An Introduction To Bid Adjustments

By Daniel Hales |
Published 30/11/2020

Did you know that in Google Ads you can make percentage bid adjustments based on a variety of different factors. In this blog post we look at some of the main areas in which you can make the adjustments and how you can look at setting them.

Here are the main areas in which you can add bid adjustments:

  • Locations – Allows you to change bids based on locations such as countries, regions, cities and a radius around a point. This can be especially useful if conversions in different locations are worth different amounts to you.
  • Age (Demographics) – Allows you to set adjustments on predefined age ranges. There is also an undefined age range if the age of the user is unknown.
  • Gender (Demographics) – Allows you to set adjustments based on gender. There is also an undefined if the gender of the user is unknown.
  • Household Incomes (Demographics) – This is based on US household income and it’s unlikely you’ll see data unless running the campaign in the US. Allows you to adjust bids based on income brackets.
  • Ad Schedule – This allows you to set adjustments based on time and day. See our blog post on this here.
  • Devices – Allows you to adjust bids based on whether the person is using a phone, tablet or computer. Can be useful if you don’t yet have a responsive site to get rid of mobile views, although we would recommend updating to a responsive site.
  • Audiences – This allows you to make adjustments on custom and predefined audiences. These can be based on things such as interests or whether they’ve taken certain actions on your website.

How to know what to set the bid adjustment to

For the majority of bid adjustments you will want to make the adjustments in line with your key performance indicators (KPIs). KPIs within Google Ads are usually conversion based and will look at either a Cost Per Acquisition (CPA), a Return On Ad Spend (ROAS), or a Cost of Sale (CoS).

CPA – This is usually used with lead generation campaigns where it may be harder to track the actual revenue generated by the campaign. It tells you how much it costs for each new lead to come in.

ROAS – This is usually used for ecommerce campaigns and gives you a much better idea of how well the campaign is performing. It tells you how much you make back in revenue against how much is spent.

CoS – Also used for ecommerce and looks at the percentage of ad spend against revenue. This can sometimes be easier to use if you want to compare ad spend against your margins.

Once you have the KPI you use you should then look at using bid adjustments to either lower or increase bids depending on how each compares to either an average or target KPI. This will mean your best performing areas will be increased and the worse will be decreased, helping to level off performance.

Consider a 0% average

Sometimes we can see these different bid adjustments being used as a way to lower bids across the board and this can even happen without the person managing the account realising. This occurs as over time as bids are adjusted you may start to see all adjustments going one way or another. The ideal thing to do if you need to lower bids across the board is to lower them at the keyword level.

In order to get around this we would suggest making sure that your bid adjustments always centre around a zero point. This will mean that the keyword level will need to be adjusted based upon its performance and the bid adjustments will be used as they were designed.

To make sure you’re using a zero point all you have to do is get an average of all the bid adjustments (including 0% adjustments), and take it away from each individual bid adjustment. Once you do this the average bid adjustment will be 0%.

Please note: there may be times where it’s not suitable to use a zero point and you should consider your objectives. For example if you’re looking to adjust based on location and conversions closer to your location are worth more it’s unlikely that you’ll want to use a zero point.

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