Back in late July, Google’s Matt Lawson posted on Search Engine Land explaining Google’s official point of view on the announcement of device bid adjustments at the Google Performance Summit in May. Although the article deals primarily with structural issues, the advice given on device bidding is to utilize AdWords Smart Bidding, which includes device performance signals in its algorithm.
In pursuit of performance, Lawson’s answer for advertisers may not be entirely satisfying. In recognition of this, we will cover the tactical calculation of device bid adjustments for so-called “condensed campaigns*.”
Bid Adjustment Formula
On the surface, it all boils down to a pretty simple formula:
(device “metric”/campaign “metric” average)-1)*100 = device bid adjustment
What this formula does is relativize the performance by device to the campaign average. In practical terms, this means that if mobile is outperforming the campaign average, you would want to increase your mobile bid adjustment in order to get more mobile impressions and impression share. In these terms, the formula is an asset allocation strategy, because as your bids shift by device, you are allocating differing percentages of your campaign daily budget to that device type.
*Pro Insight: Condensed campaigns are those that treat all three devices in the same campaign.
Best Metrics to Use
Google’s line has always been to bid to value. If there is one thing that Lawson gets right in his evaluation of how to manually calculate device bid adjustments, it is that advertisers need to account for the full value of mobile before making value-based bid assessments per device. However, the tricky part comes when trying to determine what metrics should be used for the above formula.
Others have proposed a number of different metrics for calculating these adjustments, but what’s important is choosing a metric that best supports your goals. For instance, if you are an eCommerce advertiser, you might want to use the conversion value/cost ratio. Lead gen? Conversion rate might be best, although some models use CPA. If you can assign approximate values to your leads, you will have better grounds to bid to value.
Using Campaign Average as the Baseline
The reason we are relating device performance to the campaign average is that it doesn’t make sense to compare the devices to one another any longer. Previously, mobile would be compared to desktop, because desktop was considered the “baseline**.” Now that adjustments are available for all three device types, there is no great method for determining which device should be considered the baseline, and this process gets unnecessarily complicated.
**Pro Insight: It’s extremely important to note (and this is direct from Google): Max CPC is device agnostic! It is not your desktop bid; it is the base bid before any adjustments are taken into account.
How to Apply the Bid Adjustment Formula Output
In order to successfully apply the calculated adjustment, you need to either increment or decrement the existing bid adjustment. If it is your first time applying a device bid adjustment, this process is relatively straightforward. However, if there is an existing adjustment, you should multiply the existing adjustment by the new formula output (in decimal format), and then add that product to the original adjustment. See the below example:
| Original Adjustment | Formula Output | Incremental Adjustment | New Final Adjustment |
|---|---|---|---|
| +40% | +20% | +8% | +48% |
The reason the math works this way is that the device bid adjustment formula calculation includes the existing “original adjustment”. Thus, any output of this formula is an incremental gain or loss to the original adjustment. Simply adding or subtracting the amount is insufficient, and would yield an over-adjustment in either direction. Read the formula output in the above example as “20 percent more than what you’re already adjusting.”
Additional Cautions
Updating your device bid adjustments is an extremely important account maintenance item, but as you raise or lower them, you need to keep in mind the correlated metrics to ensure you are achieving your goals. Among others, there are three important metrics to watch:
- Average CPC because your Max. CPC is never what you actually end up paying for a click. It is helpful to keep in mind the net result of the ad auction for a keyword, on average, with your Max. CPC bid and all bid adjustments taken into account.
- Average position because the SERPs vary by device, and you may overpay for high positions if you continually increment your bid adjustment. Conversely, you may be suffering from low average position because you aren’t aggressive enough on your adjustments.
- Impression share because diminishing returns are real, and if you reach your desired or theoretical maximum impression share for a campaign, you should consider what benefit an additional incremental bid adjustment would have.
Finally, it’s important to always ensure that you have enough data to base your adjustment on, and that the date ranges for which you are calculating your adjustments DO NOT OVERLAP. Based on account size, schedule a recurring day every 1-4 weeks to check in and re-calculate a new adjustment for campaigns. Yes, this “device bid adjustment re-balancing” is that critical to account health!
This is where we would like the audience to weigh in with comments or on Twitter: What metrics do you use for your device bid adjustments?
Leave your answer in the comments below or tweet Rocket Clicks at @RocketClicks.
