If digital marketing is a toolbox, AdWords is the adjustable wrench – capable of basic tasks as well as far more precise and targeted ones. And both AdWords and the adjustable wrench can be confusing and overwhelming at first glance.

Marketers aren’t missing out on the robust capabilities of this search marketing platform because they lack skills; many just don’t have the time to stop, do the extra research on advanced features, and implement slightly more intricate techniques into their workday.

One of the most overlooked features of Google AdWords – and one of the most useful – is the household income tier targeting option. Hidden inside a few drop-down menus, this campaign targeting technique isn’t challenging to test and integrate into existing campaigns and can yield insights that are far more useful than “people are clicking our ads.” Not to mention that it cuts advertising costs due to enhanced targeting. 

Where ‘Out With the Old, in With the New’ Gets Lost

Thanks to Google making AdWords accessible to marketers at every level, it’s not too scary to jump in and set up campaigns. But as the complexity of a campaign and the number of campaigns managed increases, most digital marketers simply won’t have the time to investigate the platform to find hidden gems. Google has a track record of releasing new features or changing its location without giving any notice. Remember when Google Buzz appeared in your Gmail? 

The most common reason marketers overlook advanced features on AdWords is inherited accounts. Whether they are fearful of fixing what isn’t broken or are just sticking with the status quo, many agencies and in-house marketers don’t feel the need to adjust accounts that are already delivering an acceptable cost per acquisition.

Staying up to date with AdWords’ new features and updates can be exhausting and, frankly, nearly impossible – unless you consistently follow Google’s updates and blogs by AdWords experts.

With the abundance of new features released on the search marketing platform, staying up-to-date on new features and how to use them just isn’t feasible. The basics get the job done, so why invest time in discovering and testing new techniques?

This commitment to basics can keep marketers stuck on the targets that work, regardless of the industry vertical or the campaign optimization options out there. Why differentiate a campaign’s consumers when you can simply use broad targeting options to expose your brand to them all? It’s not hard to understand why the proverbial adjustable wrench isn’t always used to its fullest capacity.

AdWords: So Many Options, So Little Time

For many marketers, focusing on the health of the account comes first. Testing new features, while useful in the long run, can reflect poorly on a team in the short term because testing tends to make an account run inefficiently while it learns. Overwhelmed by the sheer mass of options, many marketers stick to what they know to avoid trekking through unknown territory and risking their livelihood. 

With more than 200 product updates launching a year, marketers are understandably hesitant to invest the time and money into investigating and testing their application value – especially those working with a limited budget.

The Case for Testing Household Income Tiers in AdWords

Search marketers may have felt limited by AdWords’ targeting capabilities compared to other channels like display networks or social platforms. But with household income tiers, they have the ability to create better customer segmentation and home in on their true audience. 

Previously, workarounds involved using geotargeting in AdWords and overlapping U.S. Census data on a case-by-case basis. Basically, it was like using your hand instead of a wrench to tighten a leaky pipe. But Google has done the work for you, saving you time, energy and hand cramps. 

Hitting Your Target With Minimal Hair Loss

With household income tiers, marketers can create more precise and effective campaigns without exerting significant amounts of time or money. 

Not sold yet? I’ll break it down into five easy steps to prove that it’s not as complicated as you may fear.

  • Step 1: Go to your AdWords dashboard, choose a campaign, and click Settings>All Settings.
  • Step 2: In the Locations section, click Edit>Advanced Search.


  • Step 3: Select Location Groups. Then, select Demographics from the Choose Location Group Type drop-down menu.
  • Step 4: Select your geographic location, and expand the Select Household Income Tier drop-down menu. From there, you can focus your targeting by applying negative or positive increments to the average household income data. There will be six options with 10 percent increments; the exception is the lower 50 percent, which is bucketed into one tier.
  • Step 5: Click the Add button.

After you’ve added household income tier targeting to your campaign, you can revisit the targeting options by navigating back to Settings>All Settings

I recommend testing by running this feature without any increments and then applying a multiplier based on the performance of the campaign. To do this, select your campaign and then click Set Bid Adjustment

Ready to Get to Work?

We can all agree that household income tier targeting is easy to set up. Knowing exactly how to integrate the feature into your marketing strategy? Now, that’s a little more complicated. Here are three suggestions for where to start: 

  • Strategy 1: Start on an even playing field.

    As with any kind of testing, you should start out with a fraction of your traffic to test the waters while limiting the risks. But it’s vital to establish a baseline for comparison. Start all household income tier targeting at the same spot – with bid multipliers at 0 percent. Once data starts coming in through clicks and conversions, you’ll have a better idea of how to optimize this targeting feature for each tier.

    I recommend increasing an individual tier weekly and monitoring results. After a few weeks, set that tier back to 0 percent and test another tier. When all applicable tiers have been exhausted, compare results and weed out the true underperformers. Then, you can retest the tiers using a slightly higher bid multiplier and repeat the process.

    Let’s say you’re running paid search for a credit card company with a key performance indicator of approved credit card applications. Testing out campaigns segmented by household income tier would be easy and insightful. Simply select a location, choose a household income tier to test, and determine whether the cost per approved application is significantly lower than your account average.

    Once you identify which tiers are excelling or failing dismally, apply multipliers on those tiers or stop targeting them altogether. A multiplier will tell Google to increase or decrease your regular bid based on the tier’s performance. Worst-case scenario, you discover that all tiers are performing similarly. Minimal time lost; useful information acquired. On to the next test.

  • Strategy 2: Bring in the customer experts.

    Your CRM data will help you understand your customers better than Google ever can, so leverage that information. Talk to your customer insights team, CRM team, or business strategy team. If you don’t have any of those, dig up anything you can about who your customers are by conducting surveys, looking at zip codes and analyzing the products they purchase.

    Once you have a better idea of who your customers are and what their household incomes typically are, you can apply this to your testing strategy to reduce the time it takes for the program to get up to speed. When incorporated into the first strategy, this technique could reveal the lowest-hanging fruit.

  • Strategy 3: Fine-tune according to the problems at hand.

    Testing by income tiers may sound easy enough, but it’s mostly overlooked by marketers. I suggest running different targeting tests by campaign rather than applying to your entire account. Your customers most likely fall in multiple buckets anyway.

    For instance, maybe one set of your customers is more affluent and more likely to book luxury lodging, while a different set of your customers is more budget-conscious and doesn’t typically book five-star hotels. In this case, structure your campaigns by hotel property rating and apply different multipliers to different household income tiers. This campaign setup will speed up your testing and keep things neat and tidy.

Your basic marketing toolbox is useful but truly can’t compare to the features AdWords has to offer. Don’t let the sophisticated options deter you from creating high-performing search ads. Targeting options and techniques can be learned over time without much risk, so stay tuned for more in-depth AdWords advice.

Have you considered household income tiers as part of your AdWords strategy? Let's talk about it in the comments.

Read AdWords Features Part Two

AdWords Auction Insights

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Randy AntinRandy Antin is VP of marketing for Jumpshot, a marketing analytics solution that provides behavioral trend insights of its 100 million-user panel by analyzing their clickstream activity. He has previously held roles at numerous startups and more established companies, including The Gap Inc. and Travelocity. His digital marketing experience includes everything from search to affiliates to structured feeds to retargeting. He has been attracted to big data and behavioral trends ever since he came in seventh place in a fantasy baseball league 15 years ago. Connect with him on LinkedIn.
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