Campaign Settings.

Step 3: Enter your daily budget In the campaign settings, find the “Budget” section.
This is where you can enter your average daily budget. Remember, this should be the average amount you’re willing to spend on this campaign each day.

After entering your average daily budget, be sure to save your changes for the new budget to take effect immediately.

3 tips for setting a daily budget for your Google Ads campaign

1.Use Google’s Keyword Planner tool

Google Keyword Planner is a free tool from Google Ads. In addition to discovering relevant keywords, it can be a powerful aid in setting optimal daily bids for your Google Ads campaigns. Keyword Planner helps you research keywords relevant to your business and see estimates for cost-per-click (CPC), competition, and search volume. By understanding the potential costs and competition associated with your keywords, you can make more informed decisions about your daily budget.

2.Choose the right keywords The keywords you place should be highly relevant to your business and the products or services you want to promote. Information about potential keywords gathered from tools such as Google Keyword Planner plays a key role. Look for keywords with high search volume and low competition, as these keywords usually provide the best return on investment. When choosing keywords, also consider keyword matching type. Keyword matching type is also one of the factors that affect budget.

3.Use the Bid Simulator tool After running an ad campaign for a period of time, adjusting the daily budget will have an impact on ad coverage and conversion rate. For this reason, Google provides a tool called Bid Simulator to help advertisers effectively measure the impact of budget changes on ad performance. This tool can show you the performance of ad campaigns under the current daily budget and the expected performance under different daily budgets.

From the example above, Google suggests that if you increase your daily budget for this campaign from $50 to $89.57, your weekly costs will increase from $134.37 to $241, and your conversions will increase from 8 to 11.

Summarize

Understanding your Google Ads daily budget is essential to running your ads. By understanding what a daily budget is in Google Ads, how to determine your average daily budget, and what to expect with your Google Ads daily budget, you can make more informed decisions about your ad spend.