How to Use Bid Adjustments with Demographics and Affinity Audiences

Last updated on by David Sinton in Google Ads, Lead Generation

Earlier in 2018, Google announced a new responsive ad format that gives advertisers an extra headline. But it was a different feature release that has the potential to revolutionize PPC advertising: dynamic bid adjustments.

What are Google Ad bid adjustments and why are they game changers?

Bid adjustments are percentage changes that allow for either an increase or decrease and better control of where ads are shown. They make it possible to target specific audiences with search term bidding, opening the door to significant campaign optimization opportunities. Digital advertisers can now dynamically modify bids for demographics and affinity audiences.

Example 1: Understanding the demographics

The graph here shows demographic reporting for a client campaign at Big Tree Marketing:

Two things are immediately apparent:

  1. Men have a higher volume of clicks
  2. Conversion value of women is much higher

Now look at the impression share data for the campaign (only the past 30 days so that the data is current):

Impression share explains why the clicks for women are lower. But this weaker impression share also highlights the significant opportunity to grow this campaign using bid adjustments.

With a higher value per click for women, as seen in the first graph, scaling up bids for a female audience with a +20% or +30% modifier is a no-brainer.

Example 2: Hiking boots campaign with bid adjustments

Consider this example running a campaign for hiking boots.

This campaign is optimized for gender; however, the same logic can be applied to other demographic groups such as age, household income, or even a combination.

Within this hypothetical campaign, three main SKAGs get most of the clicks:

  1. Hiking Boots
  2. Womens Hiking Boots
  3. Mens Hiking Boots

Notice that the high-volume ad group is the one that is not gender specific. This is typical as users don’t always include gender in their searches. But you can also see that the gender-neutral ad group has lower bids compared with the Women’s Hiking Boots ad group. The apparent reason for the lower bid seems to be that the female shopper converts better. Setting a gender bid modifier within that ad group would help focus on women and optimize the spend.

Using bid modifiers to optimize campaign spend will quickly become widespread best practice. According to a recent benchmark report from Google, 9.64% of top-tier agencies have already incorporated demographic bidding into their campaigns. But if you want to stay ahead of the curve, take bid adjustments one step further and use it to create audience-specific campaigns and landing pages.

What are audience-specific search campaigns?

Audience-specific search campaigns use bid adjustments on generic high-volume search terms to target specific demographics with customized ad copy and landing pages.

Using bid modification can help you focus your campaign on the highest-converting demographic. But even if you target a specific audience, your success is limited if you’re serving that audience generic ad copy and landing pages.

If you know the gender of the person searching, but are using gender-neutral ad copy and sending them to a landing page showing both men’s and women’s hiking boots, you’re missing a big opportunity!

You can use bid adjustments to not only optimize ad spend but also to improve page relevancy and CTR rate. The compounding effect of even small improvements will increase impression share and squeeze out your competitors.

How to create an audience specific search campaign

First, consider this simplified approach using the Hiking Boots campaign from above.

Keep the Mens and Womens SKAGs the same, but break the Hiking Boots (SKAG) into three new SKAGs:

  1. Hiking Boots (SKAG) Gender Female
  2. Hiking Boots (SKAG) Gender Male
  3. Hiking Boots (SKAG) Gender Unknown

Next, set your bid modifiers:

By breaking the Hiking Boots SKAG into three different campaigns with dedicated ad copy and landing pages, you can turn a low value keyword into one with huge potential.

Combining demographic bids to create real-world campaigns

A real-world audience specific search campaign requires bids optimized for multiple demographics.

Imagine you are running a campaign for a health insurance company. You know that more people search for the generic term “Health Insurance” than for “Family Health Insurance” or “High Deductible Health Insurance.” How do you crack the potential of that generic term to convert searchers into customers?

Before bid adjustments, it wasn’t possible to create a campaign for “Health Insurance” that could effectively target all of these people:

  1. A single 26-year-old woman purchasing her own health insurance for the first time, now that she’s no longer covered by her parent’s plan.
  2. A married couple in their 30s looking for a plan that covers their growing family.
  3. A divorced man in his 50s, who is among the top 2% of earners.

Today, you could use bid adjustments to build three “Health Insurance” campaigns optimized for each demographic combination. You could then serve each segment ad copy and landing pages relevant to their specific needs. The result? A higher CTR, as well as a higher conversion rate overall.

Join the case study

BigTree Online is currently launching tests of audience-specific search campaigns (using Instapage) for a variety of clients. Once the tests are complete, we will publish them in a case study for audience-specific landing pages. To be included in the case study, please reach out to david@bigtreeonline.com.

About the author
David Sinton is an SEM expert and managing partner at Big Tree Marketing. Using a metric-based, ROI-driven approach, David has helped over 100 different businesses ranging from startups to recognized luxury brands to develop successful online marketing strategies.