<< INDEX

Chapter 4

Costs and Billing

Cost Control

How AdWords Controls Costs

• Google rewards high quality accounts
• Your Daily Budget must always exceed your CPC or CPM bid
• Choose between standard and accelerated delivery of your ads
• Standard Delivery shows ads smoothly throughout the day
• Accelerated Delivery shows ads until the budget is reached
• Google may “overdeliver” your ad up to 20% more than your daily budget to make up for days when the budget was not met
• If Google exceeds your monthly budget you will receive a credit
• Preferred CPC bid allows you to set an average amount you want to pay, rather than the maximum amount
• Content Bids are available for keyword targeted campaigns and allows for different bids on the content and search networks
• AdWords reduces your costs with the AdWords Discounter and “Smart Pricing”
• Discounter reduces your cost to the minimum amount needed to win your spot, works all the time, and causes your actual CPC or CPM to be lower than your maximum bid
• Smart Pricing works all the time and reduces the price you pay for a click on the content network if data shows it is less likely to turn in to an actionable business result

Billing Cycle

Basic Billing Process

• All accounts are subject to a one time $5 activation fee
• The amount billed may be more than the credit limit since ads do not stop running between the time the billing cycle is triggered and the time the charge is completed.
• Prepay and Postpay options depend on your address and chosen currency
• Prepay – pay in advance of receiving clicks and Google deducts from your balance
• Postpay – you pay only after users click on your ads and you accrue charges
• Billing occurs every 30 days or when the account reaches its credit limit
• The Google billing threshold gets raised each time an account reaches its credit limit within a 30-day period
• The initial credit limit of $50 is raised each time an account reaches its credit limit within a 30-day period and the charges are paid.
• Credit limit increases from $50 to $200 to $350 to $500

Billing Details and Issue Resolution

• The Billing Summary page differs for prepay and postpay accounts
• Prepay will show balance remaining
• Postpay will how balance due
• Pending charges are advertising costs accrued since the last time you were billed and can be viewed on the Billing Summary page under Outstanding Balance
• Invoice Details page will show charges broken down by campaign as well as billing adjustments like invalid click credits
• If a payment is declined, Google suspends advertising for that account until payment is received

Payments Outside The U.S.

Payment Options

• Advertisers may not switch between Prepay and Postpay options
• Google Postpay options include Debit card, Direct Debit, and Credit card
• Using Direct Debit allows Google to withdraw accrued charges directly from your bank account
• Google accepts Visa, Mastercard/ Eurocard, American Express, and JCB
• Google Prepay options include Bank Transfer only
• When Google receives your bank transfer funds you will receive a confirmation email and your ads will start running

VAT or EU Advertisers

• European Union Value Added Tax = EU VAT
• Customers living in the European Union, with exception to Ireland, must self-assess their VAT charges
• All European Union advertisers are effected by the VAT tax
• Advertisers enter their VAT registration numbers upon account creation
• An advertiser that does not submit a valid VAT number will be charged the Irish VAT rate

Invoicing

Invoicing Basics

• Advertisers that meet Google’s requirements may apply for Credit terms and monthly invoicing
• Advertisers on monthly invoicing must pay each invoice by credit card, check, or wire transfer
• To qualify for invoicing, an advertiser must spend at least $1,500 per month for 3 months and have an established credit history with AdWords
• Once on invoicing terms, the advertiser’s campaigns are no longer subject to suspension if a credit card is declined
• Credit terms are determined at Google’s discretion
• In order to receive credit terms and monthly invoicing you must submit a credit application and in some cases, additional documentation
• If approved, you will receive an offer of credit terms via email
• Upon accepting Google’s credit terms, you will need to confirm billing information and your account will be switched to monthly invoicing

Terms to Know

Standard Delivery – shows ads smoothly throughout the day
Accelerated Delivery – shows ads until the budget is reached
AdWords Discounter – reduces the cost of CPC or CPM to the minimum amount needed
Smart Pricing – reduces the price you pay for a click on the content network that is less likely to turn into a sale
VAT – Value Added Tax

<< INDEX

Chapter 1: Introduction to AdWords
Chapter 2: Getting Started with AdWords
Chapter 3: Targeting
Chapter 4: Costs and Billing
Chapter 5: Tracking Ad Performance
Chapter 6: Optimizing Ad Performance
Chapter 7: The Adwords Toolbox
Chapter 8: Google Analytics
Chapter 9: Managing Client Accounts


Back to Naper Solutions