Be Water - Geographic Bid Adjustments
Welcome back to the Efficiency Optimization Series. As noted before, we will be posting a series of articles dedicated to optimization techniques across different digital marketing platforms. The first article dealt with negative keyword optimizations. You can read that article here. The second article dealt with keyword labels. You can read that article here. Today's article will be the first to deal with budget flexibility. Specifically, it will deal with budget flexibility as it relates to geographic targeting.
Bruce Lee once said, "Be water". In other words, be flexible. One of the dangers in digital marketing is to become attached to a certain approach. It will typically cause digital marketers to be pensive to try new things that could actually improve the performance of the account. Digital marketers must be flexible. The Cambridge dictionary defines flexible as being "able to change or be changed easily according to the situation". Digital marketers must embrace the ability to change, abandon preconceived notions, and adjust in the moment. Budget management allows for flexibility within a digital marketing campaign. Many digital marketers only consider budget management as taking the monthly budget and dividing it by 30.4 in order to determine a daily budget. That is a good place to start. However, as the campaign matures, we have the opportunity to be flexible with how we direct the budget.
Google AdWords allows one to use bid adjustments to drive budget towards efficiency. According to Google, "Bid adjustments allow you to show your ads more or less frequently based on where, when, and how people search. For example, sometimes a click is worth more to you if it comes from a smartphone, at a certain time of day, or from a specific location." In simple terms, you can tell AdWords to bid up or down based on the performance of time of day, device, or location. This should be tied to conversion performance, not click performance. A conversion can be defined as a particular action that the advertiser wants the end user to take. That can be a phone call, filling out a form, or buying a product. Clicks mean the person was moved by your ad copy. Conversions mean they went a step further and graduated to a potential client. So, Google AdWords allows us to bid up or bid down in a location, based on conversion data. So, let's say that our maximum cost-per-click is $20. If a location spends budget but does not drive conversions, we can add a -50% bid adjustment. So, when someone is searching, and they are in that inefficient location, the maximum cost-per-click will now be $10 ($20 - 50% of the maximum cost-per-click). Conversely, you can bid up in locations that have proven to drive conversions. This allows one to be more aggressive in AdWords' auction in those locations that drive conversions. Simply put, you are driving budget towards efficiency. According to Google, location bid adjustments range from -90% to 900%.
Step 1: Log into Google AdWords and select the appropriate account.
Step 2: Select the appropriate campaign. Then select "Locations" in the menu on the left-hand side of the page.
Step 3: Make certain that conversions and cost per conversion are included in the columns on this page. Adjust location bids based on conversion. You will want to raise bids for locations that drive inexpensive conversions and lower bids for locations that spend and drive zero conversions or have a high cost per conversion.
Final thought: Again, be water. This is, by no means, a magic bullet. It is just another tool in your campaign management tool belt.
If you have further questions, or you want assistance with creating, and using, keyword labels, feel free to reach out to us. We would love to work with you to make your campaigns more efficient.
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References
Google. (2018). About bid adjustments. Referred from https://support.google.com/adwords/answer/2732132?hl=en on July 3rd, 2018.