Let’s Talk About Bid Modifiers
Published: November 25, 2013
Author: Katie Walton
When Enhanced Campaigns launched earlier this year, as well as a slew of much-maligned changes, they introduced us all to bid modifiers. This feature allows advertisers to keep account structures (relatively) simple by applying modifiers to increase or decrease bids for location, device and time.
But the wonderful world of bid multipliers didn’t stop there. Since then remarketing lists for search have also come into play, bringing with them all new ways to adjust bids. This means that, in theory at least, your bid could be affected by up to 4 separate modifiers. Holy multiplication, Batman!
So what have we got going into the mix?
Device Bid Modifiers
These were the big story of Enhanced Campaigns – no more targeting mobiles in separate campaigns – it’s bid modification to manage mobile all the way. Many of you will have used these in some respect, whether it’s to exclude mobile traffic altogether or simply to set lower bids for mobile.
Location Bid Modifiers
As well as targeting a specific area, you can now increase or decrease your bids based on where a user is based.
Time Bid Modifiers
Strictly speaking, this isn’t a new feature; day parting and bid adjustment has been available in campaigns for a long time. The real difference is the new ad schedule tab in Settings that shows the performance in a more user-friendly format.
Remarketing Lists for Search are another wonderful innovation, offering us all a way to bid up on targeted search traffic. While you can – and arguably should – create separate campaigns to use this strategy, you can also simply apply bid modifiers to existing ad groups and campaigns.
This may not seem like a huge problem, but when you’ve got this many different bid modifiers at play, you could end up with conflicting strategies – or paying a lot more than you intended for clicks.
Say you run a hotel in London and you have a campaign targeting users in the UK. You place a bid on the keyword [london hotels] of £2.50.
You’ve noticed that your most profitable guests come from Manchester, so you decide to use a bid modifier to up your bid for Manchester. You really want their business, so you up your bid by 200%, bringing your bid to £7.50.
When you analyse the performance of your campaigns by device, you notice that your CPA for mobile traffic is too high, so you decide to decrease your bid by 50%, which takes your bid to £3.75.
You know that users that have stayed at your hotel before are far more likely to book with you a second time, so you increase the bid on returning converted traffic by 30%, so your bid is now at £4.88.
You’ve realised that traffic to your website that comes between 9 – 10am is really high spend and high CPA. You still want visibility, but you decide to drop your bid by a massive 90% to avoid this unprofitable time of day. Now your bid is a measly £0.49.
Or assume that you set every bid modifier to increase your bids – pretty soon your £2.50 bid could end up costing you an arm and a leg.
These are pretty extreme examples; in most cases the difference between your default bid and your modified bid will be minor. But still, you should be aware of the impact of multiple bid strategies.
So how do you know how your bids will interact? Multiply the modifiers together then multiply your original bid by the new modifier. Convert your percentages to decimals to make the calculations easier. So +200% x -50% x +30% x -90% can be written as 3 x 0.5 x 1.3 x 0.1, giving you a multiplier of 0.195.
When you see the overall bid adjustment you’re making, it’s easier to understand whether or not you’re making a sensible decision. And if the numbers don’t stand up to scrutiny, think of another way to achieve your goals (most obviously, create new campaigns).
If you don’t even know what adjustments you’re making to your bids, audit your account now. Figure out what you’re doing and whether it really makes sense.
And if modifiers are the way to go, don’t pluck numbers out of thin air – there are scripts that can work out mobile modifiers for you, as well as manual methods to get it right first time.
Are you using modifiers? How are they working for you?