Location Based Bid Adjustments for your Campaigns in Google AdWords

We have learned the basics of device level bid adjustments and how to set them up in the previous blog. We have also discussed how auctions in AdWords work. In this blog, we will see how location based bid adjustments can be set. But before we get into that, lets recap on what bid adjustments are first.

What are Bid Adjustments?

Bid adjustments allow you to set the frequency of your ads. You can adjust the bid based on the time of the day, the location of the user, the device that the user is on when using Google search and more.

Note: Bid adjustments are set by percentages either at campaign level or at ad group level.

You can use location based bid adjustments to target audiences from specific geographies. You can also adjust bids for locations where you don’t want to show your ads.

Say you own a chain of cafes, you can use location based bid adjustments to customize your ads or bid higher for such locations.

How to set Location Based Bid Adjustments?

  1. Pick a campaign to which you want to add location based bid adjustment.
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  2. Switch to setting after selecting the campaign.
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  3. Select the locations tab under setting menu.
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  4. Click on the cell corresponding to the location you want to adjust bid for in the Set Bid Adjustment tab.
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  5. You can either increase the bid or decrease it. Enter a value in the box and click make changes to set the adjustment.
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  6. You can leave the box empty to remove the bid adjustments.
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Additional Information about Location Based Bid Adjustment –

Unlike device level bid adjustments, you can’t set location based bid adjustments at an ad group level. This setting is available only at the campaign level. However, the range of location based bid adjustment is also -90% to +900%. And if you don’t want to show ads for a particular location, set its bid -100% (decrease by 100%).

Note: You can also add new locations to target. In the screenshot below, you see a + locations button left of set bid adjustments. You can target a specific city, a region under the city, a state or a country as a whole too.
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You can also use location extension to target users who are located around your business area. Using the location extension, you can show your business location, phone number, and a marker on the map. You can specify a radius around your business location and bid accordingly using location extension.

An example of Location Based Bid Adjustments –

Let’s say you are advertising on AdWords to promote your new chain of cafes in New York. You have multiple outlets operational in Queens, Brooklyn and JFK Airport, but not in Manhattan. Users looking for a cafe from Queens, Brooklyn and from around JFK Airport are clearly the ones you want to target. You would still want to show up for people searching from Manhattan because you are opening shortly, but you don’t want to bid high. However, you can adjust your bid based on the location of the users to improve the impact of your ads.

  • You increase your bid by 25% for locations Queens, Brooklyn and JFK Airport.Your starting bid: $2.5
    Location bid adjustment: + 25%
    Resulting bid: $2.5 + (25% x $2.5) = $3.125 Hence, for any user searching for a cafe around Queens, Brooklyn and JFK Airport, your bid will be $3.125.
  • You decrease your bid by 20% for location Manhattan.Your starting bid: $2.5
    Location bid adjustment:20%
    Resulting bid: $2.5 – (20% x $2.5) = $2.0

Hence, for any user searching from the Manhattan region, your bid will be $2.0.

The above example is to give you an idea on how you can use location based bid adjustments. Following the above steps you can set location based bid adjustments to your campaigns. We will discuss ad scheduling bid adjustments in the next blog.



How is the new Enhanced CPC going to change the bidding game?

Enhanced CPC

A little about the basics of CPC and auctions –

To understand enhanced CPC (cost-per-click), let’s recap the concept of cost-per-click and how auctions work.

Cost-per-click is the bidding strategy in Google AdWords. Google, therefore, charges an advertiser only when a user clicks on their ad copy. The link in the ad copy redirects the user to the landing page. Google rules out the cost for displaying the ad in this bidding strategy.

When a user searches for a query on Google search, using the keyword in the query as a cue, Google sends ads of different advertisers to the auction. Also, advertisers define a maximum cost-per-click they are willing to pay for their ad to be shown. This maximum bid is extended up to 30% of its original value to benefit an advertiser to beat the competitors. This is only for advertisers who has opted for enhanced CPC. And this is done only on auctions that Google thinks have a chance of conversion. Based on this max bid and quality score, ad rank is calculated. Google decides which ad is shown on the top using ad rank. And the rest of the ads come next in the order of their ad ranks.

What is the new enhanced CPC?

Google’s new enhanced CPC aims at removing the 30% cap on the maximum CPC bid. Instead, Google adjusts the bid automatically while considering the probability of a click leading to a conversion. Google predicts the conversion probability of that particular advertiser’s account based on the historical data of conversions. Other factors including the match type, keyword-query match, location, language, browser, time of the day, date of the month etc. Your bid might increase or decrease as needed. Google believes that this automated bid adjustment strategy will increase the ROI of AdWords campaigns.

The transition from the old strategy to the new –

Even though Google officially announced the launch of enhanced CPC, the transition from the old strategy to the new might probably be slow. Especially, AdWords, as per popular reports, might do a split testing first.

With regular evaluation, AdWords will validate the improvements from the test. If these results show a significant progress, this new automation might get popular among the AdWords community.

An important note for everyone –

With enhanced CPC being still an experiment, at present, the outcomes are only theoretical. Your spend might, first of all, see a spike in the initial weeks. And probably even out in the months to come. It might also go down drastically initially but burst out later. We furthermore aren’t sure of anything as of now. But at AdNabu, we recommend not switching to E-CPC yet, instead use our in-house Bid Optimizer, at least for your campaigns on AdNabu.