Steps to Prevent Google Adwords Overcharge

Posted at July 2, 2011

Having never used Google Adwords before till recently because I was presented with a $100 free coupon upon registering– I decided to give it a go.  The entire process is not exactly clear and could be confusing for rookies when it comes to Adwords.

It came with a lot of confusion that could easily lead to your account being overcharged as many people do not realize how quickly your balance accumulates. Within 10 minutes of my account being active, I’ve accumulated a balance of $6.34 with a $0.19 CPC. I think I refreshed the page just once…

• Choose Manual Payment when signing up. When you sign up to activate your billing information before your campaigns are activated, you’re presented with the Automatic Payment (postpay) or Manual Payment option. Unfortunately this can’t be changed after your account is set up. Automatic Payment will of course, bill you automatically once your account reaches a $50 balance or after 30 days, whichever comes first. That means for those if you using a coupon or voucher, you will be automatically charged from your credit card or bank account after you have used up your coupon– with no notification.  If you chose Manual Payment which is prepay, your campaigns will stop automatically after all your funds have been used up which results in no overcharges other than what you’ve initially put into your account.

• Pause or Delete your campaign in time. If you chose Manual Payment, make sure you keep a close watch on your account. If you do not want to be charged more than your voucher credit or the funds available in your account, make sure to pause or delete the campaign once your balance is close to your threshold. (Do this at least 3 hours before as the results being displayed isn’t in real time and you may actually have a higher balance than what is being shown so there is still a chance on going over.)

• Set an “end date” for your campaign This is especially for those using Adwords vouchers. If you have a $100 voucher and only wish to use the funds from the voucher, an example of what you could do is set your maximum daily spending to $15, and then choose an end date five days from the day you started the campaign. $15 x 5 = $75. Why only $75? Because if you look carefully, it actually states that your daily spending may actually peak 20% above your set daily budget for maximum potential for your ad. So without knowing, your budget is actually higher than what you set it to be which could lead to over charging if you do not monitor your account closely. Setting it at $15 for a $100 coupon should be safe.

Note: There is a $5 sign up fee once your campaign is activated. This will be billed towards your credit card or bank account if you chose Automatic Payment (postpay)… but if you chose Manual Payment (prepaid), it’ll be deducted from your coupon (if you have one). *Not 100% sure on this but it was what I was advised.

Overall, it is safer to do prepaid manual payment unless you’re a long term ongoing advertiser– which is obviously what the Adwords system is set up for.

I’ve heard countless stories on distressed advertisers logging onto their account after months to see accumulating balances of $450 or $600 and more and they have no idea where it came from. Many of these people  created an account using the $100 adwords coupon and did not realize they had to pause or delete their campaign to stop Google from charging your credit card or bank account after your coupon balance has used up.

It’s also not to the advertiser’s benefit that the Automatic Payment option is listed as “recommended” as new users/rookies will of course choose this option and often they’re not looking to use Adwords for a long term run or is only experimenting as a trial experiment.

Make sure you’re well aware of how the program works and what not before creating an account and submitting your billing information!