How to Know When to Increase Your Google Ads Budget

Most people panic when they see a red warning in Google Ads, but it might actually be the best news you get today. In episode 119 of the Inside Google Ads podcast, host Jyll Saskin Gales explores a scenario that most advertisers dread: seeing the red "Limited by Budget" warning in their account. Using a real client case study as an example, she dives into why this status appears, how to distinguish between a helpful suggestion and a critical performance bottleneck, and the specific metrics you need to check before touching your daily spend. This episode provides a clear framework for deciding when to boost your budget, and when to fix the root cause of your performance issues first.

Key topics discussed:

• Why the "Limited by Budget" warning can actually indicate a massive growth opportunity.
• The difference between the yellow recommendation warning and the red status warning.
• How to use Search Impression Share to identify untapped potential.
• The specific rules for evaluating Target CPA and ROAS.
• A step-by-step guide to scaling a budget safely without causing campaign performance to go wonky.

You can get Inside Google Ads episode transcripts delivered to your inbox each week, and sign up for Jyll's free bi-weekly newsletter - The Insider - at https://free.jyll.ca/?utm_source=podcast&utm_medium=referral&utm_campaign=episode119

Google Ads Coaching
Need some expert help with your Google Ads strategy or optimizing your campaigns? Book a call with Jyll! Learn more at https://jyll.ca/pages/google-ads-coach?utm_source=podcast&utm_medium=referral&utm_campaign=episode119

Inside Google Ads course
Join 400+ marketers like you who are mastering Google Ads with Jyll's Inside Google Ads membership course. You'll get exclusive access to JyllBot, and you can meet top industry experts at an exclusive live video call every single month. Learn more at https://learn.jyll.ca/iga?utm_source=podcast&utm_medium=referral&utm_campaign=episode119

Read more about this topic on Jyll's Google Ads Blog
When "Limited By Budget" is a Good Thing https://learn.jyll.ca/newsletters/the-insider/posts/limited-by-budget-google-ads?utm_source=podcast&utm_medium=referral&utm_campaign=episode119

What should I do when my Google Ads campaign is limited by budget? https://learn.jyll.ca/blog/what-should-i-do-when-my-google-ads-campaign-is-limited-by-budget?utm_source=podcast&utm_medium=referral&utm_campaign=episode119

What happens if Google Ads spends more than my budget? https://learn.jyll.ca/blog/what-happens-if-google-ads-spends-more-than-my-budget?utm_source=podcast&utm_medium=referral&utm_campaign=episode119

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Transcript

“We've got some campaigns limited by budget. I hope that's good news.”

Chris looked at me. He is a lawyer and a regular Google Ads coaching client of mine, and I'd already taught him why we don't want our Google Ads campaigns to be limited by budget. 

So Chris replied, “Before we move on, you said right away that it might be good that these campaigns are limited by budget. Why did you say that?”

Why did I say that?

I'm your host, Jyll Saskin Gales. I spent six years working for big brands at Google, and now I work for you. 

This is Inside Google Ads: Episode 119, When Limited is Good.

Chris's goal was to get more leads from Google Ads. I'm sure you have a similar goal. In working together over multiple coaching calls, we had restructured the account to have Exact Match rather than Broad Match keywords, intent-aligned ad groups, and we were using Target CPA bidding.

The reason I said that the red “Limited by Budget” warning might be good news is because Google Ads will give you that warning when your ads are near your CPA or ROAS goal, and you've lost Impression Share due to budget.

We were at the start of the call when I made this comment. So before even looking at the Cost / conv. column or the Search Impression share columns, I guessed we must be doing pretty well if the campaign is telling you it's limited by budget, meaning there's more opportunity to be had here.

Was I right? 

Sure enough, Chris was hitting his CPA goals and there was plenty more Impression Share to be had. So he had it easy! All he had to do was increase the budget and then he could achieve his goal of getting even more leads for his law practice at the current cost per lead. 

This is in contrast to some other lawyers I've coached recently. I have quite a few lawyers in my Google Ads coaching practice who already have 60% to 80% Search Impression share. Even though they want to get more leads out of Google, there's just not more leads to be had. There are only so many people searching for their keywords in their target location, and they're reaching most of them already! In these accounts, growth means expanding their keyword set or their location targeting, which means accepting a higher cost per lead in exchange for that growth.

Now you may be asking, but why is being limited by budget normally a bad thing anyway?

Think of it like this. Let's say you're going to run a race. And yes, I came up with this analogy, not AI, so stay with me! You start sprinting towards the finish line, but after a few minutes, when you're only halfway through the race, someone sucks all the oxygen out of the air…

You would collapse. You would not be able to finish that race. Even if you were on track to beat your time, you had the perfect form and the perfect shoes on, and it was the perfect day, you would not be able to finish without oxygen. You would fail. 

And that's what happens with a campaign that's limited by budget. It starts the day humming along, optimizing millions of signals, trying to get you the best results. And then all of a sudden it runs out of budget. You suck the oxygen out of the air. It can't reach that finish line. It will not perform as well as a campaign that's fully funded, like a runner that has plenty of oxygen to fuel them all the way to their goal, the finish line.

Now remember, if you see a yellow “Limited by Budget” warning, that's just a Google Ads recommendation with fancy clothes on. You can ignore it. But a red “Limited by Budget” warning means there's a genuine performance issue happening. 

So here's what you can learn from Chris when you see that red “Limited by Budget” status. 

First, check your Impression Share. Specifically, look at Search lost IS (budget) over the last 30 days and the last 7 days. If it's at least 10% lost, then a budget increase can help increase volume. But remember, this column is only meaningful for manual bid strategies and target bid strategies, not Maximize bid strategies. My advice here is different for Max Conversions or Max Conversion Value. I've spoken about it in other episodes.

Next, verify your CPA or ROAS. If you are indeed missing out on impressions due to a limited budget, check to see if your actual CPA is within plus or minus 10% of your Target CPA, or if your actual ROAS is within plus or minus 10% of your Target ROAS - keeping conversion lags in mind.

If you're exceeding your goals, then boost that budget, baby! But if you're not meeting your goals, try to fix the root cause of that problem before making budget adjustments.

And then finally, if both of the above are true, you're losing Search Impression Share due to budget, and you're meeting your Target CPA or Target ROAS goals, then your campaign is essentially begging for more fuel. Increase your budget to get more leads at a similar ROI. If you're worried about things going wonky, then adjust your budget in 10% to 20% increments, wait a week or a full conversion cycle, and then reevaluate.

And of course, if you need help scaling your Google Ads campaigns, you can book a call with me and we'll get your account growing at jyll.ca that's J-Y-L-L dot C-A or follow the link in the episode description.

This story was originally published in my bi-weekly free Google Ads newsletter, The Insider. If you want to join my more than 9,000 subscribers getting a real Google Ads case study in your inbox every other week you can sign up via my website, learn.jyll.ca. That's J-Y-L-L dot C-A or follow the link in the episode description.

Be sure to tune into this podcast next week. I will be at Brandcast in New York City. That's an annual invite-only event where Google shares the biggest innovations coming for YouTube advertisers. So while I won't know what the new announcements are yet by the time the episode comes out, I'm staying on theme and I've got a full episode for you about Video campaigns versus Demand Gen campaigns. It's one of my favorite topics these days. You won't want to miss it!

I’m Jyll Saskin Gales, and I'll see you next time Inside Google Ads.