How Does Billing Work Inside Google Ads?

Google Ads' billing can be complex. Understand how the billing system works and how Google spends your money!

How Does Billing Work Inside Google Ads?

Spending your money efficiently is one of the key components of running a successful advertising campaign, especially when it comes to Google Ads, and especially when you are in a competitive industry where advertising is more expensive (like the legal sphere).

We get new clients all the time who are unsure what their monthly budget should be. That is understandable, if you are unfamiliar with Google Ads, and our recommendations will vary based on the average cost per click and cost per lead for your particular legal specialty. But we do not know all of the financial aspects of your firm, and we should not be the ones determining the budget for you; in order to make data-driven decisions about how much to spend on Google ads, you need to understand how Google spends your money and how they bill you for clicks. However, Google’s billing is notoriously confusing.

Empirical360 is a Google Premier Partner, which means that Google has recognized our agency as belonging to the top 3% of marketing agencies worldwide. We know what it takes to create a properly structured Google Ads account, and because we are experts in our field, we also know how to simplify and explain the technical aspects of search advertising to clients who are new to Google Ads.

How does Google spend your money?

Google reserves the right to charge you up to 2x your average daily budget amount to account for fluctuations in searches. This surprises many clients who set their budgets high and then are shocked to see that Google has spent more than the client “allowed” them to. It is always important to factor that into your budget decisions. However, you can rest assured that in a given billing period, you are never charged “more than the number of days in that billing period multiplied by your average daily budget”. Google ensures that if you set an average daily budget of, lets say, $100, and you are charged for a 30-day billing period, you will not pay more than $3,000.

How does Google’s billing system work?

You need to first set a daily budget amount in Google Ads. This is NOT the amount that will be spent on your ads each day (which would be too simple, right?). Google takes that daily budget amount and multiplies it by 30.4, which becomes your monthly budget.

Google does guarantee that they will hit your budget within a 30-day window; if they do not spend enough to reach your monthly budget, you are credited that money back.

For most accounts, Google bills you incrementally (you don’t have to prepay for your ads because PPC is different from buying media). Depending on how much you are spending, they will set a threshold for your account - only when you meet that threshold will Google bill you. For example, if they set a threshold of $150 for your account, every time you spend $150, they bill you.

If you pause your advertising for any reason, and there is a balance remaining, Google will charge you for that balance if it is not used within 30 days.

When you do not want to be billed beyond a certain amount in the same month, you can manually pause your campaign when you reach the threshold, otherwise you will continue to spend and be billed at the next threshold.

If you are an Empirical360 client, we can manage, pause, and oversee your account spending and billing for you. We can also help you understand what your budget should be depending on your focus area! Contact us today to discuss your Google Ads account and legal marketing strategy.

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