A Look at Demographic Bidding for AdWords

This week I'll defer the topic of content keyword lists to describe a great new tool for AdWords content advertisers: Demographic Bidding.

This powerful new capability has been in beta for a few months, and was rolled out a few weeks ago with this announcement on Google's AdWords Blog:

"What is demographic bidding? It's a feature that helps you target your ads to users of a particular age group (such as ages 18-24), by gender, or to combinations of those groups. You can use demographic bidding whether you are using contextual or placement targeting and with both CPC and CPM bidding."

Content advertisers can now choose to boost their ad group bids by as much as 500 percent for demographic slices that they know will respond better to their ads. Just as importantly, advertisers can choose to entirely exclude demographic slices to whom ads should not be served.

Here's a snapshot of the demographic slices that can be controlled:

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So for example, if an advertiser's target audience is composed of females aged 18-34, the advertiser can choose to shut off ad delivery for all males, and for females whose age is below or above that range.

Bid boosts can be cumulative – so if an advertiser chooses to increase bid prices by 200 percent for males and 300 percent for the age bracket 55-64, then the advertiser will pay up to 500 percent of the ad group base bid price for each click from 55-64 year old males.

Limitations and Caveats

This capability seems to promise much better control over where ads are served, and hence better ROI. But there are limitations inherent in demographic targeting, and there's a big "gotcha:" demographic bid boosts only apply to sites that collect demographic data on site visitors and report it to Google. So advertisers who target ads to sites like MySpace and Friendster will find the capability very useful; others, not so much.

When you set up demographic bidding, Google tells you what percentage of your content campaign's traffic will be controlled as a result. For my agency's clients, this percentage ranged from 0.02 percent to 2 percent – not much to get excited about. But expect the number of sites reporting demographic data to increase, possibly aided by new analytics tools from Google.

In order to benefit from demographic targeting, advertisers need to have a pretty good idea of the demographic breakdown of their customers. Unfortunately Google doesn't yet supply this data in their standard AdWords reports – so for example, advertisers can't see which genders or age slices result in better conversion rates.

Providing this capability would speed adoption of demographic targeting – and Google obviously has the data. So conversion data reporting is high on our Google wish list, along with similar reporting by hour of day, which Google still hasn't supplied despite their introducing daypart bidding nearly a year ago.

Another item on our wish list: the ability to use demographic bid boosting and exclusion at the ad group level, not just at the campaign level. At present advertisers with diverse ad groups within their content campaigns have only one option: split those campaigns into several smaller ones, each containing ad groups with similar demographic targets.

Site and Category Exclusion Revisited

I recently described another new Google AdWords capability, Category Exclusion. This addition to the Site Exclusion tool lets advertisers block their ads from appearing on a number of topics and page types.

A vigilant reader pointed out that the tool could be used on search campaigns as well as content – thereby giving the advertiser the ability to block search campaign ads from showing on error pages and parked domain pages.

Many advertisers hate the idea of their ads appearing on pages that are strictly created for arbitrage – i.e., they contain no useful content, just Google ads. But before you run off to exclude thee pages from your search campaigns, be sure to look at the data reported in the Site and Category Exclusion Tool for these page types. We were surprised to find that in some cases, ad performance on parked domains was very high – CTRs of 25-50 percent, with acceptable conversion rates. Which leads to another AdWords wish list item: let us place separate bids on these page types.

You can see parked domain and error page performance for content campaigns by choosing this new option in the standard AdWords reporting interface:

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One final item for the wish list: let us see this data for our search campaigns.

About the author

PPC Advertising expert David Szetela founded Clix Marketing in 2003, following a 25-year career in technology sales and marketing. He is active in the Search Engine Marketing Professional Organization (SEMPO) and was the author of two lessons in SEMPO's Advanced Search Advertising course. He is a regular speaker at PPC Summit, MarketingSherpa and SES events, and his weekly radio show, PPC Rockstars, is broadcast every Monday at 4 PM EDT on Webmasterradio.fm.