How to Set Monthly Spending Limit in Google Ads

Effective budget control in Google Ads is a great way to optimize the performance of ads within your controlled budget. 

There are two ways to control budgets:

1. Monthly Account Spend Limit
2. Automated Spend Limits Based on Campaign Budgets

Let’s have a closer look at both options.

1. Monthly Account Spend Limit

You can control your cost with a monthly account spend limit on account level.

Once this limit is reached, all campaigns will automatically stop serving until the first day of the following month, when the monthly spend resets to zero.

Setting Monthly Account Spend Limit

Follow these steps to set a monthly account spend limit in your Google Ads account:

1. Go to Billing > Summary.
2. Click on ‘Manage spend limit‘ in the ‘Account spend limit‘ section.
3. Enable the feature and set your monthly spend limit.
4. Save.

How the Account Spend Limit Works

As you’ve seen, setting it up is simple, but what should you keep in mind when working with an account spend limit?

Reporting Note: Since reports may not always reflect real-time data, you could slightly overspend, especially if the limit is reached late in the month.

Real-time Control: Your account spend limit is active the moment you set it, and all campaigns will stop as soon as you hit that limit.

Monthly Reset: On the 1st of every month, the limit resets, allowing campaigns to resume if the budget is renewed or updated.

Editable at Any Time: You can adjust your monthly spend limit whenever you want, either to increase or decrease the budget as needed.

2. Automated Spend Limits Based on Campaign Budgets

These limits are automatically set by Google Ads based on the daily budget you’ve assigned to each campaign.

Monthly Spending Limit

Your monthly spending limit is the maximum amount you are willing to pay for a campaign over a month. This limit is calculated by multiplying your average daily budget by the number of days in a month, which Google standardizes to 30.4 days.

For example, if you set your average daily budget to $10, your monthly spending limit will be:

$10 (daily budget) × 30.4 (average days in a month) = $304

This means Google Ads will ensure that your total spend for the month does not exceed $304, even if your campaign performance fluctuates on certain days.

Daily Spending Limits

Google Ads also sets a daily spending limit to allow for fluctuations in traffic on high-demand days.

For most campaigns, Google can spend up to twice your average daily budget in one day.

While this may seem like overspending, it’s important to remember that the system balances out over the course of the month. Google ensures that the total spending does not exceed your monthly limit.

So, if your daily budget is $10, your daily spending limit would be:

$10 × 2 = $20

On some days, your campaign may spend up to $20 to take advantage of increased traffic or higher consumer interest. However, your total spend for the month will still adhere to the $304 limit.

Why Does Google Allow Higher Daily Spending?

Allowing campaigns to spend more than their daily budget on some days helps improve your ad performance.

During periods of high consumer interest, more ad exposure can lead to better returns on investment.

As long as your total monthly limit remains intact, this system helps you get the most out of peak traffic opportunities without breaking your budget.

Steps to Set or Adjust Your Monthly Spending Limits

Setting or adjusting your spending limits in Google Ads is straightforward.

Follow these steps:

1. Log in to Your Google Ads Account:
   • Go to the Google Ads interface and select the campaign you want to set a spending limit for.
2. Set Your Daily Budget:
   • Under the “Campaigns” tab, update the value in Budget column.
   • Enter your desired average daily budget. Google will automatically calculate the monthly spending limit based on this figure.

Impact of Changing the Average Daily Budget

It’s important to note that any changes to your daily budgets will immediately affect your daily and monthly spending limits.

If you increase your daily budget mid-month, your spending limit will increase accordingly.

For instance, if you raise your daily budget from $10 to $20 halfway through the month, the system will adjust the remaining budget for the rest of the month to reflect the new daily spend:

New daily budget × days remaining = adjusted monthly spending limit

Exceeding Daily or Monthly Spending Limits: What Happens?

Although it’s rare, there are situations where your campaign’s served cost may exceed the daily or monthly spending limits due to system discrepancies. 

In the event that your served cost exceeds the spending limits, Google will only charge you the amount within your set limits, and it will cover any extra costs.

Sometimes when Google delivers over your monthly budget, it credits you the cost back. This situation is called Overdelivery.

Example: Exceeding Daily Limit

Let’s say you have a campaign with:

• Average daily budget: $10
• Daily spending limit: $20

On a high-demand day, your campaign generates $23 in costs. While your served cost is $23, you’ll only be billed $20, and Google will cover the extra $3.

Example: Exceeding Monthly Limit

Suppose your average daily budget is $10, which means your monthly spending limit is $304. In a high-traffic month, your campaign generates $310 in served costs. Google will still only bill you $304, and will absorb the additional $6.

How to Check Billed Costs and Served Costs

Under ‘Predefined Reports‘, Google provides a ‘Billed Cost‘ report, which shows the actual amount you’ll pay after adjustments to your Google Ads account.

If you want to ensure that your served costs never exceed your billed costs, you can track both figures in this report.

To open it, go to Reports > Predefined reports > click on Billed Cost report.

It shows the following columns:

• Served costs: Actual cost of clicks or impressions generated by your ads.
• Billed costs: The amount you will ultimately be charged after adjustments.

If the served cost exceeds the billed cost, rest assured that Google will cover the difference.

You can also export this data as a CSV file for deeper analysis.

Conclusion

Setting and managing monthly spending limits in Google Ads ensures you maintain full control over your campaign’s budget. By understanding the relationship between daily and monthly spending limits and regularly monitoring billed costs and served costs, you can stay on top and control your cost without exceeding your financial constraints.