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How to Calculate Your Bid Adjustments in Google Ads

Bid multipliers, adjustments, modifiers, whatever you know them by, are an integral element of Google Ads. These handy little additions (multiplications?) provide a lot of scope for campaign tailoring. With the option to alter bids by time, location, device, audience and targeting methods, you can get very specific in your bidding strategy and how aggressively you bid for certain sectors.

Why Use Them?

Bid adjustments are exactly what they sound like – a percentage multiplication of your default keyword bid, based on a specific dimension. For example, if you see that a particular campaign converts much better on mobile devices, you can bid more for mobile. Likewise, if you see that campaign conversion rate drops on Thursday afternoons, schedule your ads to bid less for this part of the day.

Where Can I Use Them?

Multipliers from -90% to +900% can be applied to a wide range of dimensions you'll find in Google Ads and can be set at different levels of granularity. Remember that the most granular level of adjustment will take precedence.

  • Location multipliers can be set at campaign level. These can be as broad as countries or as narrow as postcodes. The more specific your geographic data, the more accurate and beneficial the applied bid adjustment will be.
  • Hour of day and day of week multipliers are also set at campaign level. These are particularly useful, for example, if you have a campaign where performance differs between weekends and weekdays. Setting a custom ad schedule allows you to specify exactly when you want your ads to show and when you want to bid more or less aggressively.
  • Device multipliers alter your bids for mobile devices and can be set at both ad group and campaign level. An exception to the granularity rule here – if you have a mobile adjustment of -100% at campaign level, this opts you out of serving ads on mobile and any adjustments at ad group level will not apply.
  • Audience multipliers can be applied at the ad group level to audiences that have been overlaid onto your campaigns. For example, bidding more for those that have been on your site in the last week. When overlaying bid-only audiences onto your search campaigns, wait to see how each list performs before adding adjustments. Demographics also fall under audience adjustments, allowing you to modify your bid for users of a particular gender, in a certain age bracket or with a certain household income.
  • Targeting method multipliers can be set at ad group level within campaigns that run on the Display Network and the Search Network. For example, you may have an ad group that primarily uses contextual (keyword) targeting but you've found one or two interest categories that convert particularly well. You can then add these as a second layer of targeting and apply bid adjustments to each. Your contextual bid will be your 'default', but your bid will be multiplied for users that also fall into this interest category.

How Big Should They Be?

When you can apply multipliers anywhere between -90% and +900%, is the precise percentage just a shot in the dark? Of course not. There is a simple calculation that can be done to reach the exact percent with which to multiply your bids. Let's take, for example, location multipliers, starting by downloading a geographic report to see what data you're working with.

To narrow down the long list of towns and cities you'll be faced with, set a filter to see the most relevant data. If conversions are your campaign goal, filter by conversion volume. This will differ between campaigns, accounts and industries. Start by looking at locations with a volume of more than 10. Now sort the data by conversion rate – the metric on which to base your multiplier decisions. Take a look at the average conversion rate across the campaign and use this as the benchmark rate to compare to the individual conversion rate for each location. Now apply the following calculation:

For example, Aberdeen has a conversion rate of 7.69% and the campaign average is 5.52%. This results in a +39% bid multiplier. To apply, add Aberdeen as a targeted location in the settings tab and apply the multiplier directly in the interface.

If the purpose of your campaign is to drive traffic to your site or your conversion volumes are too low to make a sensible decision on bid adjustments, the same principle can be applied to other metrics such as clickthrough rate. Of course, if you solely base your adjustments on CTR, you'll want to also factor in engagement metrics such as bounce rate. You don't want to bid aggressively for a dimension with a high CTR if the majority of those users are bouncing! Similarly, if your dimensions reports reveal a particular location or day part with a high spend but lack of conversions, applying a negative multiplier will ensure your bid is lowered for poor quality traffic.

What Happens With Multiple Adjustments?

So, you've strategically gone through every dimension of every campaign, but what does this mean for your final bid that enters the auction? How do you quantify several bid multipliers when used in combination? The important thing to remember here is Google performs the multiplication of your bid adjustments, not the sum. To illustrate this, take the example of a default keyword bid of £1 and the following adjustments: +20% for Mondays, +30% for Norwich and +10% for mobiles.

Instead of using the sum of the adjustments to result in +60%, each adjustment is applied sequentially to the multiplied bid. The final effect on your bid is a 72% adjustment.

How Do I Keep Track Of My Adjustments?

As with all optimisation you do in your Google Ads accounts, bid multipliers should be reviewed. The landscape of your data and the way each dimension performs will change with time. Make sure to review performance regularly to check your adjustments are having the desired effect. Revisit the data and be sure to recalculate adjustments once they've had a chance to work their magic – they will likely need tweaking.

If you're not using any automated bid strategies, the granular targeting available with bid adjustment application is a quick win to make the most of your high converting dimensions. So get calculating and watch your conversion rates grow.

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