Google AdWords: What does “Limited by Budget” mean?

Google AdWords: What does “Limited by Budget” mean?
Sankt-Petersburg, Russia, August 31, 2018: Google Ads AdWords application icon on Apple iPhone X screen close-up. Google Ad Words icon. Google ads Adwords application. Social media network

adwords-limited-by-budgetOne of the great things about AdWords is that advertisers can set a daily budget to accurately control their advertising costs. As an AdWords management agency, we often find ourselves notifying clients their budget is “limited” so what does “Limited by Budget” actually mean?

When your budget is “limited” it usually means your budget can’t accommodate all of the available traffic for your keywords. In order to make your ads last throughout the day, Google will stop showing your ads for every possible search of your keywords to avoid your budget becoming depleted very quickly.

 

What can I do about a limited budget?

The most obvious solution is to increase your budget. If your account is profitable, then increasing your budget is a no brainer – It’s simply scale: If your profitable with your current budget you will be with an increase budget providing all other factors remain the same.

Example: If you get roughly 100 sales for a £50 per day budget and you are “limited by budget” increasing your budget to £100 per day should yield 200 sales.

It’s a simple case of scale.

 

When shouldn’t I increase my budget?

If you’re account is not profitable as of yet then it won’t be if you increase your daily budget either. Remember, you’re scaling up your current performance and results will be relative.

However…

Sometimes, an increased budget can lead to your account becoming profitable quicker: More budget = more data and more data gives us more to optimise around.

Example: 

  • If your current budget allows for roughly 1000 visits per month we’d optimise your adwords account based on the data we received from these 1000 visits.
  • If your new budget allows 3000 visits per month, we can optimise around MUCH more data.

Essentially, with your current budget it would take 3 months to get the same level of data than with your new budget meaning your higher budget would like lead to quicker improvements.

It’s therefore wise to carefully consider the level of budget you’re willing to invest into your new AdWords account – a lower budget usually takes longer to maximise and a higher budget often leads to quicker results.

In addition to this, your budget should be relative to the items you sell. If you’re selling high value items you will struggle with a very low budget.