Should you use bid adjustments in Google Ads?

Are bid adjustments in Google Ads still a "thing"? In Episode 65 of Inside Google Ads, host Jyll Saskin Gales tackles your questions about bid strategy adjustments. First, Jyll provides alternatives to manual CPC with location bid adjustments. She emphasizes the importance of addressing the root cause to guide automation effectively. Next, Jyll explains Google's customer lifecycle goals features in detail, which you may know as "bid for new customers only" mode. She proposes a practical rule of thumb for when these features might be beneficial. Finally, Jyll answers a philosophical question about the impact of your bidding strategy on Google Ads performance.

Plus, be sure to stay tuned until the end of the episode for a new Insider Challenge to solve!

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Transcript

Should you use bid adjustments in Google Ads? What about bidding for new customers only? Just what role does your bid strategy play in Google Ads success? 

I'm your host, Jyll Saskin Gales. I spent six years working for big brands at Google, and now I work for you. 

This is Inside Google Ads: Episode 65, Bid Adjustments. 

Our first question comes from Abby Nelson on LinkedIn, and she says, I’m curious on your thoughts on manual CPC when you need to do a bid adjustment for a certain location, which max conversions would override. They are too close in proximity to have separate campaigns, but one location typically needs more leads than the other. And that's when I would do a bid adjustment in the past. 

Here's what I think about this.

Obviously, every scenario is different, but my general rule of thumb in Google Ads is to try to address the root cause so that the automation does what I want, rather than trying to force it manually after the fact. 

Let me explain what I mean. To guide the automation in this scenario, I would try to inflate the conversion value from the location that I want to get more leads. I could do this in-platform, potentially through conversion value rules, or I could do this with Offline Conversion Tracking, sending back higher values for one location than the other. If I do this, I can then use Target ROAS bidding rather than manual bidding, go all in on the automation, and feed data that will cause it to prefer one location over the other. 

For a different, perhaps simpler solution, I could have separate campaigns with a shared budget and then different target bid strategies. If I really do have these two locations in close proximity and one needs more of a push than the other, for the one that needs more of a boost, I would give it an easier target to hit. So a lower ROAS or a higher CPA. That way it's going to guide Google towards helping that campaign more while still ensuring both of them get some love. 

That's the kind of mentality I would use to puzzle through a problem like this. Rather than sticking with manual bidding just so I can use manual bid adjustments, I would figure out how I can work with the automation to achieve my desired outcome. 

Before we get to question two, my first book, Inside Google Ads: Everything You Need to Know About Audience Targeting is available now on Amazon. Simply go to Amazon, whatever country you're in, search for “Inside Google Ads,” you'll probably see this podcast there and you will also see my book. Or you can follow the link in the episode description for the Amazon US listing.

Our second question today comes from SAQ on TikTok, and they say, hi Jyll, please can you advise me if I should have my campaign on bid equally for new and existing customers or bid for new customers only? Which is better to use? 

Google calls this customer lifecycle goals, and it's like putting a little booster around your bid strategy.

These lifecycle goals are compatible with Performance Max, Search and Shopping. There are some new ones in beta right now that are currently only compatible with PMax. So the two customer lifecycle goals you can choose are New Customer Acquisition, which you asked about here, and Customer Retention, which is in beta right now. 

Within New Customer Acquisition, there's New Customer Value mode and New Customer Only mode. You got to love Google's predictably confusing naming conventions! New Customer Value mode tells Google that you want to reach both new and existing customers, but it should bid higher for new ones - value. So this is like bid adjustment for new customers. And then New Customer Only mode tells Google that you only want to reach new customers. Think of this like a negative 100% bid adjustment on existing customers. 

Now, in order for this to work, you need to be leveraging customer match. That's how Google will know who is an existing customer and who is not. Then, for the most part, you need to be using a value-based bid strategy, which means Smart bidding and more specifically, Maximize Conversion Value or Target ROAS bidding. 

Okay, now that we understand the options, which one should you use? 

For most businesses, I wouldn't use any of this. This is really for larger retailers, think Lululemon or Target, who need to really differentiate between their millions of customers and the much harder to find new customers.

I'm going to make up a rule of thumb now, Jyll's new guidance for customer lifecycle goals. So please feel free to push back and poke me on it. I'm going to say that unless at least 1% of the population of your target market is already on your customer list, you probably don't need this. So let's say you're targeting the United States, 340 million people, 1% would be 3.4 million people. Unless you have 3.4 million people on your customer list, you don't need to be using customer lifecycle goals. 

Let's try out this with something smaller. What if your target market is women in the UK? The UK population is 68 million, let's say half are women. So our market size is 34 million and 1% of that would be 340,000. So unless you have 340,000 UK women on your customer list already, you probably don't need to be using customer lifecycle goals in Google Ads. 

What do you think of this rule of thumb? Helpful, flat out wrong? Feel free to let me know. 

To learn more about bidding and which bid strategy might be right for you, I've got a lot of Inside Google Ads episodes on that topic. You can look out for Episode 1, Episode 15, Episode 26, Episode 34, Episode 42, Episode 50, and Episode 55.

Now, a hot tip for you, when I give you an episode number like Episode 15 or Episode 42, you can simply go to jyll.ca/InsideGoogleAds/number. So if you want to see, what's Episode 34 about? That's jyll.ca/InsideGoogleAds/34. And there you'll find the link to watch the episode on YouTube and then you can read the full episode transcript as well.

Y'all always ask me the most questions about bidding. So we cover it a lot on this podcast, which is why this is now our eighth episode about your bidding questions.

Our final question today comes from MD Alamin Ma on LinkedIn, and they say, how impactful is your bidding strategy in Google Ads? What kind of role does it play?

Here's another new “Jyll-ism” for you. I put this together for my SMX Master Class: Beyond Search, which you can still buy at the link in the episode description if you like. I'm calling it the “Triangle of Google Ad Success.” I’m open to naming suggestions.

There's three key things you need for Google Ad Success. And I put them on the corners of a triangle. Bidding, targeting, creative. 

Now, of course, all of this requires a solid foundation with your conversion tracking. So once conversion tracking is in place, the three key things you focus on for Google Ad Success are bidding, targeting, and creative. Bidding is how you tell Google what your goal is. Targeting is how you determine who sees your ad. And creative is how you get them to your website. 

I've shared this in conference presentations before, there's some third-party research that says that creative is responsible for 50% of the sales impact of your advertising. And that's more than any other factor. So we know creative is important.

And targeting, well, I just wrote a whole book about that. So obviously, I think that's quite a fruitful and important factor.

And in addition to all of that, I will say that you can have the perfect targeting and the perfect creative, if such a thing even exists, but if you pick the wrong bid strategy, your campaign will not do what you want it to do, or rather, Google will do exactly what your bid strategy tells it to do, even if that's not actually what you want your ad investment to achieve. 

So to answer your question, how impactful is your bid strategy? Highly impactful, because the role it plays is telling Google Ads what you want it to achieve.

Bid adjustments are one tool you can use to guide that bid strategy. But in general, you're going to want to use tools like that to help the automation, guide the automation, rather than trying to use tools that will try to tamp it down or fight with it.

Today's Insider Challenge is this. Let's say that you're using Maximize Conversion Value bidding. How would you decide whether you should move to Target ROAS or not? 

The beauty of the Insider Challenge is there's no right or wrong answer, just an opportunity to stretch your brain on real life Google Ads problem solving. 

Last episode was our special book launch episode. 

So before that, Episode 63, the challenge was this. Let's say your target audience is people who own sports cars. How might you leverage Custom Segments or Interests or search terms to reach people who aren't just interested in sports cars, but who own a sports car?

And this came up on a coaching call where, again, my client’s target audience wasn't sports cars exactly. It was something related to that. And so they had targeted people who were in-market for that thing, or who had interest in that thing. But that's not the same as someone who already owns that thing. 

So some things we thought of are, OK, if you own a sports car, what are some of the kinds of things you're going to search for? We don't want to have those as keywords in a Search campaign because we don't sell that. But if people are searching for those things, that tells us they own a sports car and therefore would be in the target audience for our product.

Maybe it's people searching for model or part numbers to do with very specific sports cars, searching for servicing, or something to do with their specific car models.

This is really helpful to keep in mind when building your targeting strategy. Someone who is in your target audience may be searching for things that you don't offer, but that would be an amazing signal that that's the kind of person you want to reach. 

A mistake I often see people make is putting those things in as keywords, even if you don't offer those things. And guess what? It's not going to go well for you for so many reasons, but leveraging those within a Custom segment or a Custom search term is a really powerful way to reach your target audience.

I'm Jyll Saskin Gales and I'll see you next time Inside Google Ads.