A Guide To Google Adwords Bid Adjustments
It is no secret that clicks on Google ads are not all created equal. Even when the search terms are identical, some clicks are far more valuable than others. This is because the chances of a click leading to a conversion depend on all sorts of dimensions and factors – location, devices used, time of day, RLSA and so on.
So the aim of the game with Google Adwords is not just to get people clicking. It’s about getting the right kind of quality clicks which have the highest probability of converting. And that is where smart bid adjustment comes into its own.
Ask yourself the following questions:
- Do your ads convert better on certain days/hours?
- Are there specific geographical locations that provide you with more value?
- Is mobile winning the device war to achieve a lower cost per acquisition?
- Do users that have visited 3 or more pages on your site convert more often than those that have visited less?
Dive a little deeper into your AdWords account and the answers to these questions will soon be revealed. For the purpose of this article, we have provided an example of different CPA’s across different devices.
In this graphic, we can see that client X not only has a lower CPA for tablets in comparison to the device average, but also a greater ROAS (Conv.value/cost). Wouldn’t it surely make sense therefore to increase our bids on users using this device, to try to acquire more of its traffic? Enter bid adjustments.
What are bid adjustments?
Bid adjustments allow you to change the frequency of when and where your ads appear so you can maximise those opportunities which offer the best results. In technical terms, bid adjustments involve a percentage multiplication of your default keyword bid, raising or lowering the bid in relation to different dimensions or user characteristics – to which this blog will refer later. This multiplication can be increased or decreased -90% to +900%.
What dimensions should I adjust my bids on?
Google Adwords offers you plenty of options for adjusting your bids according to different criteria as follows:
- Device Multipliers
Can be set to increase or decrease bids for people searching on a specific device, be it mobile, desktop or tablet. It is also important to mention that you can set a bid adjustment to -100%, which will completely stop your ad from displaying on any given device.
- Location multipliers
Can be set to increase or decrease bids for people searching in specific regions, countries, or even airports and universities (yes, the new interface really does provide options at this granular level).
- Ad schedule multipliers
Again, you have the opportunity here to increase or decrease bids according to when they appear, based on certain hours of the day and/or days of the week.
Increase or decrease bids, by -90% to +900%, for people on certain remarketing lists, who are more qualified users due to their previous experience of being on your website.
Increase or decrease bids according to different demographics such as age, gender and parental status.
What performance metric should I base my bid adjustments on?
In essence, there is no definitive answer to this, given that each of your campaigns will have their own unique goals. Nevertheless, we are going to suggest the two most prominent metrics that concern our client portfolio and which generally serve as sound indicators of campaign performance.
First up is return on ad spend (ROAS), which is generally the main focus for our e-commerce clients. You can identify what your ROAS is for the chosen dimension, by selecting ‘conv.value/cost’ as a column within the interface. From here, you can identify the dimension, whatever it may be, with the most favourable (highest) ROAS and adjust bids accordingly.
If your client offers a service which can not be purchased online and thus no conversion value is reported, then using cost per conversion (CPA) is the logical performance metric to use. This is simply labelled as ‘cost/conv.’ The dimension with the lowest CPA will be the best performing.
How do I work out the percentage increase/decrease?
If maths isn’t your strong point or you don’t particularly like it, fear not. The simple formula below is all you need to master to ensure you are squeezing every last bit of optimisation out of your chosen dimension. Let’s say you wanted to adjust bids for devices using CPA as the performance metric. You would calculate: (All Device average CPA/ Selected Device CPA)-1)*100
Important final pointers
Make sure the date ranges to which you are calculating your bid adjustments do not overlap. We advise doing this at least every other week, so ensure you only look back on data from a two-week window.
If you have previously adjusted bids within a given dimension, do not simply enter a new bid percentage adjustment when you next evaluate your campaign. The below graphic demonstrates how you would work out a new bid adjustment on top of an existing one:
|Existing Adjustment||New Percentage||Difference||New Adjustment|
In summary, bid adjustments provide an effective way to capitalise on clicks that are of greater value to you, be it a greater return on investment or a lower cost per acquisition – amongst other factors. While they can prove time-consuming, they are well worth the effort when optimising a campaign, given their track record of improving campaign performance.
On a final note, this is the point where we’d love to hear your bid adjustment success stories and share with you some of ours. So feel free to comment below, call us on 01206 287507 or drop us a line at email@example.com.