Herausforderung von Gebotsanpasungen am Beispiel des Device Modifiers in Google AdWords

1. Hamburg, den 14.11.2014
Peak Ace // SEA Stammtisch
HERAUSFORDERUNG VON GEBOTSANPASSUNGEN
AM BEISPIEL DES DEVICE MODIFIERS
Christian Borck // Co-Founder
Berlin, 23/03/2017

2. Bid Management
for Google
Search & Shopping
About Adference

3. Easy-to-Use Tool vs.
massive statistical computations

4. Hamburg, den 14.11.2014
Why should I care about devices?

5. 2009-2016: The Rise of Mobile

6. 2017: Domination of Mobile

7. Devices Perform Differently

8. How to Ensure Desired Goal Performance
Despite Different Device Statistics?
All devices relatively similar CPA
Consequence of the Device Modifier

9. Hamburg, den 14.11.2014
DEVICE MODIFIER: UNDER THE HOOD

10. • Segment data by device
How to start?

11. • Segment data by device
CPA = cost / conversion = CPC x clicks / (CVR x clicks)
= CPC / CVR
How to start?

12. • Segment data by device
• CPA = CPC / CVR
• KUR = CPC / CVR / Value
How to start?

13. Estimation of the Conversion Value Value
● Most important: Keyword-specific observed
conversion value (and product price)
(weight most recent data more strongly)
● enrich information from campaign hierarchy
● sparse data: skewness & outliers
Product /
Keyword
Product Category 5
Product Category 1
...
AdGroup
Campaign
Lessrelevance
values = [50, 50, 50, 100, 100, 150, 500]
mode = 50
median = 100
mean = 142,86

14. Estimation of the Conversion Rate CVR
1) Most important: Keyword-specific observed
conversion rate
(weight most recent data more strongly)
2) If not enough individual data available,
enrich information
Weighted monthly
individual data
Yearly individual data
Hierarchical data
(assume that keywords in
same adGroup behave
similar)
OnSite data
+
+
PRIOR INFORMATION
Estimated
Conversion Rate
+ LIKELIHOOD POSTERIOR

15. Estimation of the Price per Click CPC
With Google’s auction model, we usually pay less than we actually bid
CPC = Bid / Uplift
Calculate the Uplift as the gap between most recent bid and observed click price:
e.g. Uplift = Bid / AvgCpc

16. • Segment data by device
• CPA = CPC / CVR
• KUR = CPC / CVR / Value
How to start?

17. Optimality Vs Reality
AdGroup AdGroup
Keyword KeywordKeyword Keyword
Campaign
Lowest level for
Device Modifier
Lowest level
for individual bids
Desired: If devices perform differently, estimate all factors and place bids for every device individually.
What Google allows: Place bids on keyword level, but leverage only individual AdGroups by Device Modifier
=> Estimate Factors on AdGroup level

18. Hamburg, den 14.11.2014
From Estimates to Modifiers

19. Without Segmentation
MOBILE
1. Conversion Rate
Campaign Goal
KUR 10%
2. Conversion Value
3. Traffic proportion
Mixture Bid
0,37€
DESKTOP/TABLET
Desktop/Tablet Bid
0,50€
Mobile Bid
0,24€
4. Optimal bids
5. Mixture Bid without Mobile Modifier
5%
100€
50%
3%
80€
50%

20. Modify Mobile Only
MOBILE
1. Conversion Rate
Campaign Goal
KUR 10%
2. Conversion Value
3. Traffic Proportion
Mixture Bid
0,37€
DESKTOP/TABLET
Desktop/Tablet Bid
0,50€
Mobile Bid
0,24€
Mobile Modifier
-52%
4. Individual Bid Adjustment
with Mobile Modifier:
Adference segments by device
Desktop/Tablet
Bid
0,50€
5%
100€
50%
3%
80€
50%

21. Google Extends to Tablet Device Modifier
MOBILE
Campaign Goal
KUR 10%
DESKTOP
Desktop Bid
0,50€
Mobile Bid
0,24€
Mobile Modifier
-52%
4. Individual Bid Adjustment
with Mobile and Tablet
Modifier: Adference
segments by device
Desktop Bid
0,50€
TABLET
Tablet Bid
0,28€
Tablet
Modifier
-44%
5% 3%1. Conversion Rate 4%
80€100€2. Conversion Value 70€
50%3. Traffic Proportion 30% 20%

22. MOBILE
Campaign Goal
KUR 10%
DESKTOP
Desktop Bid
0,50€
Mobile Bid
0,24€
Mobile
Modifier
-52%
4. Individual Bid
Adjustment with
Mobile and Tablet
Modifier: Adference
segments by device
Desktop Bid
0,50€
TABLET
Tablet Bid
0,28€
Tablet
Modifier
+16%
5% 3%1. Conversion Rate 4%
80€100€2. Conversion Value 70€
20%3. Traffic Proportion 60% 20%
Mobile more important than
Desktop
=> Do not optimize individual
bids on Desktop base
First Approach: Definition of Main Device
main device

23. MOBILE
Campaign Goal
KUR 10%
DESKTOP
Desktop Bid
0,50€
Mobile Bid
0,24€
Mobile Bid
0,24€
Desktop
Modifier
+110%
TABLET
Tablet Bid
0,28€
Tablet
Modifier
+16%
5% 3%1. Conversion Rate 4%
80€100€2. Conversion Value 70€
20%3. Traffic Proportion 60% 20%
First Approach: Definition of Main Device
Mobile more important than
Desktop
=> Do not optimize individual
bids on Desktop base but on
Mobile base
Definition of Main Device
4. Individual Bid
Adjustment with
Desktop and Tablet
Modifier: Adference
segments by device
main device

24. MOBILE
Campaign Goal
KUR 10%
DESKTOP
Desktop Bid
0,50€
Mobile Bid
0,24€
Mobile Bid
0,24€
Desktop
Modifier
+110%
TABLET
Tablet Bid
0,28€
Tablet
Modifier
+16%
5% 3%1. Conversion Rate 4%
80€100€2. Conversion Value 70€
20%3. Traffic Proportion 60% 20%
First Approach: Definition of Main Device
Main device defined only on
campaign based traffic
BUT: Individual AdGroups show
different behaviour
Extreme Case: Customer completely
blocks main device for individual
AdGroups - not possible to calculate
optimal individual bids!
Another drawback:
Modifiers do not cluster around
+-0%
-> Hard to keep allowed range of
-90% to 900%
4. Individual Bid
Adjustment with
Desktop and Tablet
Modifier: Adference
segments by device

25. Solution: Individual bids on Aggregate
MOBILE
Campaign Goal
KUR 10%
DESKTOP
Desktop Bid
0,50€
Mobile Bid
0,24€
Mobile
Modifier
-20%
Desktop
Modifier
+67%
TABLET
Tablet Bid
0,28€
Tablet
Modifier
-7%
5% 3%1. Conversion Rate 4%
80€100€2. Conversion Value 70€
20%3. Traffic Proportion 60% 20%
Aggregate
Mixture Bid
0,30€
4. Aggregate all devices
to calculate an optimal
Mixture Bid
5. Individual Bid
Adjustment for each
Device relative to
Aggregate
Possible Solution:
Aggregate all devices
and calculate an optimal
bid for the Aggregate.
Adjust individual device
bids by device modifiers
relative to Aggregate

26. Device Modifier Ensures Similar Goal
Performance
All devices relatively similar CPA
Consequence of the Device Modifier

27. Summary: Device Modifiers At Adference
- Calculate Device
Modifiers based on
three Factors
CPC / CVR / Value
- Aggregate all Devices
for setting individual
Bids
Adjust all three devices
by modifiers on
AdGroup level
- Complex calculation of
individual factors

28. Adference GmbH
Munstermannskamp 1
21335 Lüneburg
+49 4131 7898 318
info@adference.com
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Performance Bid Management
Google Search & Shopping