Adwords Pre-pay option is being phased out across all UK Adwords accounts, having started disappearing in some countries as early as mid-2012.
Yesterday we noticed that some new accounts that we were setting up didn’t offer us the choice of manual payments, only giving the Automatic payments option. Talking to Google confirmed that the reason this was so is because over the coming weeks and months, all Adwords accounts will be migrated to the automatic (post-pay) billing option.
For many advertisers who want to tightly control their budgets, this isn’t great news. Many of our clients put in a fixed amount to their Adwords accounts each month, knowing that they’re spending a certain budget on Adwords and nothing more. This isn’t possible anymore as payments will automatically be taken, even if the cost exceeds the budget they had for the month.
Google’s goal for this? Undoubtedly higher ad spend. No longer will accounts run out of budget, instead they’ll continue drawing money from the primary payment method. As a result, all ad campaigns will continue spending the bid amount on each click, rather than a diminishing budget as the spend starts to run out. With more advertisers still advertising (no one runs out of budget) and paying their bid amount, we expect overall advertising cost to increase slightly.
Great move by Google, kinda sucks for smaller advertisers. And yet another reminder of the importance of a broad customer attraction strategy rather than relying solely on any one advertising method.