Are Automated Bidding Strategies Worth Using?
Automated bidding strategies have been around for a while within the Google Ads platform, enabling advertisers to offload their bid management to Google’s automated system.
The use of these strategies, are however, still a contentious issue within the pay-per-click marketing community.
Do campaigns generally get better results with manual bids? Or do the machines outperform their human counterparts in this department? Or is it a mixture of both?
The answer can vary between account managers, and depend heavily on the type of campaign and objectives.
There are a range of different automated bidding strategies on offer to help advertisers meet their marketing objectives:
The Automated Bidding Strategies to Choose From
|Bid Strategy||How it Works||When to Use It|
|Enhanced CPC||Half-way between manual and automated bidding - the Google Ads algorithm will increase your current bids when it's estimated a conversion is more likely to occur.||Enhanced CPC can be effective for campaigns which do not yet have adequate conversion data to use one of the fully automated strategies; and in instances where the account manager does not want to give up full control of the bid management.|
|Maximise Conversions||Google will optimise bids with the aim of generating the highest volume of conversions possible within the campaign's daily budget. All conversions will be valued equally by the algorithm, irrespective of their value to the business.||This strategy is ideal for use in campaigns that have one conversion action being tracked, or multiple actions that have the same business value.|
|Target CPA||Bids will be optimised in order to maximise the volume of conversions generated at the average CPA (cost-per-acquisition) price chosen by the advertiser. Some conversions may be generated at a cheaper or more costly price, but the system will aim to achieve the average.||The bid strategy is ideal when achieving a CPA target is critical to the success and profitability of a campaign, and spending the full budget is a secondary objective. The algorithm will always priortise reaching the average CPA target over reaching the daily budget.|
|Target ROAS||Bids will be optimised to achieve the advertiser's Target ROAS (return-on-ad-spend), adjusting bids for the different forms of targeting based on revenue that is expected to be generated.||This bid strategy is ideal for ecommerce sites, and accounts that are tracking revenue data from conversions.|
|Maximise Clicks||Google will optimise bids with the aim of generating the highest volume of clicks possible within the campaign's daily budget. It is useful to add a cap on the maximum bid, as the system will increase the max CPC as much ass possible to in order to reach the daily budget.||All clicks will be valued the same by the system, irrespective of the targeting. For this reason this strategy is ideal for campaigns whose objective is to generate traffic, without any conversion goals; or in the early stages of a campaign, before any conversion data has been accumulated.|
|Target Impression Share||Bids are optmised to allow ads to reach a certain position on the page (e.g. absolute top of page), a certain percentage of the time (e.g. 65% of available impressions).||This bid strategy is useful when awareness and reach are the highest priority for a campaign. A cap on the max CPC can be added to prevent overly expensive clicks.|
|Target Search Page Location||Advertisers can choose to target either the top of the first page, or the first page of the Google search results. Bids will then be adjusted to try to achieve this position.||This bid strategy is often very useful for brand focused campaigns, in which gaining the maximum level of exposure is of paramount importance.|
Can an Automated Bidding Strategy Help to Maximise The Volume of Sales Generated by Your Google Ads Campaign?
Google’s automated bidding strategies utilise the wealth of stored up campaign performance data, in addition to real-time user behaviour data, in order to help determine the optimal bid for each auction.
Therefore, the success of any automated bidding strategy will be contingent on the amount of data within your campaign, and also the level of user behaviour data that Google possesses on prospective customers within your target sector.
Some campaigns may benefit from the use of an automated bidding strategy and see an uplift in sales, while some campaigns may not.
Testing is Essential
The only way to really determine whether or not a particular bid strategy will be effective for a campaign, is by testing it.
In order to ensure the test is fair, and to confirm whether the given increase or decrease in performance is due to the change in bid strategy, both bid strategies need to run concurrently.
This testing can be carried out by duplicating the campaign and running both bid strategies side-by-side, or by using a campaign experiment.
Based on the results of the test, the better performing bid strategy can be identified and selected for ongoing use.
A Word of Caution
It’s important to be aware, when handing over control of bid management to an automated strategy, significant, and in some cases unintended changes can be made to bids. Average CPC’s can increase drastically, and beyond the level of profitability.
It is wise to always set a cap on the maximum bid where possible, and to keep a close eye on the performance, especially in the early stages.
It’s also important to realise that the process of optimisation carried out by the system can take days, or in some cases weeks, while the system tests different levels of bids to find the optimal setting. During this period, overall performance may see a dip before it improves.
There is a range of bidding strategies available to choose from, depending on the specific objectives of your campaign.
Automated bidding strategies can help to maximise the number of sales generated by your campaigns, and to achieve a variety of other marketing objectives; but the effectiveness of these strategies will depend heavily on the level of performance data within the account, and the level of user behaviour data possessed by Google.
In some cases, the machines will outperform their human counterparts, and in other cases, manual bidding will be the most effective option.Ultimately the only way to concretely confirm if a particular bidding strategy will be effective for meeting your campaign’s objectives, will be through testing.
Close observation of the performance is advised!