At long last, Google has finally given users access to hourly conversion data through the AdWords interface.  This is extremely valuable information, particularly to search marketers performing lead generation, as they typically have little to no conversion latency to deal with.  With this information, you can choose to bid more in high converting hours of the day, and bid less in lower converting hours of the day.  But first, let’s identify some key concepts and themes to grasp before you start monkeying with your strategy!

Conversion Latency
If you are going to daypart, it is important to understand “Conversion latency.”  This is the concept of how long it takes a user to go from their first click to conversion.  If you are selling fancy toilets for $2,500, chances are you are going to have a lot of conversion latency while the person makes up their mind.  It might take one day, a week, or more for the person to convert, and they might click your ads multiple times.  However, if you are dealing with lead gen, there is typically little conversion latency, and as much as 70 to 80 percent of your conversions could be happening right there on the spot.  So, before you daypart, identify how much conversion latency you have.

In order to identify your conversion latency, go to “Conversions” under AdWords’ “Reporting and Tools” menu and then click “Search Funnels.”  By the way, if you do not have Google’s Conversion Tracking set up, I suggest you do so post-haste.  Once you are in the Search Funnels menu, you can look at path length and time lag. See menus at left here:

If you are getting a large number of conversions occurring with just one click, I think it is safe to say you are okay to daypart.  However, if you are getting two, three, or four clicks to a conversion, and it is showing latency of two to three days, you might want to think twice before you daypart up or down.  This is because your “Assisting” clicks may be happening during hours of the day that don’t show any recorded conversions, however, these clicks are critical to your closing the sale.  Thus, you do not want to bid lower during these time periods simple because you could potentially be cannibalizing all of your efforts.

Identifying Your Dayparts
Once you have identified that you want to daypart, then what do you do?  Return to your Campaigns tab in Adwords, and select the campaign you want to daypart.  If you want to daypart everything together, do not select a campaign — depending on your account structure, this may or may not be advisable.  Next, click the Dimensions tab.  If this is not selected, you will have to select it from the little arrow dropdown next to Campaigns, Ad Groups, Keywords, etc.  Here it is:

Once you are on the Dimensions tab, select Hour of Day, and then choose your date range.  I suggest at least three months of data to get a good sampling, but if you are working with a large spending account, less time might be acceptable.  Once you have your report, toss it into Excel, and identify groups of hours that are working well and not working well.  Here is the key: You can only identify six dayparts.  Thus, try to find six groups of hours that go together (sequentially) so that you can decide to bid them up, down, or leave them alone.  Also, you may want to consider bidding differently for different days of the week (particularly the weekend).  This might require some work to get the data you want in a useable form.

Setting Up Your Dayparts
Now that you have identified your six (or fewer) dayparts, you need to implement them on your campaign(s).  You will have to go to the settings tab for this, and then click on the ad schedule for your desired campaign.  Then you will have to change the Mode from Basic to Bid Adjustment.  Now you will have the option to set your Ad Scheduling.  Start with Monday, add your time periods (up to six), and select what you want your bid to be.  To leave it alone, set it at 100%, and to bid up put 110%, or down 90% — or more or less depending on how much you want the bid to change.  The main thing to keep in mind when setting up dayparting is to keep your changes minimal for a start.  For example, if you set your bid to 25% of its original bid, it’s likely the keyword will not show at all for that given time period, in which case you might as well shut it off (which is also an option within dayparting).  Keep to small changes at first, but not so small they won’t make a difference. In this example, the ads are shut off two hours of the day, but are running at various percentages of bid for the rest of the day.

Final Notes
A couple of final tidbits to go over.  One should know that dayparting doesn’t work with Google’s Conversion Optimizer.  So if you’re using this feature, you are out of luck.  Secondly, if you want to daypart in Microsoft adCenter, you have to select one of their six mediocre dayparts.  Sometimes these may align with your data, other times they may not.  Furthermore, adCenter does not make conversion data by hour available through their User Interface.  Thus, you will have to join your backend conversion data to your hourly spend from adCenter, and this does not properly mitigate for conversion latency.  Or, you can try to get fancy with your Google Analytics, but this will not have the spend data from adCenter incorporated.  In any event, this tutorial is best applied to Google because adCenter’s dayparting options are, as mentioned, weak at best.

In my own campaigns, I’ve seen dayparting boost ROI by 10 to 20% or more depending on the vertical.  So, if you aren’t using Conversion Optimizer, I highly suggest seeing what sort of efficiencies can be gained through dayparting!