1 December 2017
Last month, Google took another step towards bringing their machine learning and artificial intelligence capabilities to the forefront of campaign management in AdWords.
The search giant announced that daily campaign budgets are now capable of spending up to twice what they’re set to spend.
The concept of overdelivery isn’t a new one — Google previously allowed spend to exceed daily caps by 20%. However, now it is creating more leeway for its machine learning to make adjustments in order to maximise spend to reach advertising goals such as clicks and conversions, and also to prevent capping during high times of traffic.
Google leverages real-time auction data to algorithmically flight campaign budgets throughout a given month. If there is typically less demand for a particular advertiser on weekends, for instance, AdWords could adjust for that either by spending more in advance or in higher-demand periods in the following week.
As with other evolutionary changes to the AdWords platform or ad units (such as Enhanced Campaigns), Google is not allowing an opt-out of this feature, which means that advertisers have to adopt to the new standard, and it will impact certain advertisers more than others.
It is worth noting that a sample set of internal data shows that spending over campaign budget caps in Google has been relatively limited thus far, with less than 20% of campaigns seeing instances of overspending, and that when overspending does occur, it averaged 13% over the daily cap. We’re also seeing that nearly 80% of the overspend has come from campaigns marked with the “Limited by Budget” status in AdWords – a key signifier for where this may occur. So, while specific campaigns may spend up to +100% of their caps, on the whole, the variance we have observed so far has been much less drastic.
While this change reflects a larger reliance on Google’s machine learning to optimise campaign performance, this announcement also took effect with no advance notice. Since launch, this update has understandably left advertisers unsure of its potential impact on pacing and investment.
While each advertiser has unique processes and considerations for its budget pacing in AdWords, the most important step to take at this point is to closely monitor overall spend levels as well as specific campaigns that are likely to experience overdelivery. Determine whether a shift in pacing strategy is advisable based on how Google’s new policies are impacting your account. Moreover, consider things like how your intended engine allocations could change, or the compounded effect of many small overdeliveries throughout a month.
Google’s emphasis on automation is growing, and an impact on bidding, budgeting, campaign formats and much more is clear. While automation comes with less direct control, the promise of optimisation based on dozens of near-auction time factors makes the inclusion of machine learning one that cannot be ignored by advertisers. Resolution will continue to integrate this and other machine learning changes while aiming to unpack the factors that drive these updates.
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