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Daily Budget versus Max. CPC

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# 1
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Does Daily Budget act the same as a Max. CPC when it is lower than the keyword Max. CPC?

 

If I am targeting a bunch of costly health insurance terms and set my bid at $50, but my Daily Budget can't go higher than 20% over $30, will Daily Budget override my CPC. Is it like a normal Max. CPC? As in, will the low Daily Budget impact my Quality Score, or will that still be left to my Keyword bid, despite the fact that I can't possible support that bid?

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Accepted by topic author Chris H
March 2016

Re: Daily Budget versus Max. CPC

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# 2
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This is a really interesting, technical question.

The issue would be that your keyword would not show because Adwords will recognise the budget is "insufficient". You'll straight away get the restricted by budget message most likely.

However, it wouldn't surprise me if the keyword bid over rides the daily budget. Adwords will do it's best to "get the most from your budget" for you so it could still charge for the click value even if it is more than your daily budget in order to try and get you a click here and there.

Your quality score shouldn't be effected because of your daily budget however it will be effected by the knock on effect of it. I.e not gathering enough data to actually give you chance to improve on a quality score.

Adwords is an imperfect system. When it comes to high cost bids like this...very tightly controlled ad groups, relevant ads and landing pages and extensive negative lists are your best option. Allow the data you do collect to only be of the highest quality and avoid filtering from broad keywords. You will built data more slowly but more efficiently from the quality score/cost side of things.

Also, avoid using mobile bid adjustments if your campaigns are new. Adding them can stop your ads showing on desktop almost all together if your budget is restricted and the system is prioritising mobile clicks.

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Marked as Best Answer.
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Accepted by topic author Chris H
March 2016

Re: Daily Budget versus Max. CPC

Participant ✭ ☆ ☆
# 2
Participant ✭ ☆ ☆
This is a really interesting, technical question.

The issue would be that your keyword would not show because Adwords will recognise the budget is "insufficient". You'll straight away get the restricted by budget message most likely.

However, it wouldn't surprise me if the keyword bid over rides the daily budget. Adwords will do it's best to "get the most from your budget" for you so it could still charge for the click value even if it is more than your daily budget in order to try and get you a click here and there.

Your quality score shouldn't be effected because of your daily budget however it will be effected by the knock on effect of it. I.e not gathering enough data to actually give you chance to improve on a quality score.

Adwords is an imperfect system. When it comes to high cost bids like this...very tightly controlled ad groups, relevant ads and landing pages and extensive negative lists are your best option. Allow the data you do collect to only be of the highest quality and avoid filtering from broad keywords. You will built data more slowly but more efficiently from the quality score/cost side of things.

Also, avoid using mobile bid adjustments if your campaigns are new. Adding them can stop your ads showing on desktop almost all together if your budget is restricted and the system is prioritising mobile clicks.

Re: Daily Budget versus Max. CPC

[ Edited ]
Community Manager
# 3
Community Manager

EDIT: Abbie beat me to it! But in short: quality score is not affected; you may be able to show occasionally for the high cost terms if it's within your overdelivery limit, but you likely wouldn't get much visibility.

 

Hi Chris,

Thanks for posting! Your bid and budget do not have an impact on your quality score--the quality score is calculated independently, based on expected CTR, ad relevance, and landing page experience.

And to answer your initial question--no. The Max CPC does not have any bearing on your budget and vice versa. So if your potential cost per click is higher than what your set budget allows for, your ad will likely not show up in the search results since the system will see that you don't have enough budget available to show for that search.

Does that make sense?
Cassie

Re: Daily Budget versus Max. CPC

Top Contributor
# 4
Top Contributor
Ohhh... I was in the middle of typing my reply when I notice that Cassie and Abbie were ahead of me. Smiley Surprised

So I will just add that in this scenario you are unlikely to get impressions for the expensive keyword. The system would attempt to show your ad for less expensive keywords.
Moshe, AdWords Top Contributor , Twitter | Linkedin | Community Profile | Ad-Globe
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