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What You Need to Know About Google AdWords Billing

Last Updated: January 11, 2018

If you’re confused by the way Google bills you for AdWords, you’re not alone. Not even a little.
We have countless clients who feel like the Google AdWords billing system is overly complicated. We don’t blame them. Why can’t it just be a bill for the same amount on the same date every month—you know, the way practically every other company in existence does its billing?
If we were conspiracy theorists, we’d be tempted to think Google confuses AdWords customers on purpose so they spend more money.
However, we’re realists, and we’ve done our research to crack the code of Google AdWords billing. If you’re as mystified as everyone else about how your account is charged, then this blog post is for you! Keep reading to find out how it actually works.

Your “Daily” Budget Is Not What It Seems

When you first set up AdWords, Google allows you to set a daily budget. When most people hear this, they assume this is the amount AdWords will spend on their ads each day. This is the logical assumption. However, this is not what actually happens.
Instead, Google takes the amount you set for your daily budget and multiplies that number by 30.4. The result is what Google allows itself to spend on your ads for the whole month. So, in effect, when you set a daily budget, you’re really setting a *monthly* budget.

Why does Google use your budget this way?

Because Google can’t 100% predict how much clicks will cost on a daily basis due to the way AdWords bidding works. Thus, it needs to allow for wiggle room in what it spends from day to day. That’s why Google allows itself to increase spending (up to 2 times your daily budget) on any given day, as long as it decreases spending accordingly on other days so that your monthly total evens out in the end.
Google needs this wiggle room because not every day of the week is equal in terms of user behavior. For instance, an ad for something like roof repair is likely to receive more clicks on a weekday than a weekend. This means bids for clicks on certain weekdays will be more expensive because they’re more in demand. Knowing this, Google will loosen the reins on your budget in order to spend more in bids and clicks during the week, and then tighten up on the weekend when your ad isn’t seeing as much action.
In fairness to Google, this strategy does make sense once you understand what it is. However, it also makes your AdWords charges super complicated.
There’s an upside to all this confusion, though. The longer you continue on the same daily budget for the same ad campaign, the more effectively Google will spend your budget. As time goes on, Google will collect enough data to learn the optimal days and times for your ad’s performance, so it won’t have to “guess” your budget on a daily basis. All you have to do is stick with it.

Thresholds and Billing Cycles

Above, we cover how Google AdWords charges your account—in other words, how it spends your budget. Now, we’re going to talk about billing. This is where people really start scratching their heads.
In this context, charging and billing are two separate things. Your charges are what your account has spent on clicks and bids. Your bill, on the other hand, is what Google debits from your credit card. Contrary to most other services you pay for in your normal life, Google doesn’t bill you for your total charges at the end of the calendar month. Instead, it goes by a 30-day billing cycle and bills you every time you hit a certain charge “threshold.” So, you may rack up $670 in charges in the month of January; however, that won’t be reflected in your bill.

Here’s how Google AdWords billing thresholds work:

  • Your starting threshold is $50. Google does this to make sure you can actually pay before you go any further in your campaign.
  • If you spend $50 within your first 30 days, Google bills you immediately and resets your billing cycle. Now, your threshold is bumped up to $200.
  • If you spend less than $50 within your first 30 days, you’ll be billed your exact spend amount at the end of the cycle. Your threshold will remain at $50 for the next 30 days, or until you surpass $50.
  • Next, if you reach your $200 threshold within 30 days, Google bills you, resets your cycle, and raises your threshold to $350. If you spend less than $200, Google bills you for the exact spend amount at the end of 30 days and keeps your threshold at $200 until you surpass it.
  • The process repeats itself for the $350 threshold.
  • The final threshold is $500. Once you reach $500, Google will bill you and reset the cycle, keeping your threshold at $500.

So, instead of just paying what you owe at the end of every calendar month, you’re billed every 30 days OR every time you reach your threshold. This leads us to two important points:

  • Because billing is triggered by thresholds, it’s possible for you to be billed more than once in the same calendar month. This is what messes up a lot of our clients and causes their credit cards to decline.
  • If your credit card declines at any point, your threshold will reset to $50. Then, you’ll have to go through the process all over again. This can wreak havoc on your campaign if it happens repeatedly.

What If You Don’t Want to Pay More Than “X” Amount Each Month?

One obstacle many businesses face is the fact that they have their own monthly budgets in the real world, outside of AdWords. Often, they don’t want to be billed beyond a certain amount in the same calendar month for fiscal reasons. When this is the case, you have to manually pause your campaign as soon as you reach your limit. Otherwise, your charges will continue to accumulate and you might be billed again at the next threshold.
If Prospect Genius is managing your account, we are happy to do this on your behalf. We closely monitor all of the accounts we run, so we will watch your spending and pause your campaign as soon as it gets too close to your personal limit. Then, we’ll resume your campaign once the billing cycle resets.
Google AdWords billing is extremely difficult to understand, and that’s probably not an accident. However, we hope this blog post brings you some clarity and helps you manage your payments in a more effective manner. Good luck!

Could You Be Targeted Next by Google's Aggressive New Filter?

Last Updated: February 15, 2024

Raise your hand if you wish Google would stop making secret updates already! Just when you think you’ve mastered local search, Google launches a change that turns everything on its head. This time, it’s the Hawk update.
This latest update has serious, wide-reaching consequences for small, local businesses like yours. It’s crucial you understand the impact this update could have on your business. That way you can take steps to protect yourself. Keep reading to find out everything you need to know.

First, a Quick Summary of Google’s Hawk Update

At the end of August 2017, local SEO expert Joy Hawkins detected a change in Google’s local search filter. She noticed that Google’s search results had stopped showing certain businesses that used to rank locally. As it turns out, Google was bumping select businesses if they shared a similar category and street address with another business that had a higher ranking.
To be fair, Hawkins notes that this is an improvement on the update immediately preceding it. The previous update (known as “Possum”) applied to any businesses that were even *near* each other. So, if two plumbers were located on the same block, one of them would be filtered out of the results. Thankfully, the Hawk update seems to have rectified that.
Now, the local search algorithm narrows its focus on businesses that share the same street address and category. The intention, Hawkins explains, is “to help ensure that multiple listings for the same company don’t monopolize the search results.” However, it’s having a massively negative effect on many legitimate businesses.

How the Hawk Update Affects You

You might think, “Well, good. That means fewer spammers and impostors.” To an extent, you’d be right. However, lots of local businesses share commercial building space. Moreover, many local service providers (like plumbers, handymen, appliance repairmen, etc.) operate out of their homes and use P.O. boxes and UPS stores for their listings to avoid advertising their home addresses. They’re perfectly legitimate businesses, but their listings are now vulnerable.
In fact, we are seeing Google auto-suspend numerous clients with virtual mailboxes (especially UPS Stores) as soon as we try to verify their listings. This tells us Google is maintaining a database of virtual addresses so it can prevent businesses from using them. Ever since the Hawk update rolled out (and even a little earlier), we haven’t been able to use a UPS Store address for a new client without the listing getting suspended.
If that all sounds too technical, let’s boil it down. Here’s what you need to know: Google’s new update poses a major threat to any business that uses a virtual mailbox. If you use a UPS Store or a similar type of virtual address, Google could bump you from local search results while a competitor remains. According to Hawkins, when there’s more than one business at the same location, “Google picks the most relevant listing of the bunch and filters the rest. It’s very similar to what they do organically with duplicate content.”
But how does Google pick “the most relevant listing”? That, in keeping with Google’s m.o., is a mystery. However, based on past and current trends, we can assume Google makes this distinction the same way it assigns ranking: by looking at a business’s website content, customer reviews, backlinks, and other supporting data.
In short, you may be affected by this latest update if you:

  • Rent space in a commercial building that also houses similar businesses
  • Use a mailbox at a nearby UPS store to avoid listing your private residence
  • Do either of these two things and don’t have an established web presence yet

Needless to say, this applies to a lot of businesses. So, this begs the question: How can you prevent damage to your listing?

How to Protect Your Local Business Listing

There are no guarantees when it comes to Google. However, you can minimize the likelihood of Google filtering you out by making some changes. For example:

  • Just use your home address. This is the best option because, ultimately, this is what Google wants. It wants every business using a physical street address. All signs point to Google only becoming more aggressive with virtual addresses in the future. Biting the bullet and switching to your home address will cause less trouble in the long run.
  • If you really don’t want to use your home address, choose another virtual mailbox that’s not a UPS Store. (We can help you choose one.)
  • Start building your web presence and get more reviews on your listing. Lead Google to view your business as the “most relevant.” This way, it will be less likely to bump you from the search results.

Unfortunately, there’s no quick or easy solution here because every case is so different. Your chances of being filtered out of local search results go up or down depending on your location, industry, and competitors. In other words, the solution can only be determined on a case-by-case basis.
For this reason, our specialists are available to help any business owner who is concerned about the Hawk update. We’ll check out your web presence, analyze your case, and provide you with a sound strategy to minimize damage. Please don’t hesitate to call or email us for help.

Don't Let Pay-Per-Click Turn Into Pay-Per-Search

Last Updated: August 22, 2017

Curious about how your PPC ads look? Googling yourself to check on your pay-per-click campaigns is understandable. However, it’s also ill-advised.
That’s because frequently googling your company can sabotage your AdWords campaign.
Don’t believe us? Keep reading.

How Googling Yourself Tanks Your CTR

Your cost per click is substantially related to your ad’s click through rate (CTR). This is the ratio of passive ad views (impressions) to active ad clicks. If your ad gets lots of views but few clicks, you can end up with a low CTR—and paying a greater cost per click.
Why a greater cost? Because your CTR affects your AdWords Quality Score, and your Quality Score controls how much you pay per click. Google wants to show ads that are interesting to its users: otherwise users may get fed up and choose a different search engine altogether. To make certain ads are as high quality as possible, it relies on Quality Score.

Quality Score and Cost

Your Quality Score is heavily impacted by two factors: CTR and relevance. If either metric is low, it will drive down your Quality Score (and drive up your price per click). Relevance can be addressed by targeting ads using both keyword and location. Click through rate is a bit trickier to fix, though. Under normal circumstances, your marketing agency will test different ad versions to get your CTR as high as possible.
However, you work against your marketing agency’s efforts when you frequently google your company’s name or other search terms to check your ads. This is because frequent searches increase the number of impressions. And since you know that clicking on your ads raises costs, you probably never click. As a result, you’re driving up impressions but not clicks. This leads to a lower CTR for your ad. No amount of testing by your marketing agency can fix it as long as you continue to depress your CTR by googling yourself.
This is where the domino effect starts. Once CTRs are low, your Quality Score follows. As PPCHero explains, “If you have a lot of low CTR ads in your ad groups, they could be contributing to a low Quality Score since AdWords considers all of your ads when calculating your scores.”
Unfortunately, a low Quality Score ultimately results in higher costs for you. The short version of the story is that if you frequently google your company, you’re spiking your own PPC bill!
This isn’t just a theoretical problem. At Prospect Genius, we’ve seen it firsthand. In fact, we had one client snowball their cost per click from $22 to $31!
We don’t want the same thing to happen to you. So if you’re thinking about checking your PPC ads by googling yourself, just don’t!

Stop Tanking Successful Ads

This issue goes beyond cost. When you continually google yourself, it’s not just that you end up paying more money per click for no good reason. You also single-handedly undermine your own advertising. If that doesn’t frustrate you, it should!
You see, PPC, by nature, targets a motivated audience. The searcher is already looking for your product or services, so they are more likely to click when they see your ad. So, when you go the extra mile and actually target your ads to a specific service in a specific area, you get maximum results for minimum cost.
Except when you search for your own ads.
When you’re searching for your own products or services just to “check” on your ad, you can end up substantially warping your results. The more specific an ad, the smaller the number of impressions it’s going to get. Usually, this isn’t a problem because you’re offsetting the low impressions by reaching an audience that’s more likely to click.
But that’s what makes these types of ads especially vulnerable to sudden dips in CTR. Because impressions are already low, you’re relying on a high number of clicks to keep your CTR up. So when you google these ads, look at them, and don’t click, you’re preventing the CTR from growing.
And if an ad’s CTR is low because you’ve been looking at the ad and not clicking, it could spell major trouble. If you’re working with a reputable PPC provider, they monitor your ad performance regularly. So when they see a surprisingly low CTR, they will try tweaking the ad to improve performance. However, nothing is wrong with that ad: the CTR is just low because you’ve been googling without clicking. Ultimately, you’ll be spurring your PPC agency to change an ad that otherwise could have been successful for you!

Safe Ways to Monitor Your PPC Ads

Please note: we’re not saying don’t check on your PPC campaigns. On the contrary. It’s very important to stay updated on how your ads are doing, so you can make informed decisions about your return on investment. But unlike googling yourself, there are ways to check your AdWords campaign without also inflating your costs!
Your best bet is to work with a professional pay-per-click advertising agency that provides clear tracking features. At Prospect Genius, our clients have unlimited access to their account’s call logs, leads, and other reports right in the Client Portal—letting you see your campaign’s performance without having to resort to Google. If you’re not sure what metrics are the most relevant for assessing your campaign, check out this analysis.
Or, if you’re a staunch do-it-yourselfer, you can use the AdWords dashboard to look up your ads’ performance, preview appearance, and more.
At the end of the day, we hope you now recognize that googling yourself can be harmful to your PPC campaign. Do yourself a favor and opt for alternative methods of checking performance instead. Keep your costs down by NOT googling yourself.

Your Website's Ranking Is Not Important

Last Updated: April 28, 2017

We repeat: Your website’s ranking is not important.
That probably goes against everything you previously thought about SEO. However, as Ryan Shelley points out in a recent article on Search Engine Land, there are much more accurate measures of success:

The problem with putting too much emphasis on [ranking] is that the search results aren’t always consistent. Google’s results will vary based on a number of different criteria.

More specifically, ranking only tells you how your site performs when an exact keyword is typed into the search bar. Plus, only 2.8% of all search terms are one-word keywords. This means individual keyword rankings are hardly representative of what people are searching for at large. Additionally, personalized algorithms and geographic location greatly influence ranking, too. In other words, ranking is only relevant to a very narrow, specific set of conditions.
Meanwhile, Shelley says, there are much more pressing metrics you should consider—especially because these other metrics have a greater impact on your bottom line. After all, what’s your end goal? Is it simply to display at the top of the search results for a particular keyword, or is it to attract more customers and increase revenue? Usually, it’s the latter.
Therefore, according to Shelley, you should spend more time and energy focusing on your traffic trends and conversion funnels. This is the kind of data that actually affects your ROI. Ranking is more or less irrelevant.
For a more detailed explanation of this issue, please click over to Search Engine Land and read Shelley’s full article, “The Problem With Obsessive Rank Tracking.”

How Much Money Are You Losing From Missed Calls?

Last Updated: April 20, 2017

Do you even notice your phone buzzing in your pocket or ringing on your desk anymore? Many business owners find themselves tuning out their ringing phones for the sake of their own time, energy, and sanity. After all, an endless stream of phone calls comes with the territory of owning a small business—and a good chunk of the time, they’re useless calls from solicitors. Usually, though, there are a lot of customer calls mixed in there. So if you’re just letting your phone ring and not picking up, you could be losing a bunch of business.
It’s perfectly understandable that you don’t want to tie yourself up talking to telemarketers all day. You’re busy, and you simply don’t have time to waste on unwelcome calls. However, by ignoring all incoming calls, you’re putting yourself at a disadvantage. Rock, meet hard place.
In this post, we’ll look at how missed calls impact your business and what you can do to reduce them. Let’s jump in!

Missed Calls = Lost Money

Did you know that roughly 30% of our clients’ incoming calls go to voicemail? That’s not good, especially when you consider a recent report from Forbes telling us the overwhelming majority of callers hang up as soon as they reach voicemail.
It’s truly unfortunate, particularly because you do have a good chance of turning a caller into a customer: Our proprietary data shows that approximately 60% of answered calls turn into successful sales.
Using these statistics, we’ve broken down roughly how much revenue you’re missing out on by not answering the phone. You can see the numbers in the table below:

Missed Calls and Lost Revenue

Is it safe to assume you don’t want to lose thousands upon thousands of dollars in revenue each year? Then you have to find a way to answer customer calls without wasting all your time on pesky solicitors. If only we had some tips for you…

How to Answer Only the Calls You Want

It actually is possible to answer your customers’ calls without dealing with the annoyance of telemarketers. You have a couple of options:

  • Use a spam-blocking app on your phone that blocks known solicitors. It may not block spam calls 100% of the time, but it will significantly reduce the number you receive.
  • Hire a call answering service to answer your phone for you. They’ll answer all your calls, represent your business with professionalism, and take messages from customers. They may even be able to perform other secretarial duties like scheduling appointments and answering basic customer service questions. This frees you up big time.
  • Stop using your personal cell phone number as your business number. Get a separate line or a forwarding number to use for all of your business needs. This won’t actually cut down on solicitation calls, but at least you won’t be bothered by them when you’re spending time with your family at home.
  • Take advantage of Prospect Genius’s CallTrax line or a similar call-tracking service. You’ll benefit from our extensive list of blocked numbers, which is constantly updated to keep unwanted callers from wasting our clients’ time.

Get an Exclusive Discount on Business Answering Services!

To help business owners solve their problem with missed calls, Prospect Genius has partnered with a company called Professional Answering Service, Inc. Their experienced management and well-trained staff are available to:

  • Answer your phone remotely
  • Dispatch urgent customer calls when needed
  • Take detailed messages
  • Schedule customer service calls and appointments
  • And more!

The best part? Prospect Genius clients have access to Professional Answering Service, Inc. at an exclusive rate! If you think your business could benefit from an affordable answering service, get in touch with us and we’ll help you set everything up.

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