From the casual to advanced AdWords specialist, it can be overwhelming to keep track of all of the features available to optimize your campaign performance in AdWords. Google tends to promote certain features more than others which also tends to guide what is popular within the industry. The less promoted features can often be difficult to locate within Google AdWords.

Furthermore, some features aren't going to be as popular because they simply won't be beneficial to all accounts. One feature that tends to fall under the radar which I have found to be very helpful in improving CPA for certain types of businesses is the targeting by household income modifier.

What is the bid by household income modifier?

Very simply put, a bid can be increased or decreased when geared towards a segment of the population. For example, bids can be raised by 30% when a user in the top 10% of household income is served the ad.

Household income data is based on the user's home location and the average household income within that zip code. The information is taken from public record.

While this sounds great, is it really valuable to my advertising efforts?

The answer is that it very much depends on the product or service you are trying to sell and the area you are trying to cover. From my experiences, if you target nationally and have a product that's competitive advantage falls outside of pricing, you are a prime candidate to take advantage of this feature. For example, high end musical instruments, sports equipment, or clothing would be prime examples. Again, this feature isn't for everyone.

Testing the true impact the modifier can have can be difficult because you want to allow a fair amount of time to have an appropriate sample size. However, longer waits can prevent you from making other optimizations which can potentially be beneficial and contributing to performance increases. That being said, I have estimated that utilizing this tool has improved performance in certain cases by 3-5%, which is significant.

One point to note is that I have yet to confirm with Google as to whether or not multiple modifiers will supersede each other or all be utilized. For example, if a 10% bid multiplier is placed on users in Illinois, a 15% bid modifier on mobile devices is added, and a 20% bid multiplier on household incomes is added, will a user with all three modifiers experience a 45% bid increase (10%+15%+20%)? Or will certain modifiers supersede others?

My advice would be to evaluate if your product would logically benefit from a bid by household income modifier and, if so, test the feature as the sole modifier at first.

How to Add It To Your Campaign

For those interested in setting up bid modifiers by household income I have provided screenshots below.

1. In your campaign within AdWords, click “Settings” and then the “Locations” tab:

2. Then click “Advanced Settings” under the Edit locations window:

3. Click “Location groups” at the top:

4. On the drop down menu “Choose location group type,” select “Locations by demographics”:

5. Input a location and then select the income tier on the “Select household income tier” drop down menu:

6. Finally, select your bid modifier for this demographic: