In this video, you're going to learn about bidding adjustments for your Google Shopping campaigns.
Maybe your products sell better on Sunday, or maybe mobile users convert higher.
Bidding adjustments allow us to tell Google to bid more, or less for these variables.
This allows us to get more granular with how we pay for our traffic.
This is a key part of optimizing our campaigns for profits,
and I'm going to show you exactly how we do this for the stores that we work with.
Now why would we add a bidding adjustment, and how much should we add?
Let me illustrate this right now.
Let's say you run your Shopping campaigns and you get conversions from mobile users,
desktop users, and tablet users.
We can go into the devices section of our Google Shopping campaign
and see how each of these performs.
It should look something like this.
We can see that for desktop users we're performing above average,
for the campaign ROAS is 32.85, even though the campaign average is 31.4.
It's a small difference, but I'm going to use this to show you the magic of bidding adjustments.
We're getting a lot of sales, which at a 30% profit margin is resulting in $450K
in total profits.
We then take away our ad costs which results in $405K in profits for desktop, but I think we can
increase these total profits, even though it's going to cost a little bit more, to get this too.
So, let's say we add a bidding adjustment of
10% that means on average, our average cost per click for desktops will increase by 10%.
So now our new cost will be $54,811 because we're now paying more for these clicks,
but increasing our bid means we'll place higher in the search results.
This means we'll get more clicks for desktops too.
So let's say we get 10% more clicks, of course this will vary depending on the competitors in
the auction, and other factors like your quality score, but it's a good estimate.
So instead of getting 92,000 clicks we're now getting 102,000 clicks, which is 10% more.
So yes, this means that we'll now have higher costs, which is now $55, 000 for this campaign,
but as long as we keep the same conversion rate, these new clicks result in more sales.
So our total conversion value i.e. total sales for desktop
increased from $1.5 million to $1.65 million.
Using our profit margin, we can now see that even though we're paying more for our clicks
and we have a lower ROAS than before, it actually resulted in more profits.
Here our profit after paying for ad spend is now $441,000, which is a $36,000 increase from before.
This is a great example demonstrating how ROAS and total volume of sales,
balance out leading to net profits.
There's definitely going to be a point where you could increase your bidding adjustment too much.
This is where you get more sales, but the actual
cost per sale increases too much that the net profit starts to decrease.
You can imagine it kind of like a curve like this, and we're trying to find the sweet spot.
As you can see by making small strategic bidding adjustments,
we can focus on what parts of our campaign are performing well and generate more profits.
The same can be done in the opposite direction with negative bidding adjustments.
This means adding a negative bidding adjustment for the variables that are
not performing well. to try and move it in the right direction.
A question I often get asked is, how big should the bidding adjustment be?
Well it's something that you play by ear,
but I generally keep mine to about 5-10%.
It depends on how well that dimension is performing compared to the campaign average.
Because of the complicated way that the auction works and all the variables at bay,
including the market, the search volume, and other competitors, I like to make small
incremental changes and watch how this affects the results.
Another thing to keep in mind is that every single bidding adjustment
you make, adds to every other one that you've already made.
This is why I keep my bidding adjustments between 5-10%.
I don't want to see huge spikes or dips in my CPCs
if a search matches all the variables for my bidding adjustments.
For example say you added a 10% bidding adjustment for Sunday, and a 10% bidding adjustment
for people in New York, and a 10% bidding adjustment for people using their mobile phones.
Now, if someone is searching on a Sunday, in New York, on their mobile phone,
you're going to pay 30% more for that click.
This may be very well worth it, but you'll see that these
bidding adjustments can really add up.
Especially if some search matches
all the different bidding adjustments you've had in place.
So what are the different bidding adjustments that we
can make for our shopping campaign?
Here they are:
1. Location.
You might find that different states, cities, or regions, perform differently.
For example if you're selling surfboards,
people near the coast are probably going to convert higher than people inland.
Now, this doesn't mean that people that aren't on the coast are never going to buy a surfboard,
but we can tell Google that if someone is on the coast then we want a bit higher to
get that click.
2. Next, we have time of day and day of the week.
Maybe your customers convert better on a Sunday.
We can adjust our bid based on the time of the day, the hour,
or the day of the week to tell Google we want to get that click.
3. Next, we have devices.
Maybe your customers are more profitable for you if they're on their desktop,
as opposed to their mobile, or a tablet.
We can check this performance and bid more, depending on this Variable.
I'm now going to show you how to open the reports to read
the data and then make the bidding adjustments based on what's working.
We often make bidding adjustments at least once per
month, depending on how many conversions the campaign is getting.
We do have a full video giving you a schedule of what to optimize in your campaign,
apart from just doing bidding adjustments.
I'll leave a link to that video down below.
Let's now make some bidding adjustments.
Let's start with location.
We're going to open up our Google Ads account by going to ads.google.com.
Click Shopping campaigns on the left, and then click on the shopping campaign we want to analyze.
I'm going to start with this one here.
We'll then find the locations menu item on the left.
You'll see that right now it's showing the country,
which is the whole entire location we're targeting with this campaign.
But we want to see how different areas of the country
like states, or cities perform and make adjustments on that level.
This is because if one state is generating way more profits,
we want to focus in on that state, and get more sales there.
So click on the country name.
Here it's the United States, and click on states or regions in the list.
If you don't see states you can just select region, or even city.
Keep in mind that the more micro you go,
as in looking at smaller regions, the more clicks you'll need across the entire campaign.
This is because as you drill in smaller and smaller, you still
need enough clicks for that area to be statistically significant.
If your campaign only has 1K-2K clicks, you want to stick to bigger regions.
You're then going to see this report, it's going to break
down all the states in the country with all the metrics for each one.
We also want to change our date range at the top here.
I'm going to put "All time", because it's
the first time I'm optimizing the location data for this campaign.
If this isn't the first time you're doing this, I recommend setting the date period
to be since the last time you made a location bidding adjustments, until now.
Now we have these columns here, but we want to see some
more data like ROAS and sales.
Click on columns, and click "Modify columns".
Let's remove all the columns here, and start from scratch.
Click "Performance", and in this exact order click the check boxes next to:
1. Impressions 2. Clicks
3. Cost 4. Average CPC
Then we'll scroll down and click "Conversions",
and in this exact order click the check boxes next to:
1. Conversions 2. Conversion value
3. Conversion value divided by cost
Click "Apply", and we'll now see the data for each state and we can start analyzing.
Next thing we'll do is make sure we select
the column "Clicks" with the downward arrow so it sorts by descending order.
This allows us to see the states that are generating the most clicks.
An important point to note here is that we shouldn't make changes unless we have enough data.
If a state only has 10 clicks, it's really not enough to make any informed decisions at all.
This is all about averages.
I you have a thousand clicks for a state or in this example 42K for California, we have
more confidence that what has happened so far is much more likely to repeat again in the future.
With more data, there's less feature variation, in general.
This is in essence the foundation of statistical significance.
So take a look at your own data.
Ideally you want to have over 2K clicks in your campaign and then
focusing on the states that have at least 200 clicks.
In this campaign we have over 300K clicks,
that's a lot of great data to optimize.
So we're going to scan down especially looking at the conversion value over cost column,
which is the ROAS for that state, and note any states over performing
or underperforming compared to the average for the entire campaign.
Which can be found here.
For example we can see that Hawaii is killing it with a ROAS of 161,
but look at the number of clicks.
There are only 45 clicks out of Hawaii for this campaign.
I honestly wouldn't trust this, and I wouldn't go making any drastic changes to my campaign just for
Hawaii, but if we look down and see in Connecticut it's got a ROAS of 43 with over 4K clicks.
This is a good 30% increase on the ROAS for the whole campaign.
With this in mind, I would add a bidding adjustment to increase our bid for Connecticut
to try and get more customers from that state.
This is because so far these customers have been much more profitable,
than the average for the whole campaign.
So even though if I bid more for these customers, I'm
going to pay more to convert them, the increased amount of sales from making this bid adjustment is
going to lead to more sales, which means more profits at the end of the month.
Likewise, scrolling down and seeing states like Missouri with a ROAS of 16,
even though the whole campaign is doing an average of 31,
means that it would be a good idea to add a bidding adjustment for Missouri.
The bidding adjustment would not be a positive one, it would be negative.
What I mean here is that Google will reduce
our bids for people in Missouri when they search and trigger our campaign.
So how do you actually make bid adjustments?
You'll see here that this is just an informational column,
it doesn't actually allow us to edit the bids.
So what we need to do is click the "X" at the top, and go back to all our targeted locations.
Now, we need to add a new location so we're targeting all of the United States,
but we also need to target Missouri.
Once we do this, we'll click "Save'.
We'll then see a report that looks just like this,
that allows us to directly edit the bids for that individual state.
Once I've made the bidding adjustments,
I want to make, I'm then going to watch the performance closely over the coming weeks.
You'll want to see, on average, how this change altered
the performance of your campaign, and then rinse and repeat.
Now, let's look at time of day, and day of the week.
You can find these reports here.
Similar to locations on the left-hand menu, underneath "Add schedule".
Here we see the one broken down for day.
This is the exact same process as with locations,
but we're now looking at days of the week or time of day.
Now, make sure that you're viewing the right columns again of course.
Go to columns, and then "Modify columns", and now we can analyze our data.
So we have the same ROAS for the campaign of 31,
but there is some clear variation between the different days of the week.
Sorting by conversion value over cost, we can see that Sunday performs
about 10% above the actual average for the whole campaign.
It's also getting the most amount of sales, and the most profitable sale.
So I definitely want to explore putting a bid adjustment for days of the week,
and Friday - man that's not performing well at all.
I'll definitely add a negative bid adjustment for Friday too.
Now, even though this is just the report, to actually edit your bid adjustments go
to "Ad schedule", and then add in the actual days you want to adjust bids for.
You can also do this for hours of the day,
and also split it up for actual hours of a day, in the week.
This means that maybe you want to adjust bids for Sunday
at 5-6 p.m. because this is performing so much better than any other hour of the week.
Just like with locations, you want to make these adjustments and then check back in a few weeks,
review how the changes impacted your results, and then rinse and repeat.
Lastly, let's look at devices.
You can find this by going to the devices menu item on the left-hand side.
I can see here that there is some variation between all the devices for this campaign.
Interestingly, tablets are performing better than computers and mobile phones,
but the actual volume of conversions isn't that high.
Keep in mind here, that this is going to tell you some more information not just about mobile users,
but also how your website converts on mobile versus computer or tablet.
Just because I'm performing under the average for mobile phones,
I wouldn't necessarily add a negative bid adjustment.
I would look into why are we not converting on mobile phones.
Look at the conversion rate, it's less than half of what the conversion rate is for computers.
So if I could just increase the conversion rate that would push this much higher with
more profits, without increasing the cost, without just focusing on paying less for that traffic.
As you can see, you need to attack your data with this strategic mindset not just following
robotic instructions, but thinking about what could actually cause these results.
In this case here, I would add a bidding adjustment of plus 5-10% for tablets.
I would then look into improving the conversion rate for mobile phones.
I don't think it's worth adding a negative bit adjustment for mobile
phones because I can clearly see that the conversion rate differs significantly,
between mobile phones and computers.
But, if I still can't get that conversion rate to budge,
I would then add a small negative bid adjustment to try and bring up that ROAS for mobile phones.
That's how we do bidding adjustments for our Google Shopping campaigns.
If this video was helpful guys, please give it a like and let me know in the comments down below.
If you're watching this video on YouTube,
it's actually part of our free Google Shopping course on our website.
It's 100% free, with no signup required.
It shows you how to set up, optimize, and scale your Google Shopping campaigns for more profits.
I'll leave a link down below, go and check it out.
Otherwise thanks for watching this video guys.
I'll see you in the next video.
Bye for now.