Since the switch to enhanced campaigns AdWords has become a system of overlapping targets and multipliers. When Google announced Enhanced Campaigns they said that mobile device bids would now be controlled by a multiplier on the base bid.
Leaving aside the argument of which level (campaign, ad group or keyword) this multiplier should be set at, it hints at a major shift in AdWords and how we'll be managing campaigns over the years to come.
All About Multipliers
Your keyword bid still exists. Let's make that clear up front. Consider that your "default" bid from now on. It's the basic level you choose which people to target, so it's the basic choice of how aggressive you want to be in the auction.
But there are other ways to broaden or (more importantly) narrow down your targets. Crucially for this discussion we can talk about Time of Day, Location and Device.
A lot has been written about the new device targeting, from the integration of tablets with desktops to the categorization of devices. What we're interested in now is how a device signal changes your targeting.
Every campaign is different, and in different circumstances a different device will tell you different things about a user. The same applies to time of day and location.
You can't say "12 noon is best" and apply that to all campaigns. You can't even apply it to different parts of the same campaign.
If a user is near your physical stores, then time of day might be crucial to their chances of coming to the store. That might not apply if they're remote.
Think in Layers
All the multipliers work together in conjunction with one another. Consider device, time of day and location as filters to your targeting. If somebody shows certain characteristics then you can filter to be more aggressive, or less aggressive if you think that person is a poorer prospect.
Let your bid multipliers overlap. At the base you still start with your keyword. But now a user who matches your keyword and is nearby at the right time of day can be targeted easily. That approach works well for retailers with physical locations, but a small percentage of AdWords advertisers fit that description.
Think About Research Cycles
Consider the case of a B2B advertiser looking to target CTOs and IT Directors. In that case you may be able to assume that a user on a mobile device during rush hour is commuting, and target your bids and ads accordingly.
A user doing searches on the train or late at night may interact differently with your site than the same person on his work machine during the day.
Think about research cycles for your typical customers and decide how the multipliers should overlap.
Act in Terms of Conversion Rates
This is hard to apply. Be conservative about this. Every assumption you make about your searchers (no matter how accurate) will only reflect one of many possible motivations.
With so many forces acting on people it's easy to make predictions that will swing wildly away from reality.
Think in terms of multipliers and layers, but act in terms of conversion rates.
Every time slice you add, every location you include, they will all report back detailed stats including conversion rates. The higher your conversion rate, the more you can afford in the auction, and the more traffic you can get from matching users.
Set your multipliers to be more aggressive where you have a history of good conversion, and less aggressive when you don't. But temper that with some attempt to understand your consumers.
What do the key combinations of targets suggest about those users? If you have an outlier target combination that performs very well or very poorly, try to work out why. Your long-term optimization can come from tailoring your ads and your site to these scenarios.
Google Display Network
The Google Display Network (GDN) has its own version. Consider the six primary targeting methods that are broadly available:
Keywords, topics and placements and "contextual" triggers. They depend on the material that the user is looking at that very moment. Remarketing, interests and similar users are "audience" triggers. These describe some aspect about the person but don't narrow down what the user is looking at.
I've written before in this column about combining targets on the GDN. The system is slightly changed when you upgrade to enhanced campaigns.
Choose one of your targeting methods as your "default" or "canonical" target. This one gets a bid, same as always. Every other targeting method you layer on top gets a multiplier.
If each target appropriately filters users and has a decent chance of defining a group of people who will convert, then each target should narrow things down. A user matching multiple targets is likely a better prospect, meaning you want to be more sure that they see your ad. By increasing your bid when the user matches more and more targets at once you are refining your spend towards those users you think will convert best.
Multipliers are clearly on Google's minds. In fact there are several existing features that will probably work better when set up as multipliers.
It's very likely that over the next couple of years we'll see new targeting mechanisms added that will arrive as multipliers, on both search and display. The ability to start with a keyword bid and layer on increases or decreases in aggressiveness based on conversion rate of different user groups is a fantastic way for AdWords to develop.
Be prepared for this to be the future, and make sure that your bidding strategies can cope.
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