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Optimizing Bid Adjustments for Mobile Ads

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In February 2013, Google announced Adwords enhanced campaigns which combined desktop and mobile advertising efforts into a single campaign. Advertisers set their mobile bids by applying a percentage-based bid adjustment to each campaign.

google adwords mobile bid adjustment

The default setting for each mobile bid adjustment in Adwords is 0%. Advertisers who don’t want their ads to show on mobile devices will simply set the mobile bid adjustment to “decrease by 100%”. But what if you want your ads to show on both desktop computers and mobile devices? I’ve seen many accounts that simply apply an arbitrary 25% or 50% reduction to all campaigns, but this is often just a guess.

How do you determine the optimal bid adjustment?

We can start by measuring cost-per-acquisition:

 CPA = \frac{Cost}{Conversions} = \frac{CPC * Clicks}{Conversions} = \frac{CPC * Clicks}{CR * Clicks} = \frac{Cost\ per\ Click}{Conversion\ Rate}

So for each campaign, if you want to achieve a CPA from mobile advertising that is equal to your CPA from desktop advertising, set your mobile bid adjustment such that the resulting CPC is proportional to the percent difference in conversion rate between your mobile and desktop advertising.

To figure this out, you will need to use Google Analytics. In the “Audience” report, click on Mobile -> Overview. Under the graph, you should see a table similar to this that shows your traffic and conversions by device type:

conversion rate by device type

You’ll want to filter the data for paid search traffic. As you can see in this example, desktop paid search traffic has a conversion rate of 0.93% and mobile paid search traffic has a conversion rate of 0.19%.

Next, for simplicity, let’s assume your desktop CPC is $1.00.

 CPA = \frac{\$1.00}{0.0093} = \frac{x * \$1.00}{0.0019}

where x is a bid multiplier for mobile traffic.

 CPA = \frac{\$1.00}{0.0093} = \frac{x * \$1.00}{0.0019}  0.0019 = x * 0.0093  x = 0.20\  or\ 20\%

This means that, in aggregate, my mobile bids should be 20% of my desktop bids in order to maintain the same CPA as my desktop traffic. So in Google Adwords, I would set my mobile bid adjustment to “decrease 80%” to bring my mobile bids to that level.

I would recommend doing this calculation on a campaign-by-campaign basis, since there may be significant variation in mobile conversion rates for different types of products.

If you are using a predictive analytics product, such as Levers, you may be able to forecast trends in your mobile conversion rate. You would then base your mobile bid adjustments on the forecasted conversion rate values, instead of simply using historical data.


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