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Display Lost IS (Budget) is high, yet budget is not reached

Visitor ✭ ✭ ✭
# 1
Visitor ✭ ✭ ✭

Hey all,

In several display campaigns I run, I've noticed a high rate of Display Lost IS (budget), sometimes reaching as high as 40%, yet when I took a closer look I've noticed that on days in which the campaign have lost impression share due to budget constraints, the campaign's cost didn't even reach its budget.

The obvious question is, how come I've lost imps due to budget constraints, when my budget was not all spent?

I've hypothesized that this may be since a campaign's spend is monitored over an entire calendar month, and so AdWords are limiting my campaign's budget below its daily budget in order to compensate for other days in which the cost was high.
This, however, was quickly ruled out since these campaigns do not reach their "monthly budget".

I'd appreciate your thoughts on this, and thanks in advance for sharing them Smiley Happy

3 Expert replyverified_user
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Marked as Best Answer.
Solution
Accepted by Shanea K (Google Employee)
September 2015

Re: Display Lost IS (Budget) is high, yet budget is not reached

Top Contributor
# 6
Top Contributor
Hello Dadi,

I have a different possible scenario. See if this fits your situation.

In one day Google will over-deliver up to 20% of your daily budget but guarantees they will not over-deliver more than that in a day along with guaranteeing your monthly spend will not exceed your daily budget * 30.4 (average days in a month. You say your not reaching your monthly budget, so let's not talk about that now.

Now, let's say you have a daily budget that projects 5 clicks a day. (This is a simple example). Google will show your ad to multiple users at the same time, and they can't really throttle that. As long as your ad is eligible, it can be shown. Let's also say you already have 4 clicks today. The next click hits your daily budget, the click after that meets the 20% over-delivery mark, and the click after that is over the guarantee, meaning Google can't charge you for that. In this case, Google will stop showing your ad when or even before you have 4 clicks.

The more simultaneous displays of your ad, the more complex it gets. In the example above we're looking at 2 or 3 simultaneous impressions. If the keyword is eligible 110k times a day, it has to show on average about every 1.25 seconds. If the average page view time is 5 seconds, your ad would be showing, on average, to 4 users at a time, all day long. If all 4 users click on your ad and you only have budget for 2 more clicks, Google is again past the over-delivery guarantee. In this case, they have to stop showing your ad to anyone.

I hope this makes sense.

Pete
petebardo -- Deadhead doing AdWords

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Solution
Accepted by Shanea K (Google Employee)
September 2015

Re: Display Lost IS (Budget) is high, yet budget is not reached

Top Contributor
# 8
Top Contributor

I'll throw an oar in here as well along the same lines as Pete's thinking.  These metrics can produce strange figures when CPC costs are a "reasonable" percentage of daily budget.  Imagine the very simple (and somewhat ridiculous) example of there being only 100 impressions available per day, a 2% CTR, an average CPC of $7 and a daily budget of $10.  In this situation Google's only likely to provide 1 click a day because 2 clicks would exceed the daily budget - even the 20% allowance.  This might - for a given day with only one 1 click - result in a very high Lost IS (Budget) even though the budget itself is nowhere near spent.

 

These "Lost" figures are percentages and averaged across an entire Campaign, including all times, targeted regions, demographics and so on, so you'd need to extend the situation above to all these variations.  It might be the metric is very low - or even 0% for some combinations, but very high for others, depending upon that particular placement/location/time, etc.

 

To answer Dadi's situation we'd need to know a lot more about exact budgets, costs and keywords/placements.

 

Jon

AdWords Top Contributor Google+ Profile | Partner Profile | AdWords Audits

View solution in original post

Re: Display Lost IS (Budget) is high, yet budget is not reached

Collaborator ✭ ✭ ✭
# 2
Collaborator ✭ ✭ ✭

Hello,

 

Look also at the metric Display Lost IS (rank) it could be that your ads are not consuming the entire budget because their ad rank is too low and your ads are not selected for many auctions.

Re: Display Lost IS (Budget) is high, yet budget is not reached

Visitor ✭ ✭ ✭
# 3
Visitor ✭ ✭ ✭
Thanks for the answer Adrian,
I don't think that answers the question I've asked... The case you've described does not explain why the Display Lost IS (budget) is high.

Re: Display Lost IS (Budget) is high, yet budget is not reached

[ Edited ]
Collaborator ✭ ✭ ✭
# 4
Collaborator ✭ ✭ ✭

I think these metrics are connected, let me explain with an example.

 

Let's say that there are

a) 100.000 available impressions today and

b) with your global ad group bid of 1 $ and

c) your CTR of 1% and 

d) your budget of 300 $ per day you only get 100$ of clicks => 100 clicks ( 1 click for every 100 impression) = 100 x 100

 

you get clicks which will sum up around 10.000 of those impressions even if your budget can allow for more impressions those are not granted because of a limited ad rank. 

 

Now you decide to double your bid,

a) 100.000 available impressions today and

b) with your global ad group bid of 2 $ and

c) your CTR of 1% and 

d) your budget of 300 $ per day you only get 300$ of clicks => 150 clicks ( 1 click for every 100 impression) = 150 x 100=15.000 impressions

 

Now the system could be granting you 60.000 impressions, but your set budget cannot support it even if the ad rank improved by setting a bid of 2$.

 

The ad rank problem is diminished and you gain only 15.000 impressions  Now it becomes more obvious that a budget problem prevents you from reaching those 100.000 impressions.

 

So in a sense , the system could be telling you that the total potential impressions cannot be achieved with your current budget, even if you increase your bid. It is evaluating : what will happen if you max up your bid to get most of the impressions, is your budget enough ? No it isn't

 

The system could be knowing the optimal bid to reach most of the potential impressions , and it is telling you that even with that bid, your budget is too low to get those max potential impressions.

 

Does this make sense ?

 

[edited some numbers, do not affect the main point]

Re: Display Lost IS (Budget) is high, yet budget is not reached

Top Contributor
# 5
Top Contributor

Hello Dadi;

Remember  that these "lost" metrics are based on estimates which have  margins of error that  could be significant;

  • Have you made any frequent changes to the budget?
  • Do you use a shared budget?
Moshe, AdWords Top Contributor , Twitter | Linkedin | Community Profile | Ad-Globe
Did you find any helpful responses or answers to your query? If yes, please mark it as the ‘Best Answer’
Marked as Best Answer.
Solution
Accepted by Shanea K (Google Employee)
September 2015

Re: Display Lost IS (Budget) is high, yet budget is not reached

Top Contributor
# 6
Top Contributor
Hello Dadi,

I have a different possible scenario. See if this fits your situation.

In one day Google will over-deliver up to 20% of your daily budget but guarantees they will not over-deliver more than that in a day along with guaranteeing your monthly spend will not exceed your daily budget * 30.4 (average days in a month. You say your not reaching your monthly budget, so let's not talk about that now.

Now, let's say you have a daily budget that projects 5 clicks a day. (This is a simple example). Google will show your ad to multiple users at the same time, and they can't really throttle that. As long as your ad is eligible, it can be shown. Let's also say you already have 4 clicks today. The next click hits your daily budget, the click after that meets the 20% over-delivery mark, and the click after that is over the guarantee, meaning Google can't charge you for that. In this case, Google will stop showing your ad when or even before you have 4 clicks.

The more simultaneous displays of your ad, the more complex it gets. In the example above we're looking at 2 or 3 simultaneous impressions. If the keyword is eligible 110k times a day, it has to show on average about every 1.25 seconds. If the average page view time is 5 seconds, your ad would be showing, on average, to 4 users at a time, all day long. If all 4 users click on your ad and you only have budget for 2 more clicks, Google is again past the over-delivery guarantee. In this case, they have to stop showing your ad to anyone.

I hope this makes sense.

Pete
petebardo -- Deadhead doing AdWords

Re: Display Lost IS (Budget) is high, yet budget is not reached

[ Edited ]
Top Contributor
# 7
Top Contributor

Very interesting analysis by @petebardo

Pete; But this is assuming that the OP is near / close to exhausting the daily budget. My understanding, though, was that the daily budget is not even close to be utilized.

 

-Moshe

Moshe, AdWords Top Contributor , Twitter | Linkedin | Community Profile | Ad-Globe
Did you find any helpful responses or answers to your query? If yes, please mark it as the ‘Best Answer’
Marked as Best Answer.
Solution
Accepted by Shanea K (Google Employee)
September 2015

Re: Display Lost IS (Budget) is high, yet budget is not reached

Top Contributor
# 8
Top Contributor

I'll throw an oar in here as well along the same lines as Pete's thinking.  These metrics can produce strange figures when CPC costs are a "reasonable" percentage of daily budget.  Imagine the very simple (and somewhat ridiculous) example of there being only 100 impressions available per day, a 2% CTR, an average CPC of $7 and a daily budget of $10.  In this situation Google's only likely to provide 1 click a day because 2 clicks would exceed the daily budget - even the 20% allowance.  This might - for a given day with only one 1 click - result in a very high Lost IS (Budget) even though the budget itself is nowhere near spent.

 

These "Lost" figures are percentages and averaged across an entire Campaign, including all times, targeted regions, demographics and so on, so you'd need to extend the situation above to all these variations.  It might be the metric is very low - or even 0% for some combinations, but very high for others, depending upon that particular placement/location/time, etc.

 

To answer Dadi's situation we'd need to know a lot more about exact budgets, costs and keywords/placements.

 

Jon

AdWords Top Contributor Google+ Profile | Partner Profile | AdWords Audits

Re: Display Lost IS (Budget) is high, yet budget is not reached

Visitor ✭ ✭ ✭
# 9
Visitor ✭ ✭ ✭
Petebardo & Cobnut - I like the analysis you've presented and find it likely to be accurate.

Thank you all so very much for your detailed ideas and examples, I'm looking into it further and will update you as I progress.