Bidding best practices (part 1 of 6): Prioritizing and iterating on your bid adjustments

Tuesday, May 7, 2013 | 9:00 AM

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Today, we are kicking off an in-depth education series to help advertisers optimize bids for their AdWords campaigns in the multi-screen world using many of the new features and tools that we recently introduced. Throughout the series, we’ll cover best practices for setting bid adjustments within enhanced campaigns, including recommendations for how to set mobile, location, and time of day bid adjustments. We’ll also showcase ways to incorporate automation into the bid optimization process and share how businesses are using these solutions to meet specific objectives. We hope you will find this series useful.

Today’s post will provide best practices for prioritizing bid adjustments across location, time and device. It will also suggest ways to optimize these adjustments over time, especially as outcomes and business conditions change.


Overview

In this new multi-screen world, advertisers are seeking new ways to reach people with ads that are relevant to their context. With an enhanced campaign, you can easily reach consumers and vary bids by device, location, and time of day – all within a single campaign. Learn more about the three types of bid adjustments and what each one can do for your
business.

Stacking bid adjustments


Bid adjustments can be stacked on top of each other to optimize reach for each campaign. For example, if you operate a store in San Francisco and know that your campaign performs well on mobile devices on every day except Sunday, then you can set bid adjustments to increase bids for mobile and San Francisco; and decrease them for Sundays.

Example
Adjusted keyword bid =
Initial keyword bid $1.00 X (San Francisco 1.2) X (Sunday 0.5) X (Mobile 1.1) = $0.66

In this example, we set the location bid adjustment for San Francisco to +20%, the time bid adjustment for Sunday to -50%, and the mobile bid adjustment to +10%.  Assuming that your initial bid was $1.00, then your final bid would be $0.66, or -34% compared with your original bid.

Multiple bid adjustments, as in this example, can help you achieve a desired bidding strategy. But individual bid adjustments still apply across all dimensions.  For example, the decreased bid for Sundays applies across all devices and geographies.

Prioritizing bid adjustments

The way you manage your business operations and set overall goals are key factors that determine the order in which you set bid adjustments. We recommend setting your most important bid adjustment type first (location, device or time).  When you’re happy with your performance, you can add the second type of bid adjustments -- and eventually the third.

It’s a good idea to apply basic business sense to this process:
  • If you have a store which is only open during certain hours, time will likely be the most important bid adjustment to set first.
  • If you see very different advertising performance across countries, cities, states or zip codes (or if you wish to bid higher for users who are physically close to your stores), location may be the first bid adjustment to set.
  • If your advertising performance varies widely between mobile and non-mobile devices, device could be your starting point for bid adjustments.

AdWords provides useful information to determine which bid adjustment type is the most important one for you. You may also have third-party tools or backend systems that can inform prioritization.  

Iterate

Over time, you should iterate on each of your bid adjustments to achieve desired outcomes as your results and business conditions change.  We recommend reviewing these adjustments on a regular basis to capture seasonal changes and to ensure that you are optimizing for ROI.

Keep in mind that better data about your advertising performance will help you optimize your bid adjustments.  Below are some tips:
  • If you do not track conversions, you can optimize your bid adjustments based on clicks or impressions.
  • If you do track the number of conversions (using AdWords Conversion Tracking, Google Analytics or other tools), you can set your bid adjustments based on your actual conversions and CPA.
  • If you track the revenue or profit associated with each conversion (using the Ecommerce functionality of Google Analytics or other tools), you can set your bid adjustments based on the actual revenue that results from your ads.

Reminders

To use the features that we reviewed today, you’ll need to upgrade your campaigns to enhanced campaigns.  Starting on July 22, 2013, we will begin automatically upgrading all campaigns.  Learn more

Next week, we’ll dive deeper into how to customize your mobile bid adjustment for each campaign by combining your AdWords data (impressions, clicks and cost) with key stats about your business, like number of in-store visitors from your ads and their average order value.

Posted by: John Sullivan, Global Search Solutions

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