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October 10, 2013

Google AdWords & Bid Adjustments: What You Need To Know And How It Affects Your Business

Author: Valerie Baker

Think about the last time you saw an ad. Were you on your phone, tablet, or PC? Was it night or day? Where were you exactly? The amount of time, work, and thoughtful strategy that goes into targeting you (the end consumer) using these factors is may be greater than you think.

If you’re looking at this from a marketer’s perspective, you understand that the main goal of investing marketing and advertising dollars is to achieve a return on investment (whether that be in the form of sales, leads, volunteers, or whatever is valuable to your organization).

With the greater use of technology in every day life – via your smartphone, tablet, laptop, or desktop – online marketing and advertising has become a marketing weapon that not only targets consumers where you’re most like to find them, but also helps in adjusting dollars spent based on a variety of factors to be sure that you’re spending your money both when and where it’s most effective.

Using Google AdWords’ Bid Adjustments

We are heavy users and strong advocates for Google AdWords. It’s our most-recommended online marketing tactic, as it allows businesses to reach potential consumers at the time where they’re searching for that particular product or service (that’s the short/easy rundown – for a greater look, click here).

But first: what is a bid adjustment? 

In AdWords, you can “bid” on keywords to show your ad. In the old version of Google AdWords, you were able to set a bid on a keyword, and that was that. It didn’t matter if your ad showed on a device, where the person searching was, or what time of day it was – the bid you set was the bid you gave – until now (of course, there was always the option to set up multiple campaigns to target by location and mobile device, but proved to be time-consuming and tedious).

Google AdWords’ Enhanced Campaigns revealed new bid adjustments that now allow advertisers to adjust their bids based on a few things: location, device, time of day, and now (I’ve recently learned), weather.

Now, rather than setting one bid for a keyword, we can set campaigns to adjust keyword bids based on these factors (e.g. upping a bid by 50% if user is on a mobile device), thus allowing for more effective, relevant, and cost-efficient advertising.

How Will Bid Adjustments Help Me Advertise?

Bid adjustments help you to spend your advertising dollars on where they’re most effective. Let’s take a look at a few new bid adjustment options, how they work, and most important, WHY it’s important for advertising.

Location Bid Adjustment

By optimizing keyword bids for certain locations, advertisers able to target those searching within a specific radius of a business. Take a local hair salon as an example. This salon is located in Fort Myers, and using location bid adjustments, we can increase the keyword bid by 50% if the user is within 2 miles of the location. This not only allows advertisers to target those within close proximity, but also allows for ad copy customization. A potential customer is more likely to click on an ad that’s relevant (e.g. Come Visit Us In Fort Myers VS. Come Visit Us 2 Minutes Away), thus resulting in greater conversions (and return).

Time of Day Bid Adjustment

Adjusting bids for time of day is very similar to adjusting bids by location. Advertisers are able to increase bids based on when users are searching. For example, a local bar may up their bids between the hours of 8pm and 2am to target potential customers at the moment when they’re most likely to make a decision.

Mobile Bid Adjustment

With the increase in mobile device use (smartphones & tablets), mobile bid adjustments allow advertisers to target users that are on their mobile device. Let’s refer back to the hair salon in Fort Myers example – this bid adjustment will be useful to help them reach a potential new client on the go by customizing the ad message: “Fort Myers Hair Salon – Walk-Ins Welcome!”

Weather Bid Adjustment

Location, time, and mobile bid adjustments in AdWords are great, but by far one of the most interesting bid adjustments is the weather bid adjustment. One example (a great one, I might add) given by Google is that of advertising for a theme park (we’ll use Disney World in Orlando as an example – thanks to Ryan Ulrich for the awesome picture!). Given the fickle weather situation during Florida’s summers, demand for Disney World tickets will vary (would you like to be there when it’s raining and storming? It’s not fun – trust me). Using weather bid adjustments to increase Disney’s exposure on a beautiful, sunny day will likely result in more conversions.

Bid Adjustments: An Old Idea

The idea behind bid adjustments is not new (spending more to reach a potential customer). However, with the continuing rise and variety of technology use in every day life, that old idea needed to be revamped into something that allows companies to target those people while achieving a cost-effective return on investment – and Google has once again led the way.

Valerie Baker

Valerie is the Senior Account Manager & Project Manager here at Atilus.

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