August 20, 2019
Leveraging CRM Data to Dictate SEM Investment
As Facebook Ads’ hyper-granular targeting options continue to drive big results for advertisers, Google has been working to improve their own targeting options on the AdWords platform. Google took a big leap in late 2016 with the official release of demographic targeting for search campaigns.
You can now add bid modifiers for Gender and Age categories within AdWords (income targeting has been available for some time). Google determines this information primarily based on browsing behavior or demographic data from signed-in Google users.
Advertisers selling products popular with specific demographics will find these most useful for reaching likely converters and excluding less qualified searchers (or bidding lower if the data justifies it). If you don’t know who your primary customers are, then you can also use demographic groups to better understand your purchasing audience.
You can now target or exclude your search ads to specific ten-year age ranges. The example below is for a software product that is primarily targeted to parents of children and teenagers, as well coaches, teachers, and others who work with children.
Unsurprisingly, the 35-44 age group (the age range when parents are most likely to have older children) drives the largest spend and also has the strongest conversion rate. Also unsurprisingly, the 18-24 year age group is a poor performer. Since most 18-24 year olds don’t have children, especially older children, they are the least likely to need our product.
Using this data, we would decrease our bids significantly for the 18-24 and 55-64 age groups, and increase our bids for searchers between 25-54, thereby allowing us to better target the users that are most likely to need our product.
You could also use this data make changes to other marketing efforts. For example, when launching display or YouTube campaigns, expanding to Facebook, or considering investing in TV or a direct mail campaign, you should target users in the 35-44 age range.
Much as you can now adjust targeting for certain age ranges, you can also set bid adjustments for male and female gender groups. The following example is from an advertiser selling industrial supplies.
In this case, we see two conflicting data points. Women actually have a significantly higher conversion rate than men, but men drive nearly three times more conversions than women. In this case, we would not bid down men, as that might lead to lost conversions, but we would increase our bid adjustment for women to improve our average position and take advantage of stronger conversion rates among female searchers. By doing so, we can ramp conversions from women without losing conversions from men.
While demographic targeting is a powerful new tool in the PPC toolbox, it also comes with some limitations, the largest of which is the number of “Undetermined” members of each demographic group. In many cases, 40-60% of searchers fit into the “Undetermined” category, meaning that your demographic bid adjustments only affect a small portion of overall traffic.
You should also keep in mind that Google’s demographic groups are inexact. Because the groups are often based on browsing clues instead of hard data, Google can be wrong about an individual’s actual demographic identity. In fact, according to Google’s ad settings, my 25-year old female coworker who manages PPC accounts for several software companies is categorized as a man between 45-54 years old. So be careful to track the performance impacts of your demographic bid adjustments.
The good news is that the accuracy of this data should improve as Google refines its algorithms. And in the meantime, demographic targeting is a powerful tool to efficiently reach the most qualified audience with your search ads and drive stronger performance.