Neetu Kurian from Google posted a detailed question and answer thread on the topic of AdWords Express monthly budget concerns in the Google Places Help forums.
I don't see this posted elsewhere, so I figured I bring this to light to many of you who are participating in this program.
Here is Kurian's post:
1. What is Monthly Budget?
Your monthly budget is an amount that you set for each of your AdWords Express ad to specify how much you'd like to spend each month. And, your monthly budget will ensure that in a calendar month you don’t accrue costs more than the set monthly budget. So if you have set a monthly budget of $X for your AdWords Express ad, you can be assured that in a calendar month (say June, July etc) you will not accrue costs more than $X.
2. The factors that determine the recommended monthly budgets
Regarding the recommended monthly budgets you see in your AdWords Express account, please know that these budgets are recommended by the system based on factors such as the competition in the category you have created your AdWords Express ad for in the local area you target, dynamic nature of search traffic etc and our system also ‘estimates’ the number of clicks your ad may receive for each of these recommended budgets. Please note that these are just estimates and your actual ad performance may vary.
While we strongly recommend our advertisers to choose a budget equivalent to one of the recommended budgets, please be assured that you can also choose a monthly budget of your choice and comfort.
3. Implications of low budget
If you have chosen a low budget for your AdWords Express ad, it is possible that your ad may stop running before the month actually ends. This is because with a low budget, our system will not have enough funds to show your ad throughout the month and in such instances, our system may automatically ‘pause’ or ‘end’ your AdWords Express ad to ensure that you do not accrue costs more than your monthly budget. However, please be assured that our system will automatically resume your ad serving the beginning of next month with your whole monthly budget.
4. Pro-rated budget in AdWords Express
Do keep in mind that the monthly budget for an AdWords Express ad is pro-rated in the following scenarios:
(a) When you activate your AdWords Express ad during the course of the month
In this case, please keep in mind that your effective monthly budget will be calculated based on the day you activated your AdWords Express ad. So, for instance - if you activated your AdWords Express ad on 15th May and your monthly budget was set to $100, then only half the monthly budget will be available for the rest of May which is $50 and if this $50 gets exhausted by, say, May 26, your AdWords Express ad will stop running with us for the rest of the month (May 26 - May 31). But, however please be assured that our system will automatically resume your ad serving next month with your whole monthly budget of $100 (in this example).
So for AdWords Express, please note that if the campaign is active for only half the calendar month, then only half the monthly budget will be available.
(b) When you change your monthly budget in the middle of a month
In this case, please know that if you change your budget in the middle of a month, the maximum amount that you'll be charged for the month changes from your previous monthly charging limit. So if your new budget is higher than your current monthly accumulated spend, you'll be charged at most, your current spend plus a prorated value of the new budget from the date of change to the end of the month. And if your new budget is lesser, we may stop serving your ad for the rest of the month. But, please be assured that our system will resume your ad next month, with your whole new monthly budget.
5. Points to keep in mind while choosing your monthly budget
(a) Recommend monthly budgets: As already mentioned, please know that the system recommends three different monthly budgets based on factors such as competition in the category you have created your AdWords Express ad for, dynamic nature of search traffic etc. While we strongly recommended our advertisers to choose a budget equivalent to one of the recommended budgets, you can also choose a separate budget based on your comfort level and choice.
(b) Competition in the category you have created your ad for in the local area you target : If you are creating your AdWords Express ad for very competitive online industries such as ‘Insurance’, ‘Real Estate’ etc and if these industries are also very competitive in the local area you target, then you may want to consider choosing a higher budget to ensure that your ad receives the maximum traffic possible.
(c) Desired traffic: If you want the maximum exposure for your AdWords Express ad and if you are looking for a lot of ad traffic, then it is always recommended to choose the highest recommended budget for your AdWords Express ad. This is because with higher budget, the system has more space to push your ad’s position and performance by showing it to more potential users.
Instead, if you are just experimenting with AdWords Express - you can start with the lowest recommended budget and keep adjusting your budget as and when you desire and also based on your ad performance. But, always keep in mind that lowering your budget may restrict your ad visibility and traffic.
6. How to edit your monthly budget
If you wish to edit your monthly budget, here are the steps you need to follow:
1. Sign into your AdWords Express account at http://adwords.google.com/express/ 2. On the Home tab, select your business from the drop-down menu. 3. On the righthand side of the page, click Manage your ads. 4. Under "Maximum monthly budget", choose one of the recommended budgets or enter your own budget. 5. Click Save and continue when you’re done.
Forum discussion at Google Places Help.