Locations Bid Optimization


What
do we mean by Locations Bid Optimization?

It involves changing the bid adjustments of the Locations in order to fetch more conversions at a lower CPA.

Why do we need to perform Locations Bid Optimization?

It helps in reducing the CPA and also helps in increasing the conversions.

When do we need Locations Bid Optimization?

Most of the time clients are looking to increase conversions and also strive to reduce the CPA from time to time. Hence Location bid optimization becomes imperative in improving the conversions rate and reducing the CPA.

How do we perform Locations bid optimization?

Location Bid Up Recommendations

Step 1: Set the date range to last 30 days. Go to Locations section. Download the Locations report. Switch to campaigns section and download the campaigns report as well. Make sure that both the reports are having the conversions data.

Step 2: Open the Locations report in excel. Rename the tab as “Raw”. Copy paste all the cells in a new tab in the same sheet and rename it as “work”.

In order to increase conversions we have to increase the bid on Locations that are performing well in terms of Conversions and CPA. But how shall we figure out that what is performing well and what is not. Here we need a bench mark. Consider the following criteria for example.

  • Locations with Conversions > 0, Clicks > 10, Location CPA < Campaign CPA.

Here we stated that if a Location is bringing conversions and incurring less CPA than of its Campaign’s CPA, then we qualify it as a performing Location. We took the filter for clicks > 10, so that we know that Location has triggered quite a few ads and it is not too early to judge any Locations performance.

  • So for example, after applying these filters we get 100 Locations. Now the question is how much to increase and what justification you will give to the client for increasing bids and for the rate you are increasing. Here we use a concept of CPA Differential.

 

Formula for CPA differential is [(Campaign CPA – Location CPA)/Campaign CPA] * 100

 

CPA Differential will help you to figure out how much room a Location has for increasing bids so that it does not get past to its respective campaign CPA.

Step 3: Make CPA differential Buckets. For Example Locations having CPA differential from 10% to 30% increase their bid by 5%. Locations having CPA differential from 31% to 50% increase their bid by 10% and Locations having CPA differential greater than 50% increase their bid by 15%.

 

IMPORTANT NOTE:

  1. These criteria and buckets are not standard. Your criteria and bucketing shall differ according to the data you received from the account. This is just a way you can adapt in order to take things forward.
  2. Never provide Location bid up recommendations for campaigns already Limited by Budget.
  3. Only provide bid recommendations for campaigns running on Manual CPC or Enhanced CPC. Smart bidding strategies take care of the bid optimization itself.

Note: Location bid up will surely increase cost but it can help in bringing down the CPA at the same time. Bidding up on performing Locations can increase the conversions which will ultimately bring down the overall CPA.

Location Bid Down Recommendation

In order to reduce the CPA we have to decrease the bid on Locations that are not performing well in terms of conversions and CPA. But how shall we figure out that what is not performing well. Here we need a bench mark. Consider the following criteria for example.

  • Locations with Conversions = 0, Clicks > 10, Location Cost > 2*Campaign’s CPA.

Here we stated that if a Location is not converting and incurring too much cost, then we qualify it as a non performing Location. We took the filter for clicks > 10, so that we know that Location has triggered quite a few ads and it is not too early to judge any Location’s performance.

  • So for example, after applying these filters we get 100 Locations. Now the question is how much to decrease and what justification you will give to the client for decreasing bids and for the rate you are decreasing. Since we do not have Location CPA, we will bucket according to the Location respective campaign’s cost. The more a Location incurs cost when compared to its campaign CPA the more we are going to decrease.

 

Step 3: Make Cost Buckets. For Example Locations having Cost > 2*Campaign CPA decrease their bid by 5%. Locations having Cost > 2.5*Campaign CPA decrease their bid by 10% and Locations having Cost > 3*Campaign CPA decrease their bid by 15%.

 

Note: We should not suggest Location bid down unless it is very important. It will reduce your client’s spending which means that you will be getting less business. Only suggest bid downs when it is very important to save on cost.

 

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