Today’s post will provide guidance on using time bid adjustments.  It is the fourth post in a bidding best practices series. Previous posts covered optimization strategies for setting location and mobile bid adjustments as well as prioritization.

In our constantly connected world, people are searching on multiple devices throughout the day for places to go, things to buy, and ways to stay entertained. People often use similar search results in different ways depending on the time of day that they search. For example, if someone is searching for “Hawaii vacations” during the workday, she may just be doing research for an upcoming trip.  When she returns home and conducts the same search in the evening, she may be more likely to have all the info she needs to book the flights and hotels.

With this constant connectivity, search marketers can now receive web traffic from across the globe and around the clock. Most businesses can still identify peak days and times when they see better ROI and lower costs.  At other times, customer activity might be slower and some businesses may wish to drive additional visits even if the cost is a bit higher.

If your business sees regular cycles of customer behavior and AdWords performance during the week, then using the time bid adjustment feature in AdWords enhanced campaigns may make sense for you.  This feature can help you improve results by allowing you to increase or decrease bids by day of the week or time of day.

Getting started with time bid adjustments
Before making any adjustments, it’s important to choose the right level of granularity for analysis.  For example, will you adjust bids by day of the week, eight hour increments, or down to the hour?  While you may be tempted to optimize down to the hour, it’s important to ensure that you have sufficient data to make decisions for each time period.  A general rule would be to have 1,000 clicks and 30 conversions for each time period you’re looking to optimize.

Calculating your time bid adjustments
Once you decide that using time bid adjustments are right for your business, compare the performance of your ads at varying times to your overall performance goal.  This will allow you to easily determine the right bid adjustment for each time period.

If you are setting a goal using a cost per action target, your bid adjustment can be calculated as follows:

Time bid adjustment = 100%* (( Campaign Goal  ÷ Actual Performance) - 1)

For example, let’s say you are an online retailer who sees better traffic and performance on weekdays as opposed to weekends. You would like to target a $30 cost per acquisition overall, but you are experiencing a $25 cost per acquisition on weekdays and a $40 cost per acquisition on weekends.  To meet your performance goal and maximize efficiency you can use a time bid adjustment.  Simply adjust your bids on weekdays by +20%, and on weekends by -25%.  This allows you to optimize for your goal by bidding more aggressively on weekdays when conversions are more cost effective, and less aggressively on weekends when performance is lower.

Test and Learn
Constant iteration is a key part of the optimization process. To ensure you are optimized over time, check the performance for each time adjustment regularly on the Time subtab in your campaign settings. Raise your bid adjustment where your performance exceeds your goal and lower your bid adjustment where your performance falls short of your goal. This will allow you to optimize your bids and adjust to changing consumer behavior.

You should also take this opportunity to study your internal data to understand when you have peak activity in terms of conversion rates, order size, and overall volume.  If you have a physical store or run a call center, you may consider using those hours of operation as guideposts for setting your time bid adjustment.  Studying the volume of activity during the times you are open can give you a good sense of when you may wish to raise or lower your bids.  For example, if your call center is closed during the night, you may wish to decrease bids during this time to avoid sending customers to unsupported lines.  By the same token, if you operate a physical store and see lulls in traffic during certain hours, you may wish to increase bids during this time and run ads with promotional offers to drive more people to your business.

Time bid adjustments are a key part of enhanced campaigns.  To use time bid adjustments alongside location and mobile bid adjustments, you’ll need to upgrade your campaigns.  Starting on July 22, 2013, we will begin automatically upgrading all campaigns to enhanced campaigns.

Later this week, we’ll dive deeper into ways you can use tools like flexible bid strategies to automate your bid settings based on specific business goals like cost per acquisition.

Posted by Ting Zhang, Global Search Solutions