The world of paid search is shifting. Advertisers are slowly moving away from targeting search queries to targeting audiences.
It’s not about just showing the right ad anymore. You need to show the right ad to the right user.
In order to take full advantage of this shift, you need to know
- Where is the user in the conversion funnel?
- What audience tool targets the right kind of user?
This article will walk you through the different audience tools available and how you can use them to reach the right customer at the right time.
Different audience tools
Audience segmentation tools are a way to apply a bid modifier (positive or negative) to a segment of people you believe are more/less likely to convert.
RLSA (Remarketing Lists for Search/Shopping Ads)
RLSAs are a rule based collection of past visitors to your website. They may have visited multiple pages, abandoned a cart or purchased something in the past. What everyone in your RLSA list must have in common is that they have interacted with your site in some way.
- Implement the remarketing tag on your website
- Create lists (below criteria are for Search Ads only, so there are different criteria for Display Ads)
- Lists for Search Campaigns need to include at least 1000 cookies (last 30 days)
- Max. membership duration is 540 days
Recommendation: Boost your conversion rate by retargeting users that previously engaged with your website.
RLSAs are great, but they are only useful if someone has already visited your website. To help you reach customers who may have never heard of you, Google created Similar Audiences. These are lists of potential customers who share similar interests and characteristics to the customers in your existing RLSA audience. To create these audiences, Google uses its display network data.
These lists may sound like the holy grail, but they’re not there just yet. The lists are massive and often times unprofitable, so approach them with care.
- Similar audiences get automatically populated
- Minimum requirement is an audience with at least 500 cookies (last 30 days)
- Users in the RLSA audience the similar audience is based on are automatically excluded
Recommendation: Use similar audiences to reach new customers that potentially have an interest in your website
These “intelligent” lists are made up of audiences based on your analytics conversion data. Google uses a multitude of conversion signals to determine whether a user might convert in a next session, including:
- Time of days
- On-site metrics
Google usually updates the list every day as long as there are enough data points available. If the list does not get updated within 90 days, Google takes data points from similar websites into consideration.
- Use of the analytics tag is mandatory
- The website needs at least 500 e-commerce transactions a month and 10.000 visits per day
- Otherwise, data from similar websites will be considered
Recommendation: Use smart lists to maximize your conversions
Google customer match
If you already have someone’s email address – either because they’ve made a purchase or signed up to receive updates from you – they’re likely pretty interested in buying you’re selling. In addition to target email marketing, you can also use these email addresses to create an exact remarketing list in AdWords. Another good thing about these lists is that, unlike the others, they don’t expire.
You should be aware, however, that letting Google match customer data is a legal “gray zone” in some markets. In addition, the match rate varies significantly from market to market.
- Select the customers you would like to retarget (and create a single list of these in excel)
- Upload the email addresses to Google (also possible via API)
- Google then matches the data within 24 hours with its own data and creates a GCM list
- Lists can be shared across accounts
Recommendation: Use customer match to create a segment of your customer base that is high-value or high-engaging.
Using AdWords vs the Analytics tag
With the exception of customer match, each of these audience targeting methods requires you to have a tracking tag implemented on your website. This is obviously so Google knows who it is that performed the actions you want to retarget.
Currently, Google offers two remarketing tags: AdWords and Analytics
Both of these tags come with limits. First of all, Google doesn’t provide you with any demographic data (age, gender, etc). Lists in your analytics account require a minimum of 1,000 members before they are available to retarget and you can only have 2,000 lists running at the same time.
Once you’ve selected the lists you want to target there are two different ways in which to modify the bids for that list.
Bid only allows you to add a positive (max +900%) or negative (min -90%) bid modifier to your campaigns on top of your CPCs. Which means your ads will be shown to all users, but with a higher or lower CPC for your targeted audiences. If a user is part of more than one list, the highest bid modifier will be applied, so you want to set up a hierarchy based on list type and duration as well as performance. In the majority of cases, this is the method you’ll use to improve your campaign’s performance.
Target and bid, on the other hand, allows you to only target users that belong to the respective audiences. These ads will be only shown to users in your targeted audiences, for which you set a specific bid. The “target and bid” method is useful for restricting traffic to vague terms, or when your messaging has to be specific for certain audiences.
Since the bid only method, in which you set bid modifiers for certain audiences, is the most common it’s important that you understand how they work. In AdWords, you have the option to set bid modifiers at either the ad group or the campaign level.
If in your campaign one ad group has RLSA bid modifiers, all other ad groups have to have ad group level bid modifiers as well. And, in contrast to device bid modifiers, you can’t set bid modifiers on both levels at the same time.
Using RLSAs for Headterm campaigns
Headterms are short, common queries that receive a lot of traffic – like “Nike” or “shoes”. Bidding on these high traffic terms can get pricey if you do it across your entire AdWords account. But, you can restrict bidding on these terms to your high-converting audiences using RLSAs.
This way you can aim for a higher position while at the same time keeping costs and performance under control. This strategy works best when you still want to show your ads for highly competitive keywords.
Basic RLSA set-up
The first step in RLSA set-up is to define your audience segments. In general, there are three types of audiences.
Start your lists with a membership duration of 30 days and add these audiences on the campaign level with a bid modifier of 0%. In this stage, you are simply gathering data on how each of these audiences performs.
You’ll need to wait until you see how the performance of your audiences on account level compares to your account average. How long you have to wait depends on the size of your account and how much data you collect every day.
Once you’ve gathered the first round of performance data, set your initial bid modifiers according to each list’s performance.
Get more granular with your audiences
Once you’ve rolled out your basic audiences and collected some performance data you can start to get more granular with your targeting.
If you have enough traffic for various audiences on the campaign level, the first step is to move on to the ad group level. If there is still plenty of data, consider adding smaller time cohorts.
If you don’t have enough traffic, keep your lists at the campaign level. Instead, consider adding longer time cohorts to collect more data.
Use your common sense here as well. A visitor from 540 days ago might remember your site, but a cart abandoner from 540 days has long forgotten the item they had in their basket!
Bidding rules of thumb
As you’re playing around with more granular list structures, bear in mind that your list size will decrease dramatically the shorter you make your membership duration. In general, the smaller the list and the closer to the bottom of the conversion funnel, the more aggressive you should bid.
So a bid modifier of 240% for “cart abandoners < 3 days” is not an unusual bid because in this case you are unlikely to pay the full extra 240%, unless the term is particularly competitive. Essentially, the size of this modifier is an attempt to guarantee first position. Once you reach first position it does not make sense to push any harder.
Managing multiple time cohorts and overlapping audiences
If you think about it, it’s quite possible that with all these different audience segments and time frames, the same person could end up in multiple lists. Here are two strategies to help you ensure someone doesn’t get allocated to multiple lists and mess up your bid modifier hierarchy.
Maintain bid modifier hierarchy
As long as you maintain a bidding hierarchy, in which the most specific list with the smallest membership duration always has the highest bid modifier, you ensure the right bid modifier gets applied to the right user. This does require you to regularly check your bid modifier hierarchy and make sure everything is in order. You want to ensure that your “cart abandoners < 30 days” can’t outbid your “cart abandoners < 3 days”.
Maintaining a bidding hierarchy is a good strategy if you manage multiple accounts with a high number of audiences or you regularly adjust your RLSA setup. It’s also good if you manage a low traffic account, so you only have a few ad groups where your regularly adjust your bid modifiers.
Exclude your audiences from each other
Instead of maintaining a bid modifier hierarchy, when you create a new audience you can adjust all other audience creation rules so that they get excluded from each other. For example, purchasers should be excluded from site visitors and 10 day time cohorts should be excluded from 30 day time cohorts.
This list exclusion method is good for high traffic accounts where you regularly do extensive RLSA bid adjustments, so you do not want to worry about the bid modifier hierarchy. It will also benefit anyone who wants to keep their RLSA audiences super clean for specific analyses.
The benefit of RLSAs for digital marketers
As marketers, audience tools make are there to make your lives a whole lot easier. Not only are they a powerful opportunity for segmenting, they also provide a rare optimization element whose borders you can define and refine to your heart’s content. You can add, exclude or create combinations of lists focused on specific behaviors and use them for our ads as long as the number of the users in the lists reach 1000 for 30 days.
Our tests suggest that bid modifiers on these audiences can increase revenue by 16% while keeping ROAS stable. In addition to the basic audience lists we’ve laid out above, you can also target audiences based on engagement metrics, retention lists, search exits, and event based lists.
Related: Go beyond standard RLSA lists
Even when done well, however, managing audience bid modifiers is a tedious task, especially when done at scale and beyond overall audience averages. Which is why we’ve created a way to optimize Audience bid modifiers in combination with our smart query segmentation and device bid modifiers.