While Google Adwords has many optimization points to it that will help you with turning your advertising dollars into profit, there is such a thing as over-optimization, when it comes to Adwords. Oftentimes, it is obvious that too much tweaking and knob-turning is going on within the account, but there are other times where you may not realize your knob-turning and tweaking may be a little bit overboard. We’ll discuss some things to be aware of while you are optimizing your Adwords account that may just help you open your eyes a little more to see if you are either over-optimizing your campaigns or not.
Over-optimizing Bid Adjustments
Bid adjustments may be the #1 optimization point that many people use a bit too much or too often when it comes to over-optimization of campaigns. We can often get caught up in quickly adjusting a bid at first glance, and not taking into consideration the date range that will give you more data to make a clear determination. We see a number, and sometimes it is just a reaction or impulse to make a quick bid adjustment if the numbers do not look like what we want them to. The thing we want to keep in mind is that historical data will guide us in the direction of the correct bid adjustments more often than not. Depending on how fast or how slow your data is coming in, sometimes you need a longer date range to determine where or how much to bid adjust. Opposite of that, there are accounts or campaigns that collect data rather quickly, which can need less of a date range span to get some good optimization data for bid adjustments.
The problem with shorter date ranges when it comes to bid adjustments is that there are times when certain products or services are trending from month to month or season to season where you could over-optimize by not taking into account these trends. Optimizing during a trend can be very tricky, especially if you do not know that there is a trend going on. Pushing up bids during a trend can often cause a chain reaction amongst yourself and competitors which would drive up CPC’s (Cost Per Click) for everyone. Bidding wars are not fun for anyone, especially if they are spawned by one competitor coming into an adspace for the first time and they come in at a super high bid. So it is pretty critical to stay on top of trends while you are working on bid adjustments in shorter date ranges. So some good advice would be to stay on top of your trends or times things are not trending, so that you do not get caught up in any forced bidding wars that could potentially drain your budgets rather quickly.
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Other Possible Points to Be Aware Of With Over-optimizing Campaigns
Of course we have so many tools and little ways that we can squeeze out as much from our campaigns as possible, but they all do not have to be used just because they are there at our disposal. A bid adjustment here, a bid adjustment there can all but cancel each other out and be useless when it is all said and done. Many times when companies or businesses try to run their own Google Adwords accounts for the very first time will see all of the buttons and tweaking tools, then feel that they will get much better results if they take advantage of all of them at the same time. Just because these tools are there and ready for use, does not always mean that they are the best thing for your particular campaign or business model. With improper or over-optimized bid adjustments you could end up placing a $1 bid on a keyword, and when all of your additional bid adjustments that you feel are necessary are activated as well, you could very well end up paying $3-$4 for a single click. You may not even realize how this is possible until it is too late.
Here are some examples of how over-optimizing can hurt or turn a lower bid into 2-3 times the amount that you intended or are willing to pay for. One of the big capabilities we have now within the Google Adwords interface is Bid Adjustments for Computer, Tablet, and Mobile devices. The device bid adjustments can be applied to increase bids by a certain percentage or by a specific dollar amount each time the searcher of that device triggers one of your ads. So for example, we will take the $1 bid that we mentioned earlier, and then place a 50% increase bid adjustment for Mobile device users. With this single mobile device bid adjustment, you have just increased your potential CPC to $1.50, which is not too bad when you think about it and if your mobile device users are a big part of your conversions are worth a bit more than computer or tablet traffic.
Now let us stay with that example of a $1 bid along with a 50% bid increase for mobile devices. In addition to that, let us use the Ad Schedule bid adjustment of 50% increase on Monday’s which you get the most conversions on. With this additional bid adjustment, you have now turned your $1 keyword bid into a potential $2 per click bid just by making 2 additional bid adjustments at the same time. The point being that you really have to be careful when it comes to all of the bid adjustments that Google Adwords gives you. Just because they are there to use and readily available does not mean that you have to use them. And in the example I gave above, there are at least 2 other bid increases besides the device bid adjustment and the ad schedule bid adjustment that are often used which could all but triple your intended cost per click.
– Bobby Pena, PPC Manager