Audience Bid Optimization


What
do we mean by Audience Bid Optimization?

It involves assigning an incremental percentage to audiences so that keywords are ranked higher when searched by a particular audience.

Why do we need to perform Audience Bid Optimization?

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

When do we need Audience Bid Optimization?

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

How do we perform Audience bid adjustments?

Device Bid Up Adjustments

Note: Audiences are applied at campaign level or ad group level, not on keyword level. Study the account and check where the bids are applied. If it is applied at the campaign level then you will be suggesting bid adjustments on the campaign level only, whereas if it is applied at the ad group level then you will provide the bid adjustments at the ad group level only.

Assuming Audience bids are assigned at campaign level
Step 1: Set the date range to last 30 days. Go to Audience section. Filter for “All Eligible”. Download the audience 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 keywords 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 audiences 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 benchmark. Consider the following criteria for example.

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

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

  • So for example, after applying these filters we get 100 audience list. 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 – Audience CPA)/Campaign CPA] * 100

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

Step 3: Make CPA differential Buckets. For Example audiences having CPA differential from 10% to 30% increase their bid by 5%. Audience list having CPA differential from 31% to 50% increase their bid by 10% and campaigns with audiences 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. If audience bid is applied at the campaign level then we need to compare audience CPA with its respective campaign whereas if audience bid is applied at the ad group level then it will be compared with the ad group’s CPA.
  3. Never provide audience bid up adjustments for campaigns already Limited by Budget.
  4. Only provide bid adjustments for campaigns running on Manual CPC or Enhanced CPC. Smart bidding strategies take care of the bid adjustments itself.

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

Audience Bid Down Adjustments

In order to reduce the CPA we have to decrease the bid adjustment for audiences 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.

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

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

  • So for example, after applying these filters we get 100 campaigns with different audiences. Now the question is how much to decrease and what justification you will give to the client for decreasing bid adjustments and for the rate you are decreasing. Since we do not have audience CPA, we will bucket according to the respective campaign’s cost. The more an audience list incurs cost when compared to its campaign CPA the more we are going to decrease.

 

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

 

Note: We should not suggest device 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.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

Fill out this field
Fill out this field
Please enter a valid email address.
You need to agree with the terms to proceed

Menu