May 14, 2019
The Ultimate Guide to Google Ads Smart Bidding
As advertisers and SEM specialists, we are constantly looking to reach as many potential converters as possible, while simultaneously minimizing our exposure to unqualified searches. AdWords advanced geographic targeting options have helped us drive increased sales for luxury brands by focusing on searchers in top income tiers.
As Metric Theory’s Resident Geographer, I can tell you that implementing geographic targeting without layering on demographic targeting is like navigating with a non-topographical map. Sure, you’re going the right direction, but you’re not seeing all the contours that can make the trip quick and easy, or slow and miserable. AdWords allows advertisers to target regions based on demographic characteristics, like average household income, to more effectively reach a qualified audience.
AdWords’ income targeting is most useful when selling luxury products, as it allows you to target consumers with large amounts of disposable income. One of the greatest challenges when advertising for luxury products (e.g. jewelry, expensive cosmetics, or high-end clothing), is distinguishing between a searcher looking for a $25 ‘pink cardigan’ vs. a searcher looking to spend $250 or more. However, we know that ads shown in regions with above-average household incomes are more likely to be seen by searchers who are able to pay a premium for luxury goods.
We saw encouraging results when we experimented with income targeting for a high-end brand (see table). Consumers in higher income tiers exhibited much stronger click-through-rates (CTR), suggesting that our impressions are more relevant to those with greater disposable income.
Revenue and sales numbers confirmed that higher-income geographies held more qualified customers for our brand. The top 10% income areas produced nearly twice as many sales as any other income bracket. Based on this data, we would increase demographic bid modifiers for top-income searchers to shift budget to the income brackets that exhibit stronger performance.
Demographic targeting with average household income can be an incredibly useful and sophisticated tool for improving the relevancy of your paid search efforts. Try it out, because you never know what geographic gems you may find!