This article will teach you how to increase your Adwords ROI in 10 minutes using AdWords Ad scheduling. Ad scheduling or ad planning is the adjusting of your Adwords CPC bids based on day and time of day. For example: I can use AdWords Ad scheduling to increase my max. CPC by +40% on Wednesday between 1 PM and 4 PM. To effectively implement the strategy in this article you need to know how much you can spend per AdWords conversion and still make a profit.
Why should you use AdWords Ad scheduling?
How visitors interact with your website greatly depends on the day of the week and the time of that particular day. For example: Redtshirts.com sells Red T-shirts. They have this unique offer: order before 11 PM and your t-shirt will be delivered the next day. Visitors of Redtshirts.com during worktime are much less likely to actually buy a t-shirt. They are, ofcourse, supposed to be working instead of shopping. However during the evenings the conversion rate on Redtshirts.com is through the roof. Everybody needs a red t-shirt.
A high conversion rate makes for great return on investment on your AdWords campaigns. You’ll need less clicks to make a sale. Redthirts.com knows their conversion rates are highest after 5 PM but before 11 PM (because of their next day delivery). They could, and should, use Ad Scheduling to bid more in this timeframe and optimize their ROI. This is called winning.
How to detemine the best timeframe for Google AdWords?
Google Analytics has a build in report telling us the conversion rate of our website by the hour of the day. This reports helps us determine the best timeframe in which to maximise our AdWords spendings. You can find the report in the new Google Analytics interface under ‘Advertising > Adwords > Day Parts’.
You’ll notice there are a few timesframes in which your conversion rates either peak or drop. Note the timeframes and determine the cost per conversion for each of them. The best way to calculate the cost per conversion would be using this formula:
Cost per conversion = (100 / conversion rate) * average CPC
If the cost per conversion is too high the timeframe will get a negative bid adjustment. If the cost per conversion is low the timeframe will get a positive bid adjustment. We want more cheap conversions and less expensive ones.
AdWords Ad Scheduling Bid Adjustment
We now know when we should adjust our max CPC. During some timeframes we should increase our CPC bid to generate more sales against attractive cost, during other timeframes we should lessen our max. CPC because we are already paying too much per conversion. But how much should we in-/decrease our CPC bid? Calculate the bid adjustment using the following formula:
Murphsy’s bid adjustment formula™: 100% – ( (current CPA / optimal CPA) * 100)
For example: my CPA between 2 PM and 5 PM is $ 32, my optimal CPA is $ 25. The formula would look like this: 100 – ( ( $ 32 / $ 25 ) * 100 ) = -28%. So between 2 PM and 5 PM I should lower my AdWords CPC by 28%. This is a negative timeframe.
Make an annotation in Google Analytics explaining the currect timeframes and corresponding bid adjustments. Timeframes may change over time. Actually, our adjusted bidding might change conversion rates as well. Taking higher positions could have a slight negative impact on conversion. We should optimize our Ad Scheduling in a few months.
Step by step Google AdWords Ad Scheduling implementation
- step 1: Determine timeframes – high and low conversion rates
- step 2: Calculate cost cost per conversion per timeframe
- step 3: Determine bid adjustment (increase/decrease bids) per timeframe
- step 4: Activate Google Adwords ad scheduling
- step 5: Profit from better ROI!
Step 6 would be to evaluate after a month or two and make further adjustments by starting at step 1 again, This is unfortunately not possible in the promised 10 minutes.