Demystifying Google's Enhanced Campaigns Bid Modifiers
Bid modifiers are a powerful new feature, but advertisers should take care when implementing them.
Google’s Enhanced Campaigns are the biggest change to the AdWords platform since its launch over 10 years ago. Right now digital marketers are scrambling to understand the new functionality and migrate their campaigns before the July 22 deadline. While many new features are easy to understand and implement, there’s a lot of confusion surrounding the most powerful new feature – bid modifiers.
Bid modifiers allow advertisers to change keyword bids based on the searcher’s location, the day and time, and whether the searcher is using a smartphone or some other device. The modifiers are applied in real time during the auction when a Google user’s search triggers your paid search ad, and alter your base keyword bid in response to these “secondary signals.”
Device
Most of the controversy surrounding Enhanced Campaigns stems from the removal of device targeting at the campaign level. This eliminates the current best practice of creating “cloned” versions of all campaigns, each targeting a single device (computers/tablets/smartphones) with separate bids, budgets, and messaging.
In Enhanced Campaigns keywords target all devices, and tablets and computers are identical with regard to bid and ad copy. However, Google allows advertisers to provide mobile-preferred ad copy and set a mobile bid multiplier, which alters the base keyword bid for searchers using a smartphone.
Mobile bid adjustments can be set between +300 percent and -90 percent of the base bid. For example, a keyword with a bid of $1 and a mobile multiplier of +50 percent would have its bid set to $1.50 when triggered by a searcher on a smartphone. Advertisers can also set a multiplier of -100 percent, opting out of serving ads on smartphones entirely.
These multipliers were originally set only at the campaign level, but a few weeks ago Google announced that beginning in mid-May advertisers would be able to set the Enhanced Campaigns mobile multiplier at the ad group level as well. This is a great update, as it provides marketers the option to implement a much more detailed mobile bidding strategy without the need of massive account restructuring.
Geographic Location
Advertisers can also set a bid adjustment for searchers based on their location, ranging from -90 percent all the way to +900 percent. Unlike device targeting, Enhanced Campaigns don’t remove any current geo-targeting features, so advertisers can still segment their campaigns by geography if they want to allocate different budgets to specific locations or utilize location-specific ad copy. However, geographic bid modifiers provide a great way to adjust keyword bid strategy based on location – advertisers can increase bids on competitive keywords for high-performing markets, and decrease bids on poor-performing locations.
Enhanced Campaigns currently don’t offer a way to automatically customize ad copy based on the user’s location, although there is a little-known feature in the AdWords API that provides this functionality. It’s possible Google will add this feature in a future Enhanced Campaigns update.
Locations can be defined by city, DMA, Zip code, or even radius around an advertiser’s store locations. If a user falls into multiple targeted areas with different bid modifiers (for example, a targeted state and a targeted Zip code), the smallest relevant targeting is used to determine the bid multiplier (in this example, the Zip code bid modifier would be used).
Day and Time
Bid adjustments for day and time have the same range as location, between +900 percent to -90 percent. Advertisers can set adjustment for time of day and day of week – but there’s a catch. For campaigns targeting multiple time zones, the time zone setting for the Google AdWords account is used for these bid adjustments, not the time zone where the searcher is located. Make sure to adjust for this if your campaign targets multiple time zones!
How Multipliers Stack
When examined individually, bid multipliers aren’t too difficult to understand. However, advertisers who set bid adjustments for each of the three multipliers separately without considering how they combine could easily wind up with much higher bids than expected.
Google never uses two instances of the same modifier (for example, only one geographic modifier is utilized at a time), but if a searcher fits the criteria for multiple different modifiers, those modifiers stack – and each successive modifier is applied to the modified bid, not the base bid.
As an example of how easy it is to overbid, imagine a keyword with a $1 bid. After analyzing the data, your paid search team sets a device modifier to increase your bid for smartphone searchers by 100 percent, a geographic modifier to increase bids for searchers in Los Angeles by 100 percent, and a time of day modifier to increase bids between 1:00 p.m. and 5:00 p.m. (Pacific Time) by 100 percent.
Now imagine a searcher on her phone in Los Angeles at 2:00 p.m. triggers your ad, and clicks on it. Because of the way the modifiers combine, you just bid $8 for that click.
Original bid: $1
X location modifier of 100 percent: $2
X time of day modifier of 100 percent: $4
X device modifier of 100 percent: $8
Bid modifiers are a powerful new feature, but advertisers should take care when implementing them.
While the deadline for Enhanced Campaigns migration is July 22, smart marketers won’t wait until then to make the switch. They’ll migrate now and spend the next few months testing, learning, iterating, and figuring out how to outmaneuver their competitors in the new auction format that Google has created with Enhanced Campaigns.
