What Does “Limited by Budget” Mean?
The “Limited by Budget” status in Google Ads appears when your campaign could be spending more to capture additional traffic but is restricted by the daily budget you’ve set. In my experience, this can make advertisers nervous, but in many cases, it’s not necessarily a bad thing.
Why It’s Not Necessarily A Problem.
For most campaigns, being “Limited by Budget” simply means there is room to grow. Many successful campaigns run under this status for a long time without any negative impact. The only time “Limited By Budget” can become problematic is if your budget is extremely low relative to your cost per click (CPC). For example:
- If you have a $10 daily budget and your average CPC is $8, the CPC is 80% of daily budget and you’re only getting one or two clicks per day, which limits performance.
- If your budget is in a healthy range relative to your CPC (preferably the ratio is under 20%), you should be able to continue running the campaign without any budget related issues.
Steps to Take If Your Campaign Is Limited by Budget
1. Check Google’s Budget Recommendations
Click on the “Limited by Budget” banner in your Google Ads dashboard. Google will provide recommendations for increasing your budget. Keep in mind that:
- These recommendations can be incremental. They may not be recommending the maximum possible budget based on search volume, but instead recommending an incremental increase they deem as a good next step.
- Google also provides estimates on how other stats like cost per conversion and number of conversions will be affected by the budget increase.
2. Increase Budget Strategically
If you decide to increase your budget, consider taking a gradual approach:
- Instead of jumping from $200 to Google’s recommended $500 for example, try increasing to $300 first.
- Scaling in smaller steps helps monitor performance changes and ensures efficient budget use.
3. Ensure Your Campaign is Properly Configured & Optimized
Before increasing your budget, make sure:
- Conversion tracking is set up correctly.
- Smart bidding strategies (like Maximize Conversions) align with your goals.
- Your campaign structure is optimized to prevent overspending on unprofitable keywords.
We don’t want to be increasing spend on poor campaigns or even campaigns that are average and haven’t yet been optimized.
When to Be Cautious
Raising your budget is generally a safe move, but it can backfire if your campaign settings aren’t optimized. If you’re using smart bidding and conversion tracking isn’t properly set up, Google may aggressively increase bids, leading to unnecessary overspending.
Need Help Scaling Your Campaigns?
Managing Google Ads budgets effectively requires a strategic approach. If you need expert assistance in optimizing and scaling your campaigns, consider my professional Google Ads management services.
By understanding the “Limited by Budget” status and making strategic adjustments, you can turn this potential concern into an opportunity for growth. Stay informed, optimize wisely, and scale confidently!