Do Google Ads budgets work on a monthly basis or 30-day cycle?
May 17, 2024
By: Jyll Saskin Gales, Google Ads Coach
Have you ever wondered how Google Ads calculates your spending limit? It's a common question, and even seasoned advertisers can get tripped up by the details. Let's debunk a common misconception about Google Ads budgets and clarify how the 30-day cycle actually works (hint: it's actually 30.4 days).
The Myth of the 30.4-day Budget Cycle
Many advertisers believe that changing your average daily budget in Google Ads resets the 30.4-day cycle used to calculate your monthly spending limit. However, this is not entirely accurate. Google Ads operates on a monthly basis, and the way your monthly spending limit is adjusted when you change your budget is pretty nuanced.
How Google Ads Budgets Really Work
When you set an average daily budget for your Google Ads campaign, it determines two things:
- Daily Spending Limit: This is 2x your average daily budget, meaning your campaign cannot spend more than this amount in a single day.
- Monthly Spending Limit: This is 30.4 times your average daily budget, meaning you campaign cannot spend more than this amount in a calendar month.
What Happens When You Change Your Budget?
If you change your average daily budget, Google Ads doesn't simply reset the 30.4-day cycle. Instead, it considers how much you've already spent in the current month, and the remaining days in the month, to adjust your monthly spending limit accordingly. If you launch your campaign mid-month, your monthly spending limit is pro-rated based on how many days have passed in the month, and how many are remaining.
Example:
Let's say you give your campaign a $10 daily budget.
This means your daily spending limit is $20 (2 x $10) and your monthly spending limit is $304 (30.4 x $10).
On May 16th, you've spent $200, leaving $104 until you hit your monthly spending limit for the remaining 15 days of May.
If you increase your budget to $20 per day, your new daily spending limit is $40 (2 x $20) and your new monthly spending limit for the rest of May becomes $300 ($20 x 15 days remaining). The previous $104 limit is replaced, and you can now spend up to $300 until the end of May.
On June 1st, the cycle resets, and your new monthly spending limit for June would be $608 (30.4 x $20).
Key Takeaways about Google Ads budgets
- Google Ads budgets operate on a monthly basis, with a monthly spending limit of 30.4 times your average daily budget.
- Changing your budget doesn't reset the 30.4-day cycle, but adjusts your remaining spending limit for the current month.
- Understanding how Google Ads budgets work can help you optimize your spending and avoid surprises.
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