Imagine a campaign where paid search marketing can leverage demographic targeting to reach the potential leads. It can be the Holy Grail of online marketing to reach the right person and search intent at the right time. That’s AdWords income targeting for you.
AdWords income targeting gives you an option to pinpoint demographic data for adjusting your bid levels based on income groups in a specific geographical area. And that’s not all. Google also has tiers with a percentage of income levels to make your job easier. It has seven categories to target and place your bids on, including:
- Top 10%
- Lower 50%
With the help of an AdWords management agency, you can make the most of this information and boost your online marketing campaign. Let’s see how:
Why Bother with Household Income Targeting?
Suppose you are selling a high-end appliance or expensive financial services for affluent residents in the Melbourne Downtown area. Here, you have to use location-based targeting, so your ads aren’t served to people in other areas. But, there are limitations to the outreach of this campaign.
That is where household income targeting chips in. It helps you to reach the top 10% of households in high-value campaigns. This way, the expensive keywords in the vertical with high commercial intent will get the most significant chunk of your overall spending. You can exclude low-income groups from the campaign and adjust your bids within the top searches.
Basis of Determining Household Income
Before joining the bandwagon, it is essential to understand how Google AdWords determines household income. No matter what, Google doesn’t have accurate individual data or access to people’s bank accounts. It uses the primary geographical data to generate estimates of income.
Setting Up Household Income Targeting in AdWords
A lot has been changed in Google AdWords lately. In the older user interface, income level targeting was allowed in the location settings for a campaign. But now, Google allows income targeting front and centre through the Household Income tab in the new UI.
The targets are automatically populated, and you have to click the edit button to select the right options. From here, you can enable, exclude, and adjust the bids, as well. It is easy as pie, and you can target your audience through income level without a glitch.
Where Does AdWords Income Targeting Apply?
Demographic targeting of audiences based on income can’t work for every campaign. But, it makes more sense for some specific AdWords marketing areas where you need special focus on your demographics.
For example, businesses in the home improvement industry can witness vast differences between the purchasing patterns of different income groups. Here, you can set a bid adjustment based on total revenue, average order value, cost per sale, and conversion rates of the targeted income level.
The top 10% of income level will spend 44% more per sale than the bottom 50% level.
Where Should You Focus on AdWords Income Targeting?
An AdWords management agency can help you to identify all the critical factors for income targeting. However, two main concerns can stall your efforts.
Firstly, you have to understand the difference between targeting and optimization. If the household income targeting moves from the old UI to the new one, AdWords uses a flexible method to target by default. In this setting, people identified by AdWords will fall into a specific income tier and get targeted. You can fix this issue by accessing the AdWords Editor and changing the Campaigns & Ad Group level for household income groups to ‘Observations’. There will be no accidental impressions anymore.
Secondly, bid modifier inflation can take your bids to artificially inflated levels. To tackle this issue, identify the significant segments and create a separate ad group for each of them.
For example, if you have statistical data proving that different devices have varied conversions with each device offering substantial traffic, you can create a separate campaign for each of them. Now you have three device beds that you can treat and use individually to eliminate the bid modifier inflation from your campaign. Just stay cautious and check the settings carefully before bidding.
How to Measure the Success of AdWords Income Targeting?
How do you know if the income targeting is going to work for you? The truth is that real results may vary from case to case. But, the strategy is worth trying and testing.
Your AdWords management agency will look into your Google Analytics account and find the in-market segments that convert the most. It’s essential to understand your ideal customer and see if their income dramatically affects their ability to buy your product. In addition to this, you can:
- Determine the average order value of your products to segment your audience.
- The latency period or frequency of purchase is another crucial metric to measure audience behaviour. You can check the conversion rates to determine this factor. Suppose the latency period for a luxury watch is 28-30 days, while it can usually be 10-20 days for office furniture.
- The results may differ due to the type of product as well. Income targeting works best for retail businesses like luxury watches, jewellery, furniture, and so on. At the same time, other verticals can benefit from this tool if they have a lower average order value or price point to attract audiences in the lower tiers of income.
When looking to implement income level targeting, you can filter your PPC campaigns more clearly. It helps to determine and bid at higher grades for users who are more likely to convert. Also, you can reduce the bids for audiences who aren’t the right fit for your account.
As a result, you can spread your budget over better performance and turn the options in your favour. The idea is to create a hyper-granular AdWords campaign that saves you from capturing unqualified or less qualified traffic.