Focus Bids and Budgets With This Reliable Equation

377hOn any given day, your clicks and impressions will fluctuate. It’s one of the reasons I recommend to clients something I follow for myself.

Wait at least a month if not 90 days before you make any serious bidding changes. By the time you cycle a full year, you will have more experience and understanding about what’s going on with your AdWords advertising, as far as figuring out when your ads are hot and when they’re not.

Any changes you make will affect your budget. As a standard procedure, Google asks advertisers to note that you may have up to 20% more clicks in a day and you’ll never be charged more that. Budget-wise, if you’re daily budget is $1 (remember you’re charged for interactions in the search network), your budget will not exceed $1.20 for the day. By extension, your monthly budget will not be more than 30.4* times your daily budget. For a dollar a day budget, that’s $30.40 maximum.

BUT if you decide to adjust your bid to take advantage of certain performance factors, your budget may increase beyond that, and in some cases, slap you in surprise.

What is a bid adjustment?

A bid adjustment is an optimization strategy that allows you to increase or decrease your budget, helping you to maximize exposure when the conditions are optimal and minimize spending when they’re not. You can adjust your bid based on many thresholds including reaching a certain CTR, during certain times of the day, or even by device! It’s useful if you use it properly.

When you do reports, you’re able to see how certain keywords and ad groups are doing on specific days and even during specific times. For example, you see that you’re Steampunk Romance ad group is getting most of its traction between 6pm and 9pm every day. Of course you want to make sure your ads are ramped up at that time. You can choose to increase your Max CPC bid by a certain percentage every day for that time frame.

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For this example, you choose Ad Groups from the drop down menu and change frequency to daily at 6pm

So you decided to increase the bid for that ad group every day by 10%. Things are going wonderfully until you realize that your budget of $1 per day for that ad group has now become almost $1.50 a day.

What happened?

While you did increase your bid by 10% daily at 6pm to start, you forgot to decrease you bid back to its original amount at 9pm. As a result, your daily bid was increasing by 10 percent every day…$1 to $1.10 to $1.21 to $1.33 to $1.46…and so on.

That’s a simple fix as you can end the adjustment and return your max bid to $1 a day. But that 6pm to 9pm bump is still there and you want to take advantage of it.

No problem.

You stick to your increase of 10% daily for that time but you remember to decrease your CPC back to normal at 9pm. So if you go up by 10%, which means that you just decrease by 10% at 9pm right?

Not so fast. The percentage increase does not necessarily equal the decrease percentage. There’s a quick formula you can use to find out the percentage decrease you should use:

d=(100*x) / (100+x)

where ย d = decrease percentage and x in increase percentage.

In this case:

d = (100*10)/(100+10)=1000/110=9.09 or 9.1% (you can probably use 9%)

Again, bid adjustments are great tools to use if you’re comfortable using them. You need to keep an eye on your budget and keep the number of bid adjustments to a minimum as they multiply your bid. Your 10% ย increase here can be ย combined with a 5% increase there if you’re not careful.

Note: *30.4 is the average number of days in a month

What do you think about bid adjustments? Ever used them? Comment below

 

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