Now that Francis has showed you how to set up AdWords and BingAds accounts, let's dive into how to pay for your ads and why you might chose each option. There are three primary billing options available for AdWords and BingAds.
Prepay
How Does Prepay Work?
Advertisers are required to deposit funds into their account(s) prior to launching their advertising campaigns, creating a positive balance. The cost of clicks is then deducted from that balance as clicks accrue. Money can be added at any time and in any amount, and ad spend will continue to be debited from the balance as clicks occur.
While advertisers should be notified if their balance is running low, it is important to note that ads will stop showing immediately if an account runs out of billing funds. Since back-up credit cards are not allowed, it is highly recommended to check account balances regularly to ensure enough funds are available. If you notice that your account isn't receiving any impressions and there aren't any disapprovals or other alerts, check billing; you might just find that you've run out of money.
Payment
Google AdWords payments may be made via credit/debit card (updates your account balance instantaneously) and bank transfers (may require 5-10 days to process). If advertisers decide to stop advertising part-way through the month, the remaining balance will be refunded as a credit to an authorized bank account or credit card.
BingAds prepaid payments can be made via credit/debit card, PayPal or with advertising credit.
Why Choose Prepay?
Prepay is desirable for advertisers who want complete control over when their account is charged and for what amount it is charged.
Postpay
How Does Postpay Work?
Advertisers are charged for clicks that have accrued over the last 30 days or whenever the billing threshold is reached, whichever comes first. Billing thresholds are determined by account per credit limit and account payment history.
- AdWords billing thresholds start at $50 then increase to $200, $350 and cap at $500. It is possible that the billing amount will exceed the threshold if the account generates costs quickly. At SEER, it's not uncommon to see higher-spend clients on postpay receive $600 and $700 charges on their accounts.
- BingAds billing thresholds start at $50 and then increase when three consecutive timely payments are made; the process is then repeated until the maximum threshold level of $2,500 is reached.
Payment
Google payments may be made via credit/debit card and direct debit (Google deducts the payment amount directly from your bank account). It is highly recommended to include a back-up credit card in case the primary card is declined; this will help ensure payments aren't declined and will keep ads running.
BingAds payments can be made via credit/debit card and PayPal. As noted above, BingAds accounts will be billed when you hit your account's billing threshold or on your billing cycle start date, whichever comes first. Billing cycle dates correspond to when your account is created. For instance, if your account is created on February 22, your billing cycle date is the 22nd day of every month. As such, your account will be billed on the 22nd day of every month unless your billing threshold is reached prior to the 22nd day of the month. Billing dates cannot be changed.
Why Choose Postpay?
Postpay is appropriate for advertisers who do not want to worry about manually replenishing their account's balance as you would with prepay. Additionally, postpay mitigates the risk of ads shutting down due to rejected charges.
Invoicing
How Does Invoicing Work?
With invoicing, advertisers will receive a monthly invoice via email with details on when and how to pay. Payment terms vary based on the amount of the credit line and individual creditworthiness.
Advertisers should contact a customer support representative to get set up with invoicing. AdWords and BingAds will check advertisers' credit and sometimes may ask for references. As it can be difficult to get approved for invoicing without a large enough budget (especially on AdWords), some advertisers may have to opt for postpay.
- For BingAds, upon approval, a credit line will be determined and an insertion order (IO) will be sent. An IO is the maximum amount an advertiser can spend, just like a limit on a revolving credit line at a bank. It's an authorization, but not a requirement, to spend up to a certain amount on BingAds.
- While AdWords has credit line limits for individual accounts and agency MCCs, they don't often send IO's.
Payment
Invoice payments may be made by check or wire transfer.
Why Choose Invoicing?
You'll get one monthly bill which can make internal accounting easier and can extend account payable periods. For example, May charges won't need to be paid until late June. Additionally, if you're an agency whose clients pay you for AdWords charges, MDS (see below) can be more convenient for agency billing.
Bonus Billing Tips
- BingAds billing preferences are unable to be changed once they are established.
- Visit Google AdWords interactive form to find payment options and minimum payment amounts by currency and location.
- If you manage multiple accounts via My Client Center (MCC) and meet monthly invoicing spend requirements, you may apply for AdWords' Manager Defined Spend (MDS) program. With this program you will receive one invoice for all of your accounts; additionally, you will be able to manage multiple budgets across accounts through one interface.
- SEER has experienced some difficulty with clients who use American Express to pay their AdWords' balance. If opting to pursue postpay with an AMEX, it is strongly encouraged to take advantage of a back-up card in case the AMEX is rejected.
Thanks for reading this week as we discussed various billing options. Be sure to stay tuned for more Mastering PPC blogs from the SEER team!
