Calculating RLSA Adjustments – The Easy Formula Way

Is it just me experience or has anyone else noticed that every Adwords rep mentions RLSA adjustments whenever they provide their ‘recommendations’? RLSAs are amazing and I’ve had a lot of success with them. I’ve tried various strategies with them but in this blog I’ll be looking at a simple formula based approach you can use to get started once your lists have built up some data.

This method looks at applying bid adjustments to allow each audience list to hit a certain CPA target but there’s other things that you might want to do with your RLSA Audience than just ensuring they hit a CPA target.
Here’s the basic reasoning:

You first need to segment the data either at account, campaign or adgroup level depending on how granular you want to go with your analysis. If we take the data below, we have a base bid before any adjustments have been applied and due to each list having a different CVR, the CPA for each list comes out different.

Bid Clicks Cost Conversions CVR CPA
Account/campaign/adgroup Data £0.75 500 £375.00 7 1.40% £53.57
Audience 1 £0.75 500 £375.00 8 1.60% £46.88
Audience 2 £0.75 500 £375.00 10 2.00% £37.50
Audience 3 £0.75 500 £375.00 5 1.00% £75.00

 

If we can calculate the percentage difference (Audience List CVR / Account CVR) between the account CVR and the list CVR, we can apply that same percentage as a bid adjustment to our lists in order to the make the CPA for the lists come out the same as the account CPA. So in the below examples, we’re going to apply a 14% bid increase to Audience 1, a 42% bid increase to Audience 2 and a 29% bid reduction (100 – 71) to Audience 3.

Bid CVR Percentage Difference From Account CVR
Account/campaign/adgroup Data £0.75 1.40%
Audience 1 £0.86 1.60% 114.29%
Audience 2 £1.07 2.00% 142.86%
Audience 3 £0.54 1.00% 71.43%

 

If we apply the bid changes to the earlier data, we get the below. Note that applying bid changes will make changes to your impression share lost due to Rank and also average positions but the below data is an example to show what would happen to the CPA of each list when we take the CVR of the Audience list and apply the above calculated bid changes to each Audience list:

Bid Clicks Cost Conversions CVR Percentage Difference From Account CVR CPA
Account/campaign/adgroup Data £0.75 500 £375.00 7 1.40% £53.57
Audience 1 £0.86 500 £428.57 8 1.60% 114.29% £53.57
Audience 2 £1.07 500 £535.71 10 2.00% 142.86% £53.57
Audience 3 £0.54 500 £267.86 5 1.00% 71.43% £53.57

 

It’s always a good idea to keep checking back and evaluating the person of each Audience list even after you’ve applied bid adjustments but this is an easy way to start making bid changes to your Audience lists.

 

 

 

 

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: