How To Determine Your Hourly Bid Multipliers In AdWords

While hourly bid multipliers aren’t new, they remain a crucial tactic for optimizing your AdWords campaigns. They work by reducing your ad spend at poor-performing times of the week and increasing your exposure at the best times of the week. Here, I’m going to share the steps you can take (along with a helpful spreadsheet) to determine your hourly bid multipliers for better campaign optimization.

Step 1: Pulling An Hourly Performance Report From AdWords

On the Campaigns tab in AdWords, go to Columns>Customize Columns and ensure that you’ve selected the appropriate metrics. Performance metrics required for the spreadsheet to function properly are as follows: Campaign, Clicks, Impressions, Cost, Avg Pos, and Conv (1-per-click) — all other metrics selected in the screenshot below are optional:

Once your performance metrics have been selected, hit the “Download Report” button. When prompted, add the “Day of the week” and “Hour of day” segments:

This should provide you with all the data you need to analyze hourly performance at the campaign level.

Step 2: Determining Hourly Bid Multipliers

Similar to the template used to determine mobile and geo bid multipliers, I’ve created a basic spreadsheet to help analyze hourly performance and easily determine your hourly bid multipliers. You can download it here.
Copy and paste your AdWords report into this spreadsheet as directed. From here, you can take a closer look at the following:
a. Performance By Day Of Week

b. Performance By Hour

c. Performance By Hour & Day Of Week

If you have collected enough hourly data for each day of the week, you should absolutely make bid adjustments on an hourly basis. This process can be time consuming, as it requires making adjustments on a very granular level, but the results are well worth it.
For those times with less traffic, you can still leverage daily and/or hourly trends. For instance, looking at campaign #43 in the attached spreadsheet, it appears that there was not enough data collected on Sundays from 4:00 am to 5:00 am to make a specific bid multiplier suggestion — but you might still want to increase the bids, since the data indicate that both Sundays and the 4:00 am to 5:00 am window perform well in general.
The attached spreadsheet will only address those times of the week with sufficient hourly data, while keeping in mind that “bid adjustments for locations, days, times, and any ad group-level targeting methods can be set from -90% to +900%.” Thus, it can help you to determine relevant hourly bid multipliers between -90% and +900% when there are a statistically significant number of clicks:

Step 3: Implement Hourly Bid Multipliers In AdWords

At the campaign level, navigate to the “Settings” tab; then, go to the “Ad schedule” section. The first step is to specify when you want to make bid changes. Select a day of the week from the drop-down menu:

From there, you can you can adjust the effective hourly bid multipliers, as calculated by the spreadsheet:

Conclusion

All of this is fairly straight-forward; however, your hourly bid multipliers need to be maintained over time, hence the importance of a (semi-)automated process. Also, keep in mind that once set in AdWords, those hourly bid changes do not take into account multiple time zones. For instance, if your AdWords account is set to “(GMT-08:00) Pacific Time,” and you want to increase the bids by 20% at 1 pm, then these bid changes will occur at 1 pm PST across all PST/MST/CST/EST locations. As a result, it makes sense to break down your top campaigns by time zone in order to set more accurate hourly bids.

How To Manage PPC Closely To A Budget

A few weeks ago, at SMX West in San Jose, George Michie of RKG, was talking about the challenges of managing enterprise-level PPC campaigns, and he made the interesting observation that you can either manage to ROI or to budgets, but not both at the same time.
The context of George’s remarks was setting expectations with client C-Level executives and educating them about what is and what is not possible with online marketing campaigns.

Maximizing PPC ad spend and managing to best ROI are usually conflicting goals.

ROI Targeting Differs From Budget Targeting

The reason these two goals are generally incompatible is that ROI targeting takes the dynamics of the auction into account and lets the ROI dictate the amount of ad spend. Spend rises and falls based on your ability to deliver profitable results. When you are told you must spend to a specific budget, your budget actually influences the dynamics of the auction and your ability to optimize CPAs.
For example, if you are given an extra $100K and told to spend it this month, you only have a few options available to you in the short term. You can increase bids to get more traffic from higher positioning; but, you’ll pay more for that traffic. You can also allow more budget to flow to your marginal campaigns, which also degrades your ROI.
If on the other hand, your budget is constrained, then you are forced to make decisions like advertising only on your brand terms, slowing down the pace of your ad serving by using standard ad delivery, or simply letting your campaigns run out of money before the end of the month, allowing your competitors to reap the benefits of your dropping out of the auction.
I think that most SEM pros and corporate CEOs would agree that managing PPC campaigns to ROI targets with unconstrained budgets is the ideal budgeting scenario. Common sense seems to suggest that if your paid search campaigns are improving both revenues and profits, you would want to spend as much as you can to keep the good times rolling.
Unfortunately, the reality (and unreality) of corporate accounting and planning structures often dictates that short-term budget targets are cast-in-concrete and to be met at all costs, regardless of business results. In this environment, missing your budget either by under-spending or over-spending is an undesirable outcome, and draws unwanted (and often unwarranted) attention to your campaign management prowess.
So, unless you are one of the lucky PPC managers with unlimited budget as long as you hit ROI targets, or you have the bravado to ignore budgets to prove your management machismo, your best bet is to come in right on the mark.

Staying Within Range Of Your Target Budget

I generally worry about three things when it comes to managing monthly budget targets: (1) going over budget, (2) getting too far under budget and (3) Blowing through our budget before the end of the month. Of these worries, preventing over-spend is probably the easiest problem to avoid.
Preventing Over-Spend
If we are severely budget-limited, taking the campaigns offline when the budget is exhausted is the certainly the easiest option. I don’t prefer doing this because it seems so contrary to common business sense.
However, I have also found that nothing is more motivating to clients than the thought of their competitors gaining advantage by having the search results pages all to themselves! So, sometimes this option works well to free up more funding for paid search.
Going Over Budget
To prevent campaigns from going over budget, the first line of defense is to use the budget settings within Google AdWords and Microsoft Bing Ads.

Bing Ads: Bing Ads allows you to set monthly or daily budgets for your campaigns. If you choose to set monthly budgets, Bing Ads will show your ads whenever they qualify for an auction and then pause them when your monthly budget is exhausted. Alternatively, you can also use Bing Ad’s daily budgeting feature to spread your ad spend across the entire month.

For example, if your monthly budget is $3,000 for a month with 30 days, setting your daily budget to $100 will ensure that your ads show every day. With daily budgeting, you can also set the ad delivery to either standard or accelerated pacing. Standard delivery means Bing will pace the delivery of your ads so that they show throughout the day based on your budget. Accelerated delivery means your ads will show in all eligible auctions until your daily budget runs out.

Google Ad Words: In AdWords, you can’t set a monthly budget directly. Instead, Google calculates an effective monthly budget based on your daily budget setting. AdWords multiplies your daily budget by 30.4 (the average number of days in a month) and uses that value as your monthly maximum spend.

During the month, your AdWords spend may vary, exceeding the daily limit by as much as 20%; but at the end of the month, your budget will not exceed your target ad spend. So, for example, if your daily budget is $100 per day, then your total monthly maximum spend will not exceed $3040. You can also share a budget across some or all of your campaigns to ensure your whole account stays within limits.

Under Spending
Under spending budget is also one of my budgeting worries, and it is a tough one to manage if you get behind. Under spending can happen for a number of reasons: inattention to campaigns, ads that have been suddenly disapproved, another big competitor has entered your space and is eating into your search click volume, or your client suddenly decides they need to dump a lot more funding into your campaigns in the middle of the month.
In big corporations, this tends to happen at the end of fiscal quarters or the end of fiscal years. While no one ever likes to turn down additional budget, dealing with a huge budget bump can be very tricky in the short term.

Tracking Daily Spend

When hitting budget numbers becomes an overriding requirement, it is important to keep a very close eye where we are relative to the target monthly spend and make bid and budget adjustments daily. The challenge is knowing how big or small the adjustments should be, because every day of the week has its own traffic and ad spending profile that needs to be taken into account.
For this reason, we like to take day-of-week spending patterns into account when making adjustments.

PPC Ad Spend Weighted by Day of Week helps inform bid and budget decisions.

The above chart shows two curves. The orange curve shows the average daily spend we need to achieve in order to reach our month end target, somewhere around $325 per day. The second curve, the blue one, shows a spending plan weighted by day of week based on our typical intra-weekly spend patterns.
We developed the curve below simply by taking the daily profile of the last five or six weeks of ad performance, and weighting the ad spend based on how individual days of the week perform as percentage of the entire week’s ad spend. As you see, there is a big difference between Sunday and Monday average ad spending:

Each day of the week has its own ad spend profile.

Using a weighted average can make a big difference in the adjustments you make to your bid and budget allocations day-by-day compared with using a straight line average. For example, when your month begins on a Thursday, and you come in on Monday morning, you’ll see that your daily ad spend might look like this:

Daily PPC Spend plans – weighted versus straight line average.

If you are comparing your actual ad spend against the orange straight-line average target spend curve, you may be  inclined to make a much bigger set of adjustments than if you were comparing things to the weighted average. The weighted average curve looks very similar to your actual ad spend, so you would probably make smaller adjustments.
When we work from a weighted average in managing closely to monthly budgets, we find we are less likely to make yo-yo adjustments – too aggressive one day, and too aggressive in the opposite direction the next.
In general, it is always preferable to work to ROI targets and allow ad spend to drift up and down as market efficiencies dictate. However, if you are required to also keep close to your budget targets, it’s a good idea to keep track of where you are relative to your strict monthly budget goals on a daily basis.

“Facebook Home” Keeps Google, Search Is Harder To Reach

Pick your survey, and one of the top activities on a smartphone is to use Facebook. That’s what the new Facebook Home is all about, making it easier for Facebook users to get Facebook. But it also makes another top activity — search — harder to do.
On Android devices, search is almost always just one touch away. Most current devices have a Google Search bar at the top, while older devices have the old-style search button at the bottom.
Facebook Home turns search into at least a two-touch, or two-step, process. It doesn’t appear to be a purposeful move to somehow oust Google. In fact, Facebook CEO Mark Zuckerberg seemed full of praise for Google and wanting not to impact what people’s search experiences are. Rather, it almost feels like an oversight.
Consider the two screenshots below:

On the left is my Galaxy Nexus. You can see the Google search bar at the top. If you want to search, you just tap on that box — one step (if the phone is locked, then it’s two steps).
On the right is a phone with Facebook Home. There’s no search bar. If you want to search, and this is a Facebook Home Partner device (like the forthcoming HTC First) you have to tap your picture at the bottom (step 1), then drag up to open your app drawer (step 2) then tap on the search box that appears at the top of that (step 3).
Here’s another side-by-side, this time with the HTC First (on the left) next to my Galaxy Nexus, showing how you can eventually get to the search bar:

If you’re on a non-Facebook Home Partner device, one that has the latest version of Android and is deemed Home capable, the bar goes away entirely.
For example, here’s how things look on the Galaxy S3, after you’ve opened the app drawer:

That’s the full screen. The search bar is nowhere to be seen, no matter which app pane you switch to, either. I’ve had two people from Facebook confirm that if you add Facebook Home to a device not part of the partner program, the search bar goes away.
So how are these Facebook folks who’ve been using the Facebook Home already conduct searches? They open up Chrome, then search from within there.
That works, of course. Plenty of people search in a similar way on iOS devices, by going through Safari or an alternative browser like Chrome. But for those used to one-touch “app-less” search, Facebook Home makes that harder.
Is this on purpose? Like I said, I doubt it. It’s certainly not the impression I got when talking briefly to Zuckerberg about it. He made it pretty clear there was no intention of trying to change search around for people.
“We don’t want people to have to choose do I want to be in this Facebook mode or a different mode. We want it to be additive,” he said. “The swapping out of Google’s functionality isn’t really something we want to do here.”
What about the idea that people may want to do local searches, and while Facebook effectively has a local search engine, Facebook Home doesn’t seem to help with that? Zuckerberg simply said Facebook had “a lot of opportunity” to show such content in the new Cover Feed or within the Facebook app itself.
But on the web, Facebook Graph Search is in part designed to better provide access to local information. Will Facebook Graph Search come to the app?
“When that’s available, hopefully we’ll be able to make that available here [in Home]. But even Graph Search, Graph Search is not web search. People still need Google or Bing of whatever they use for web search.”
Is Zuckerberg perhaps being cagey, holding back on a secret-uber plan to eventually have Graph Search take over on these devices. Perhaps. And I do think Graph Search is going to come. But really, the impression I got was that search has largely been overlooked with the launch of Home.
Consider that Facebook repeatedly talks about how it’s now a mobile-first company, and how more people are using it through mobile devices. Graph Search — and its partnership with Bing — are key features of the desktop experience. Neither of those are ready to follow Home over?
Down the line, of course, Facebook could potentially prompt people to change search providers — it could offer to be a search provider itself. But would that mean Bing would become part of that partnership on mobile, as it is on desktop? Or might Facebook worry that perhaps some might react badly to the idea of not having Google as their search engine?
We’ll see. But for now, it’s pretty clear that if you depend on some direct access to Google search, you’re going to do some additional steps in the future, if you go to Facebook Home.
As for Google Now, that seems to remain unchanged. A single hold on the main menu button with the HTC First will bring that up. The Vine video below shows this, after I first show the steps you go through to do a search:
On a non-partner device like the S3, a hold on the main menu button brings up access to Google Now via the G icon, at the bottom of the screen: