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Effective Bid Strategies, Part 2: Setting Bids Tutorial

4.3 Bid Modifiers

So, now let's talk about bid modifiers. So, what bid modifiers lets you do is manipulate the bids based upon a location targeting and ad schedule, which is a day of the week or time frame within a day or devices. So, you'll still set your bids, whether it's CPA or CPC, at an ad group level always. With CPC based bidding, you can also do them by placements and keywords. And that's your base level bid. Then what happens is you can set a bid modifier to say, if someone's on a mobile device I want my bid minus 100% lower, I want my bid 22% higher. So the bid-modifier looks at the current max CPC being used and adjusts that bid that's submitted into that particular auction. So now the basic version of bid modifiers is known as minus 100%. Essentially, whenever a bid modifier is minus 100%, your bid is always set to zero. So, if you don't want to be on mobile devices, you can make a modifier minus 100%. If you don't want to be shown in a particular geography you can make your bid modifier for that geography minus 100%. In the minus 100% bid modifier which always sets that target to a zero bid, is compatible with every single bid system. Now, alternately, you can set different bids. You can say, if someone's on a mobile device, I want to bid 22% higher or 19% lower. And these non-100% calculations, these incremental calculations, are only compatible with max CPC or enhanced CPC Bidding. Because CPA bidding and budget optimizer maximize your clicks, Google needs control over the max CPCs in order for their systems to run. They don't take bid modifiers into account. Now, with bid modifiers, the math gets a little complex, so unless you're a stats major, don't do it in your head. So, for instance, if you have a starting bid of $1 and you say, well someone's in this particular location, and this could be an individual city. I want my bid 50% higher. But if someone's on a mobile device I want my bid 50% lower. Now, when you say well plus 50%, minus 50% my final bid should be one. It's not how the math works. These are done on each individual bid calculation change. So, what really happens is, you have a starting bid of $1, and Google says okay, you're willing to spend 50% more for this geography. That makes your bid $1.50. Now, oh, you've got a minus 50% mobile modifier. So, $1.50 divided in half which is a minus 50% leaves your bid now at $0.75. And then you don't have a bid modifier for time of day so now your final bid is 0.75, not $1. So, a stats major can do this in their head, most people cannot. Now, CPCs are capped at ten times your starting bid, because you could do a starting bid of a dollar and a 900% geographic bid modifier, and a 300% mobile bid modifier, and a 500% time of day bid modifier. That would make your bid $240. So it's easy to kind of lose control. So, Google caps all the modifiers at ten times your starting bid or a max of a 900% bid adjustment. Now, this is a lot of math, so there is a big calculator right inside your enhanced campaign that you can click on, pick your modifiers, and Google will show you what your final bid adjustment is, based upon the modifiers you're using.

4.4 Location Bid Modifiers

So, all these modifiers are at the campaign level, and some are at the ad group level as well. So the first modifier is a location bid modifier. So location bid modifier you can add a location and then change your bid based upon that location. Now from within the interface and the modifiers it's not easy to see all the data necessary to pick what your bid modifiers should be. So often going to the Dimensions tab is easier to see, your conversion rates and cost per conversions by individual location. So, in this case, we're looking at geographic based information at a metro level and when we look at the data, we see that New York has a $77 cost per conversion. Houston has a $41 cost per conversion. So we're willing to raise our bids for Houston or we want to lower our bids for New York so that we can hit our target return ad spend or our target CPAs in all of these areas. Now let's say you're targeting all of the United States and you setup your campaign initially just to target the US. So what happens is you go to the Location bid Modifiers section which is at the campaign level under settings, and all you'll see in United States and you can't set a bid modifier. If you want to add a bid modifier for geography, you have to go into your campaign settings and add those geographies individually. So now, our campaign is targeting, the United States, New York, and Dallas, and now once we've added these as targets, then we can go back to our bid modifier section and we can say, all right, New York is not doing very well. We're going to lower our bid by 39% before it is submitted to the auction in New York. Dallas we're doing really well, so we're going to raise our bid by 22%. So most companies do have slight changes in CPAs or return ad spend by location. So then you can examine your dimension tab data. If you see way over-performing areas, you'd like to have higher bids, or way under performing areas you'd like to have lower bids that could be minus 100%, just don't show there. Then add them to your campaign location targets. Then go to your bid modifiers and adjust your location. Bid modifiers, so now your bid is based upon your base bid initially by keyword or placement, wherever you set that bid level, then when the user's looking for New York information the modifier is used and that's your final bid calculation that's submitted into the auction.

4.5 Ad Scheduling Bid Modifiers

Now there is more than just location bid modifiers. We also have ad scheduling. So ad scheduling at a basic level is just turn your ads on or off. So, what happens if you have a business and you only answer your phone from 8:00 to 5:00. And if you're running your ads 24/7, there are times somebody calls you and no one answers the phone. So in that case, you can just run your ads only from 8:00 to 5:00. And with this type of ad scheduling, where your ads are just on or off. That's it. This is compatible with every bid option there is. Now, the secondary usage of ad scheduling let's you change your bids up or down by a time frame. It could be a day of the week or a time within a day. Now, the most important thing to first realize about ad scheduling is, it is based upon your account's time zone, not the user time zone. So Bing does have this as well. Bing is based upon the user time zone. So Bing ad scheduling is really easy to do. With Adwords, often you need to either one, let's say you're advertising to all the US, there's multiple time zones, you need to pick big swathes of time, just say, well at 8:00, Eastern yet, 5:00, on the Pacific Coast, but it's good enough and we'll just start our ads at 8:00. And people go home from work at 5:00 on the West Coast, but that's 8:00 on the East Coast, so we'll just run our ads from 8:00 to 8:00, and just not worry about all the incremental time zone possibilities. That's the easy way of doing it. The hard way of doing it is making a campaign by time zone. That's a whole lot of work because time zones don't follow nice, neat geographic lines. So there's multiple ways of doing it. We're going to assume for right now, just a basic way of walking into this.

4.6 Ad Scheduling: Advanced

So then, with the advanced version, you might look at your metrics and say, well, in the mornings our bids are pretty good. But over lunch hour, that 11 to 2 o'clock range, because we have multiple time zones, we do really well. So let's raise our bids over lunch hour, then people go back to work, and they're not looking at our stuff as much. So let's go back to our basic bids. So, with the advanced versions, you could raise and you can lower your bids by, either by a full day, or by individual parts of the day. Now almost every company has conversion rate changes by time zone. So, for instance, this is a case study we did, and we did a quick survey first. When do your babies nap. And so we mapped out for a whole lot of children under three years of age when most likely times are that they are sleeping. And then we took our total data and mapped out diaper sales. And now we have when kids nap we have diaper sales information. We layer them over each other and we see some really clear trends. Moms buy diapers when they have time to do so which is when the babies are sleeping. So pretty much every industry has these kinds of trends. When you look at relative conversion rates by industry in the retail space, they start going up about nine o'clock in the morning, they stay high over lunch hour, as people start commuting back home from work, they decline again. And then you have a bump before and after dinner, and late at night, they drop a lot. Look at the travel space, and a lot of travel queries are weekend based. You see a big spike over lunch hour times. Then commute times back home for the week day travelers. And then you have bumps around dinner time or when people are thinking about what travel they may want to do in their leisure time while watching TV in the evenings. For dating we see a bump over lunch hour but not a really big increase until about 10:00 at night and dating stays in pretty good shape until almost 4:30 in the morning. Now, at 4:30 in the morning the retail space is anemic in most cases but dating is pretty robust. Look up B D C finance, huge spikes over lunch hour, not a lot of searchism till lunch hour times, big drop commute time back home. Increase right after they get home after dinner and sometimes late into the evening, but at 4:30 in the morning it's really low. So most people do have some changes in conversion rates by these timeframes.

4.7 Ad Scheduling: B2B Case

So here's a B2B company. And so this was a B2B lead generation site. Their goal number one was a whitepaper download, you had to give some personal information and you can get a whitepaper. Company had a lot of data, but they weren't really managing bids too well. And so benchmarked the data and said all right well let's figure out our conversion rates and our time frame here and this is business to business. So first graphed out hourly conversion rates. It's kind of what you'd expect to see, a nice peak between 9 and 11, a drop over lunch hour, a peak again from 1 to 3, drops as people go home and stop working. Now that's hourly data. Then we graph the data by day of the week. And we see that Tuesdays and Sundays are really good days. Now, whenever you start getting into the data you always have to make sure you go far enough into the information. because it we stopped here, we would say all right 9 to 11, 1 to 3, Tuesdays and Sundays we're going to raise our bids. Except, that's not the true trend. What happens is Tuesdays, that's a very true trend, 9 to 11, 1 to 3, huge spikes on Tuesdays. Sunday is the spike really occurs in the evening, usually around 2 or 3 o'clock on a Friday evening the web just kind of dies. For business to business items. Your email really slows down. People are thinking more about their weekend plans, what bar are they going to, what movie are they going to see, and they don't finish all their work Friday afternoons. So what happens is like oh I've go this report or this project due for my boss on Monday, I have to go and finish this research, so Sunday night's is commonly a large B2B research night. Now remember time zones matter as well, when we graph this by time zones big, big differences by time frames. And in some cases it matters, and in some cases it doesn't. If you are doing stock based items, people in the west coast go to work at five o'clock in the morning, because they're going to work based upon an east coast bell on the stock exchange. So, you will see some differences by time zone. So now, did a quick reorganization. Bids were changed by ad group, by time of day, and by day of the week. Their CPAs went from $37 to $12, so they tripled conversions while their average dollars remained the same, just by doing ad scheduling and setting bids properly. Now, I do want to make a warning here. Because, this was for a whitepaper download. So, yes there's a lot of conversions on Sundays for white papers. But, if the company had instead, say, taken our call base data and they had sold them to a pivot table and graphed out when calls occurred, they would see a huge peak on Monday morning. Except. People weren't finding them Monday morning. So they used that schedule and said wow. We get no calls Sunday night, we're lowering our bids. We get a lot of calls on Monday mornings. We're going to raise our bids. And then they're going to wonder what just happened to my traffic. And it was the fact that people searched for them Sunday and found them Sunday, and called them on Monday mornings. So research times versus call times may not always be the same based upon how your activity lays out, and most businesses don't answer the phone on Sunday evenings. So the ad scheduling, it's very useful to go into your data. You can run all this information in the dimensions tab, and you can see data by hour of day, you can see data by day of the week. And then look to see what the trends are for your particular industry.

4.8 Device Bid Modifiers

Now we have a third bid modifier. This is a mobile bid modifier. So by default, your accounts are on every single device. Now, you're always on computer and tablets regardless. So those devices are always there, but you can set a bid modifier for a mobile device at a campaign or an ad group level. So if you don't want to be on mobile or your site doesn't work well on mobile or mobile users don't convert well for you, then you can just make your mobile bid adjustment minus 100%, set your bids to zero. This is compatible with every bid method. If you do well on mobile or it's not minus 100%, then you can do bid adjustments. Now the easiest way to see how you're doing on a mobile device is to either use your analytics or go into AdWords and you can segment your data by device type. Now you can segment this data by campaign ad group, ads or keywords. So you can see keyword conversion rates by device type. So then what happens is we'll see segmented based information. We will be able to see how are our campaigns or ad groups or keywords doing by device. So in this case, when we look at this company's information, they have $168 CPA on computers, but they have a $95 CPA, much less on mobile devices. So when we'd want to go back to our bid modifiers and increase our bids for all mobile devices, because we do a lot better on mobile devices than we do on computers, in this case. However, what really happens in many cases is that when we get into an ad group and let's pretend these keywords are in one ad group. We'll see that some keywords do better on mobile. Others do about the same, mobile versus desktops, others have better CPAs on desktops than mobile devices. With an ad group level bit modifier, you're affecting every keyword equally within an ad group. There is no keyword level bit modifier. So in cases like this, what you'll want to do is break your ad group into three different ad groups. You'll have one ad group with a positive mobile bid adjustments. You'll have one ad group that just doesn't have a mobile bid adjustment, because the CPAs are roughly the same. Well, another ad group, the negative mobile bid adjustment. So, if you're doing mobile based advertising and you get into the key word conversion rates and key word CPAs by devices. Often, you'll do some ad group segmentation and always di Adwork segmentation based upon the ad that's displayed But you'll probably do some other ad group segmentation based upon your mobile bid modifiers. Make sure that your CPAs work out similarly for desktops versus mobile devices.

4.9 Bidding Recap

So to recap all the bid section here. In most cases when you're starting, you're going to start with Max CPC Bidding. You can't start with CPA, because you don't have conversion rates yet. So Max CPC Bidding is a good one to start with. The other option is to start with budget optimizer, get the most clicks possible. That's really better for publishers than it is for most advertisers who are selling goods or services. Now as you collect data, then you're going to want to look at your bid system. Maybe you want to switch to CPA based bidding. Maybe you have some keywords that should be in a budget optimizer campaign, other keywords that should be in a CPA bidding campaign. So you can use multiple bidding systems just by using multiple campaigns. So when you look at your overall goals you want to accomplish, different keywords are going to have different overall goals in some cases. So if these keywords are brand keywords, these are awareness keywords, these keywords are for brand new products. We just want exposure. These keywords, we just care about return ad spent. That's a few different goals. So, you're going to use different campaigns with different bid systems so that all the keywords are reaching the goals you're trying to accomplish. So when you calculate your bids, look back to those goals. What's your desired return ad spend or what's your desired goals for those keywords? That will tell you how you would want to segment some of your campaigns just based upon a bid system. So then once you start collecting this data and start looking at it, you know look at your data by location, when it's different, when you have outliers and they can be positive or negative outliers. When you have outliers, then use location bid modifiers, and look at your data by time frame. Graph it out. It's easy data to get to. And again, when you have outliers the data is different by time frame, then use ad scheduling bid modifiers. And then look at your data by devices. If the data's different, which in most cases it is, then use device based bid modifiers. So always watch for data outside the norm, outliers are great to look for. When you see outliers it's A, good places to learn from, B, if it's a big based information that a CPA return as been typed data, that's generally an indication that you need to use a bid modifier. So by picking your bid system and then picking a way you're going to set bids, and then when you have outliers use bid modifiers. Those three items combined will let you set bids that help your account reach the goals you've laid out for it.

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  • PMP, PMI, PMBOK, CAPM, PgMP, PfMP, ACP, PBA, RMP, SP, and OPM3 are registered marks of the Project Management Institute, Inc.

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