What Does ‘Limited By Budget’ In Google Ads Mean?
If you see the ‘Limited by budget’ warning next to your campaigns in Google Ads, it means that your average daily budget is lower than the recommended amount.
For example, if you have a click budget of £10 a day and each click costs £1, but there is enough demand for 20 clicks a day, your account would be limited by budget as it is not able to show for all 20 clicks. Google will stop your ads from showing every so often throughout the day so that you only spend the £10 budget that you have set. In this example, you would need £20 a day budget to achieve 100% coverage and to no longer be limited by budget.
‘Limited by budget’ is measured by percentage. If your Search Lost Impression Share (Budget) is 20%, this means your ad could show 20% more often if you had more budget.
If you are still struggling to grasp the understanding, here is Google’s official explanation.
What Is Causing It?
Some Google Ads consultants would simply tell you to increase your daily budget, if the ‘Limited By Budget’ label was showing. Sometimes, this is the best answer, but there is usually a bunch of other things you can do before handing over more money to Google. Over 80% of the Google Ads accounts that I audit are usually limited by budget, so it’s quite a common issue and is easily fixed.
If the campaign is performing really well and you are happy with the cost per conversion that you are currently paying, then there is no reason why you wouldn’t just increase the budget. The problem we have is that it’s usually poor performing accounts that need more budget, so business owners are more reluctant to increase the budget for something that is not working so well.
There are three main reasons why your campaigns are limited by budget:
1. Badly Setup Campaign
Badly set up campaigns are a common cause of being limited by budget. There are simply too many settings for me to run you through them all, but the common ones are keyword match types, lack of regular maintenance and leaving the ad schedule to the default setting of 24/7.
Going back to my example from above, if you have a £10 a day click budget and each click costs £1. But your badly set up campaign is wasting £3 a day, you are only getting £7 worth of relevant clicks. So by cleaning up the wastage and saving that £3 a day, this will increase how often your ads show for relevant search terms and will therefore reduce the ‘limited by budget’ percentage.
Here are a few suggestions:
- Check search terms for anything irrelevant or low quality
- Make sure you are not targeting the display network or search partners
- Check your advanced location settings to only target people within your target locations
- Consider pausing generic keywords that are not converting
2. Too Much Scope
What I mean by this is that you are biting off more than you can chew. By trying to target too much with a small budget, you might be leaving yourself short. For example, if you are a local company, you may have your geo targeting set too big or you may be promoting one too many services/products.
Try pausing a campaign or reducing your geo targeting so that you are not spreading your budget too thin. Focus on getting that one service working before you try and branch out.
For example, to target the whole of England, you may need a budget of £4000 a month. If you only have a budget of £2000 a month, your campaigns will very quickly become limited by budget. Instead, you could try reducing your geo-targeting to only focus on key locations or pause some of your ad groups, as you will be targeting fewer people and will require a smaller budget.
Here are a few suggestions:
- Reduce location targeting
- Reduce the number of ad groups/campaigns you have running
- Put an ad schedule in place to reduce the hours/days that your ads are running
3. Not Enough Budget
This one is pretty much the same as above. But there are a few factors that might put you into either category. If you don’t have additional funds to invest into your PPC campaigns, you need to go back to my advice in point #2 and reduce the scope of your campaigns.
If you are happy to invest more budget into your campaigns and they are performing well, then you will most likely fall into this category, so you may just need to add more budget. As I said previously, if you are happy with the cost per conversion and there are no other improvements to be made, steadily increase the budget and monitor the performance. There’s only one suggestion for this tip:
- Increase budgets gradually while keeping an eye on your cost per conversion
If you are not sure which one of these issues is causing the problem, get yourself booked in for a PPC audit service and I can get you on your way, or do it yourself by following our PPC audit checklist.