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Google Ads Not Spending Budget: Why and How Can You Solve It?

Have you ever faced a situation when you are not spending your allocated money and started wondering, “Why are my Google Ads not spending budget?” You’re not alone. Many advertisers face this issue, and it can be frustrating when your ads don’t utilize the full budget. This article will delve into the reasons behind this and provide solutions to ensure optimal ad spend.

Before you begin: How does Google Ads budget work?

Before we address the issue of Google Ads not spending budget, it’s crucial to understand how the Google Ads budget works. Here’s a detailed breakdown of the key components:

1. Daily budget

Your daily budget is the average amount you’re willing to spend on a specific campaign each day. Google uses this amount to guide its ad serving throughout the day. However, due to fluctuations in traffic, your actual spend may vary. But don’t worry, Google ensures that over the course of a month, you won’t be charged more than your daily budget times the average number of days in a month.

For instance, if the cost per click (CPC) for your keyword is $1 and you anticipate around 10 clicks per day, then your daily budget should be at least $10.

Suppose you intend to allocate $304 for advertising in a month. To calculate your average daily budget, you would divide $304 by 30.4 (the average number of days in a month, calculated as 365/12), resulting in an average daily budget of $10.

Here’s how you would calculate your average daily budget based on this example:

$304 / 30.4 = $10 per day (Monthly budget / Average number of days per month = average daily budget).

2. Campaign budget

Each campaign in your Google Ads account has its own budget. This allows you to allocate different amounts of money to different campaigns based on their importance, performance, or business goals. For example, you might set a higher budget for a campaign promoting a new product launch and a lower budget for a campaign promoting an older, well-established product.

3. Shared budget

Google Ads also allows you to create shared budgets, which are budgets that are shared by multiple campaigns in your account. This can be useful if you want to allocate a pool of money across multiple campaigns. For example, if you have a total marketing budget of $1000 per month, you could create a shared budget and let Google Ads distribute that budget across your campaigns based on their performance.

The consequences of Google Ads not spending budget

When your Google Ads are not spending your budget, it can have several consequences impacting your business and marketing efforts. Here’s a detailed look at some of these consequences:

The consequences of Google Ads not spending budget

Reduced visibility

One of the primary consequences of your Google Ads not spending your budget is reduced visibility. If your ads are not being shown as often as they could be, fewer people are seeing your ads. This can lead to fewer impressions, clicks, and ultimately, conversions.

Missed opportunities

Every time your ad doesn’t show up for a relevant search query, it’s a missed opportunity. These missed opportunities can add up over time, leading to significant losses in potential revenue.

Inefficient use of resources

If your Google Ads are not spending your budget, it means your budget is not being used efficiently. You’re setting aside a certain amount of money for your Google Ads, but if that money is not being used, it could be better spent elsewhere.

Difficulty in measuring performance

When your ads are not spending your budget, it can make it more difficult to measure the performance of your campaigns. You might not have enough data to make informed decisions about your campaigns.

Impact on business goals

Finally, if your Google Ads are not spending your budget, it can impact your ability to achieve your business goals. Whether you’re looking to increase brand awareness, drive traffic to your website, or increase sales, your Google Ads play a crucial role in achieving these goals.

Why are your Google Ads not spending budget?

Let’s clear out a common misconception: Google Ads does want to spend your budget. Remember, they’re in the business of selling clicks, and an unspent dollar is a lost opportunity for them too. So, if your ads aren’t hitting their targets, the problem lies not with Google’s greed, but within your campaign settings and the competitive landscape itself.

In case you’re facing the issue of Google Ads not spending your budget, you should understand that this is a common problem that many advertisers face. There could be several reasons why it happened to your campaigns. Some common ones are:

1. Low maximum bid or budget

Google Ads operates on a bidding system. If your maximum bid or daily budget is too low, your ads may not be competitive enough to win auctions, especially if the cost per click (CPC) in your industry is high. This could result in your ads not showing as often as you’d like, leading to lower ad spend.

Google ads not spending budget_Low maximum bid or budget

Solution:

  • Analyze your campaign’s average Cost-Per-Click (CPC) and compare it to industry benchmarks.
  • Raise your bids incrementally to make your ads more competitive. However, be careful not to increase your bids too much as it could lead to higher costs without necessarily improving performance.
  • Keeping an eye on performance and ROI.

2. Low ad quality

Google Ads uses a bidding process to decide which campaigns get to show their ads, and this process doesn’t just depend on how much each campaign bids. Ad quality matters too. As part of delivering an overall high-quality internet browsing experience, Google Ads actually lets high-quality ads with lower budgets win out over poor-quality ads with higher budgets.

Google ads not spending budget_Low ad quality

Solution:

  • Check your ad quality via Quality Score, a metric that assesses your ads. If your Quality Score is low, your ads might not be shown as often, leading to lower ad spend. Review your ad copy, keywords, and landing pages to improve your Quality Score.
  • Set up conversion tracking to measure the effectiveness of your ads and provide Google with valuable data to optimize your campaigns. If you haven’t set up conversion tracking, consider doing so to improve your campaign performance and ad spending.

3. Low ad rank 

Ad rank is a value that determines your ad position on Google Search, relative to other ads. It’s calculated using several factors, including your bid amount, the expected click-through rate, ad relevance, landing page experience, competitiveness of the auction, the estimated impact of any ad extensions you’re using, and the context of the user’s searches. If your ad rank is low, your ads may not show up frequently, leading to Google Ads not spending your entire budget.

Google ads not spending budget_Low ad rank 

Solution: To improve your ad rank, we recommend concentrating on three major factors: click-through rate (CTR), ad relevancy, and landing page quality.

4. Tight targeting

If you’re targeting a very specific demographic or location, the overall search volume may be low. This means fewer people are searching for your keywords, which can lead to lower impressions and clicks, and hence lower ad spend. This is especially true if you’re targeting very niche or specific keywords. Similarly, if you’re targeting an area where your products or services are not in demand, your ads might not get enough clicks to spend your budget.

Google ads not spending budget_Tight targeting

Solution: 

  • Analyze your search terms report and identify relevant, high-volume keywords you might be missing.
  • Review your location targeting to ensure you’re targeting areas with sufficient demand for your products or services.
  • Consider expanding your audience demographics, interests, and keywords to broaden your reach and attract more potential clicks.
  • Experiment with audience expansion tools like Similar Audiences and In-Market Audiences.

5. Inappropriate keyword match types

The match type of your keywords can also impact your ad spend. Broad match keywords can trigger your ads for a wide range of search queries, which can help increase your ad spend. On the other hand, exact match keywords can limit the number of search queries that can trigger your ads, which might result in your ads not spending your budget.

Negative keywords prevent your ads from showing for certain search queries. If you’ve added a lot of negative keywords to your campaign, it might be limiting the number of search queries that can trigger your ads. This can result in your ads not spending your budget.

Google ads not spending budget_Inappropriate keyword match types

Solution: 

  • Consider expanding your keyword list to include broader or related keywords that can help increase your reach.
  • Regularly review your search query reports:
    • If you identify a profitable keyword, using the exact match type helps you bid more aggressively as you end up avoiding the risk of spending on irrelevant search terms.
    • If you identify irrelevant search queries that are triggering your ads, you can add these as negative keywords to prevent your ads from showing for these queries.

6. Ineffective bid strategy

Google Ads offers several bid strategies, each suited to different campaign goals. If you’re using a performance-based bid strategy like Target CPA or Target ROAS, these strategies require historical conversion data to work effectively. If your campaign is new or you haven’t set up conversion tracking, these strategies may not work effectively, leading to lower ad spend.

Ineffective bid strategy

Solution: 

  • Understand how each strategy works and ensure it aligns with your campaign goals.
  • Analyze your campaign performance data and consider adjusting your bidding strategy. For example, if you prioritize conversions, switch to Target CPA or Maximize Conversions instead of focusing solely on clicks.

7. New campaign

When you launch a new Google Ads campaign, Google’s algorithms need time to analyze and understand it. During this initial phase, Google assesses the quality and relevance of your ads and keywords. This process can take some time, and until it’s complete, Google may not show your ads to the majority of searchers. This could be why your Google Ads are not spending your budget.

New campaign

Solution: Google’s algorithms need more time to analyze and understand your new campaign. So patience might be required in this case. If your ads are properly set up but the problem persists, consider seeking advice from a Google Ads expert, like Mega Digital.

8. Not optimal ad scheduling

Ad scheduling allows you to specify certain days or hours when your ads should run. Imagine having a bustling storefront open only during the dead of night. If your ads are scheduled for times when your target audience is not active or unlikely to be searching for your keywords, your ads might not spend your budget. It’s important to align your ad schedule with the times when your target audience is most likely to be searching for your products or services.

Not optimal ad scheduling

Solution: 

  • Analyze your audience’s peak search times and adjust your ad schedule accordingly.
  • Utilize Google Ads’ “DayParting” feature to optimize budget allocation during prime hours.

Utilize Google Ads services from a trusted agency

If you find these aforementioned strategies to solve the issue of Google Ads not spending budget too complicated to follow, you can refer to the help of a trusted Google-partnered agency, like Mega Digital. Beyond streamlining your ad campaigns and providing access to a wide array of ad formats, Google Ads Management services from Mega Digital bring a multitude of benefits:

  • Google-certified experts: Our team is well-trained in Google advertising features and has been utilizing them since their inception, ensuring a deep understanding of the platform’s capabilities.
  • 1:1 consultation: We provide personalized support and expertise throughout the process with a dedicated Google-certified ads consultant assigned to every campaign.
  • Exclusive insights and tools: With agency accounts, you gain access to a treasure chest of exclusive insights and tools.
  • Google support priority: As a top Google partner in APAC, we have a direct line to Google, ensuring priority access to resolve any ad-related issues quickly and efficiently.

Case study: How Jwala Diamonds address their Google Ads not spending budget issue?

Jwala Diamonds

Company background

Jwala Diamonds, an e-commerce business specializing in jewelry, was facing an issue with their Google Ads campaign. Despite setting a substantial daily budget, the campaign was consistently underspending, leading to missed opportunities for increased visibility and potential sales.

Their campaign has been running for about 6 months. Some metrics on it:

  • CTR: 9.16%
  • CPC: $0.90
  • Conversion Rate: 7.66%
  • Cost Per Conversion: $11.44

Challenge

The primary challenge for Mega Digital was to identify the reasons why the allocated budget not spending and devise strategies to optimize the Google Ads campaign for improved performance.

Analysis

After a thorough analysis of the company’s campaign performance, we have found some problems that make their campaign not spend its allocated budget, and propose some solutions to help tackle that issue.

  • Keyword selection:
    • Issue: The initial analysis revealed that the chosen keywords were not sufficiently competitive or relevant to attract a substantial audience.
    • Solution: We guided them to conduct thorough keyword research to identify high-performing and relevant keywords with higher search volumes. After that, we told them to use a mix of short-tail and long-tail keywords to capture a broader audience.
  • Bid adjustments:
    • Issue: Ineffective bid strategies were contributing to limited ad visibility.
    • Solution: We advised them to increase their bid and implement an automated bidding strategy to adjust bids based on factors like time of day, device type, and user demographics. It might cause CPC to rise but we believe with our direction, their conversion rate will rise too.
  • Audience targeting:
    • Issue: The campaign was not effectively reaching the intended audience.
    • Solution: We suggested refining audience targeting by leveraging Google’s audience insights. Utilized custom intent and affinity audiences to target users who exhibited a higher likelihood of being interested in handmade jewelry.

Results

  • Increased ad impressions: By optimizing keywords, ad copies, and bid strategies, Jwala Diamonds experienced a significant increase in ad impressions, ensuring more visibility among the target audience.
  • Improved Click-Through Rate (CTR): The revamped ad copies and creatives led to a higher CTR, indicating increased engagement and interest from users.
  • Maximized budget utilization: By implementing effective bidding strategies and optimizing ad delivery, the campaign consistently spent the allocated daily budget, ensuring maximum exposure throughout the day.
  • Boosted conversions: The combination of improved visibility, higher CTR, and better-targeted audiences resulted in increased conversions and, ultimately, a positive impact on sales.

Wrap-up

Understanding why Google Ads are not spending your budget can be complex. However, with the right strategies, you can ensure your ads utilize the full budget and reach your target audience effectively. Remember, the key is to continually monitor and adjust your campaigns for optimal performance.

Read More: Google Ads issues today | Common problems and solutions

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