In Google Ads, budget management is crucial for controlling advertising spend effectively. There are two primary budget types: Daily Budget and Shared Budget.
**Daily Budget**
A daily budget is the average amount you're willing to spend per day on a specific campaign. Google may spend up to twice…In Google Ads, budget management is crucial for controlling advertising spend effectively. There are two primary budget types: Daily Budget and Shared Budget.
**Daily Budget**
A daily budget is the average amount you're willing to spend per day on a specific campaign. Google may spend up to twice your daily budget on high-traffic days to maximize results, but will balance this over the month so you never exceed your monthly charging limit (daily budget × 30.4 days). Each campaign has its own individual daily budget, giving advertisers granular control over spending for different products, services, or marketing objectives. This approach works well when campaigns have distinct performance goals or require separate budget allocation based on priority.
**Shared Budget**
A shared budget allows multiple campaigns to draw from a single budget pool. Instead of setting individual daily budgets for each campaign, you create one shared budget that Google Ads automatically distributes across all linked campaigns based on their performance and opportunity. This is particularly useful when managing numerous campaigns with similar goals or when you want Google to optimize spend allocation automatically. Shared budgets help ensure that high-performing campaigns receive adequate funding while preventing underperforming campaigns from consuming unnecessary resources.
**Key Differences**
1. **Control**: Daily budgets offer precise control per campaign; shared budgets provide flexibility across campaigns.
2. **Management**: Daily budgets require individual adjustments; shared budgets simplify management for multiple campaigns.
3. **Optimization**: With shared budgets, Google reallocates funds to campaigns with better opportunities throughout the day.
4. **Use Cases**: Daily budgets suit campaigns with specific spending requirements; shared budgets work best when overall performance matters more than individual campaign spend.
Choosing between these options depends on your advertising strategy, the number of campaigns you manage, and how much control you need over individual campaign spending.
Daily Budget vs Shared Budget: A Complete Guide
Why This Topic Is Important
Understanding the difference between daily budgets and shared budgets is fundamental to managing Google Ads campaigns effectively. This knowledge directly impacts how your advertising spend is distributed, how campaigns perform, and ultimately, your return on investment. For the Google Ads certification exam, this topic frequently appears in questions about account structure and budget management.
What Is a Daily Budget?
A daily budget is the average amount you're willing to spend on a specific campaign each day. Each campaign has its own individual daily budget, giving you granular control over spending at the campaign level.
Key characteristics of daily budgets: • Set at the individual campaign level • Provides precise control over each campaign's spend • Google may spend up to 2x your daily budget on high-traffic days • Monthly spend will not exceed your daily budget multiplied by 30.4 • Ideal when campaigns have different priorities or performance goals
What Is a Shared Budget?
A shared budget is a single budget that is distributed across multiple campaigns. Google Ads automatically allocates funds from the shared pool to campaigns based on their potential to drive results.
Key characteristics of shared budgets: • One budget serves multiple campaigns simultaneously • Google automatically distributes funds where they're needed most • Simplifies budget management for advertisers with many campaigns • Found in the Shared Library section of Google Ads • Best for campaigns with similar goals and priorities
How Daily Budgets Work
When you set a daily budget of $50 for a campaign, Google uses this as an average target. On days with higher search volume or better conversion opportunities, Google might spend up to $100 (2x the daily budget). On slower days, it will spend less. Over the course of a month, your total spend will balance out to approximately $1,520 ($50 x 30.4 days).
How Shared Budgets Work
With a shared budget, you create a budget pool in the Shared Library and assign multiple campaigns to it. If you set a shared budget of $200 per day across four campaigns, Google will distribute that $200 based on which campaigns have the most opportunity at any given time. A campaign with high-performing keywords might receive more of the budget, while underperforming campaigns receive less.
When to Use Each Budget Type
Use Daily Budgets When: • Campaigns have vastly different priorities • You need strict spending control per campaign • Campaigns target different products, services, or regions with separate budgets • Performance varies significantly between campaigns
Use Shared Budgets When: • Managing many campaigns with similar objectives • You want to maximize overall account performance • Campaign performance fluctuates and you want flexible allocation • Simplifying budget management is a priority
Exam Tips: Answering Questions on Daily Budget vs Shared Budget
1. Remember the location: Daily budgets are set at the campaign level, while shared budgets are created in the Shared Library.
2. Focus on automation vs control: Questions often test whether you understand that shared budgets offer automatic distribution while daily budgets provide manual control.
3. Know the 2x rule: Google can spend up to twice your daily budget on any given day—this applies to both budget types.
4. Watch for scenario questions: If a question describes an advertiser wanting to simplify management across similar campaigns, shared budget is likely the answer. If they need precise control, daily budget is correct.
5. Understand the trade-offs: Shared budgets sacrifice individual campaign control for overall efficiency and simplicity.
6. Monthly calculation: Remember that monthly spend equals daily budget multiplied by 30.4 (average days per month).
7. Read carefully: Exam questions may include details about campaign priorities or management preferences that indicate which budget type is appropriate.