What is the Difference Between Daily Budget and Cost per Day Goal?

Sometimes the daily budget gets mixed up with the cost per day or the other way around. I will explain exactly how they are different from each other using a practical example.

The example is based on Amazon Sellers Central, but the dynamic works in the same way in Amazon Vendor Central and other platforms: eBay Ads, Google Ads and Microsoft Advertising.

Let's start off with the definition of both expressions:

The value is distributed among all campaigns within a Performance Group.

Now I will continue with a practical example to explain the differences between both terms and their functionalities.

In your advertising platform you create advertising campaigns. Then you dedicate a daily budget for each campaign.

In our example, the advertising platform is Amazon Seller Central. There, we have several advertising campaigns. Each campaign has its own daily budget. For example, a campaign "Chocolate cake!!!" has a daily budget of 400€.

In Adspert, things work differently. You group several advertising campaigns together into a Performance Group. Then you set one goal for the entire Performance Group. Therefore, the goal is set for the performance Group instead of one single campaign.

In our example, a Performance Group named “Baked goods” has a cost per day goal of 1900€. The Performance Group “Baked goods” contains three advertising campaigns.

Performance Group “Baked goods”:

All campaigns within the Performance Group “Baked goods” share the same goal: cost per day goal of 1900€.

Here is the catch: our smart AI does not divide 1900€ into three equal parts. It will divide the ad spend so each campaign will maximize your revenue.

In practice, three campaigns never perform exactly the same. That is why it doesn’t make sense to split the ad spend equally, but according to each campaign’s performance.

As long as the total, combined cost per day is not higher than 1900€.

All your three advertising campaigns are running: Chocolate cake, Plain crackers and Wholemeal bread. Our smart AI notices that the "Chocolate cake" campaign is getting more conversions than the other two campaigns. Not really a surprise that chocolate cake sells better than plain crackers, right?

So, our smart AI recognizes the potential of the “Chocolate cake” campaigns”. Based on the data, our AI notices you could get even more conversions if you invest a greater proportion of your daily ad spend into this campaign.

Let’s revise: “Chocolate cake” campaign has a daily budget of 400€ set in Amazon Seller Central. Its current cost per day in Adspert is 396€.

Our smart AI advices you to raise

Our smart AI calculated that you could get even more conversions if you would spend a bit more, 520€ per day. Then our AI would spend 520€ per day for the “Chocolate cake” campaign and less for the other two campaigns to still reach the Performance Group’s cost per day of 1900€.

BUT that is not possible.

Why? Because 520€ daily ad spend for the “Chocolate cake” campaign conflicts with the current daily budget in your amazon seller central account (or equivalent if you use Google Ads, Bing or Ebay).

We can’t (and don’t want to) override your settings in Amazon Seller Central. The daily budget setting is one of them. Our smart AI will notify you and send you a budget suggestion, but you have the last word if you change the daily budget or not.

Click “Reports” from the main navigation bar and select “Budget Suggestions” from the drop-down.

Here you will find a list of all your campaigns where our smart AI suggests to raise the budget to assure the campaign can be displayed the entire day and the daily limit will not be reached.

Besides your current daily budget set in Amazon Ads, you can see our AI’s Budget Proposal.

Plus you can also check:

We display all this information to help you make an informed decision - whether you decide to change your campaign’s daily budget or not.

Go to your advertising platform and find the advertising campaign in question. Then adjust its daily budget.

Or to round off our example: if you want to get more conversions for the “Chocolate cake” campaign, you need to go to Amazon Seller Central and adjust its daily budget from 400€ to 520€.

If not, you can leave the daily budget as it is. You will still get conversions, but not as many as you could have if you raised the budget.

Remember when you were a kid and your mom would send you to the store?

Imagine your mom gives you 10€. She tells you to spend 8€ on vegetables and only 2€ on candy.

You have a sweet tooth and you would like to buy more candy for 4€ instead of 2€. But you still need to bring home the vegetables … and you don’t want to make your mother angry, so what do you do?

You kindly ask your mother to increase your candy budget from 2 to 4€ AND ask her if it is ok to spend 6€ on vegetables instead of 8€.

Because your mother is glad that you asked her first, she allows you to spend 6€ on vegetables and 4€ on candy.

At the end of the day, the total amount of money spent is still 10€, but you spent less on the vegetables and more on the candy (lucky you!). Remember: before you could change the distribution of costs, you had to ask your mother and she needed to confirm it!

The same happens when you get a budget suggestion from Adspert. Our smart AI asks you to increase the daily budget of a specific campaign so you could reach even better results. It is completely up to you if you go for it or not.

In addition, when you change the daily budget of an advertising campaign, this won’t affect your Performance Group goal. That one still remains the same, but the allocation of the spending within the Performance Group changes.