The Pros and Cons of Google Automated Bidding Strategies

If you have a Google Ads account, you’re probably wondering when you should utilize Automated bidding.

Automated bidding is a contentious topic. There are some that in favor of it while others are not. Let’s be real — there are currently a lot of bidding options available in Google Ads that it’s becoming more difficult to understand how each one works. It’s challenging to determine which one would work best for your account if you don’t know how each one works. Once you understand it, it would be easier to decide whether or not you have used for every single bidding strategy somewhere in your account or unable to use any. Only then would you be able to determine if automated bidding is for you. 

This article will help you determine which bidding option would probably work best for you by explaining the alternatives to automated bidding and what you should look out with automation. 

Every brand new account begins with manual bidding. 

Handbook Bidding

Manual bidding is probably the most uncomplicated bidding strategy on Google Ads to understand. The quotes are set by the advertisers manually at the keyword level, and it won’t change until they change it. While it has disadvantages, it’s also the best for those who are just starting to use Pay Per Click or those who don’t have a lot of time to handle their account. 

Disadvantages of Manual Bidding

First, it’s time-consuming. You will need to dedicate a lot of time to check if the keywords require alteration, check the efficiency, determine the requirements for the alteration, and alter. 

Second, by using manual bidding, there’s a chance it’s under-informed since it would depend on the metrics that Google permits marketers to see when they evaluate the efficiency metrics on their projects. Unlike in automated bidding, where Google can gather information points. 

However, keep in mind that while manual bidding has its disadvantages, it doesn’t necessarily imply that you should not use manual bidding. These are points to consider when you’re trying to determine which bid strategy would work best for you. 

Overview of Automated Bidding Strategies offered by Google Ads

Enhanced Cost-Per-Click (ECPC)

ECPC bidding is very comparable to manual bidding. However, what differentiates manual bidding from ECPC is that with the latter, Google Ads automatically alters your manual bids to aid you in generating more conversions while staying in control of your keyword bids. 

ECPC is enabled by examining the package listed below the manual bidding setting or selecting Boosted CPC from the bidding type fall. 

ECPC permits Google Ads to increase or decrease a bid for a keyword in an individual auction. It is based on the likelihood that a click will result in a sale. There used to be a cap of 30% modification, but it is no longer applicable. Google Ads can now modify any level. 

ECPC is best used for those who use manual bidding but wishes to take advantage of automated bidding. Increased click-through rate (CTR), cost-per-click (CPC), and conversion rate (CVR) are the expected result of a successful ECPC. 

Fair Warning for ECPC

Considering that keyword bids can be adjusted with no restrictions with ECPC, there’s a possibility that the offers and the resulting CPCs could be more costly than what is profitable. This bid aims to increase the probability of a conversion, not automatically at the target cost per conversion (CPA). If you’re using manual bidding and your account is doing well, you can try out ECPC as your first step into automation. It’s crucial to monitor whether both CTR and CVR are going up to ensure that your strategy is working as presumed. However, it is equally important to monitor the CPA and CPC to ensure that the results are still financially rewarding. 

Maximize Conversions

Maximize Conversions is a wholly automated bidding strategy as opposed to ECPC. Essentially, there are no distinct keyword bids set by marketers that Google takes into consideration. It just picks a CPC bid based on the aimed outcome of the bidding strategy. 

The objective of the Maximize Conversions bid strategy is to secure more conversions while spending your whole budget. Therefore, your budget mustn’t be a shared one since it will maximize the allotted budget. Keep in mind that if there is no specifically allotted budget but is only included in a shared budget, then the entire budget would be spent by Maximize Conversions alone instead of only its allotted budget. Furthermore, there are no added settings for the marketers to control, unlike in the other bidding options. 

It is a standard strategy for individual campaigns and is best for advertisers with a considerable budget who wish to automate their ads to bring in more conversions.

Warnings for Maximize Conversions

While this bid strategy is relatively easy, however, just like most things, it still requires alertness. Always remember that this strategy should not be run without a conversion tracking in place. Since Google aims to maximize the number of conversions being tracked, then there’s a higher probability of the algorithm making bad decisions to obtain an individual who’s keen to convert if no tracking is enabled. Another point to consider is that this bidding strategy may not work best, and could even be perilous for those aiming to make a financial gain. The reason being since the whole budget allocated would be spent by Google irrespective of the conversion performance, then the end profitability may either be exceptional or devastating. 

If your main objectives are financial gain or efficiency, Target CPA or Target ROAS may work best for you. 

Target cost-per-acquisition (CPA)

It’s a wholly automated bid strategy. Advertisers set a target cost per conversion, and Google automatically sets display or search bids to help you obtain as many conversions as possible at that CPA. Some CPAs may go beyond or lower than your target CPA through this bidding strategy, but Google will attempt to gradually stabilize your target CPA. There would be no distinct keyword-level bids to modify since the target CPA is set at either the campaign or portfolio level. For portfolio level use, advertisers can place minimum and maximum bids to make sure that Google wouldn’t modify bids through the floor or ceiling. However, bid caps do not apply to those who are targeting individual campaigns. It’s best used when you already have a set CPA that can be spent to ensure that you obtain a patron while still maintaining a profit. 

Warnings for Target Cost-per-acquisition

Target CPA bidding necessitates that conversion tracking is enabled in your account just like in Maximize Conversions. If the conversion tracking is not enabled, this bidding strategy would be futile since you would not be able to determine if it’s bringing in conversions or not. However, even if the conversion is enabled, it doesn’t mean that you’re all set. To be able to drive conversion performance, Google still requires a definite amount of conversion data to be able to make wise decisions. The algorithm wouldn’t be able to make smart decisions if the conversion volume is insufficient. 

According to Google, the minimum is 15 conversions in the last 30 days at the campaign level. However, the idea is to have at least 30 conversions minimum in the past 30 days before giving Target CPA bidding a go. If this number is not reached by your campaign individually, it’s possible to get it at a portfolio level. Nevertheless, if this number is still not reached, it would be best to strike out Target CPA on your eligible bid strategies list. 

Another point to consider when trying out Target CPA is the importance of setting realistic initial objectives. To illustrate, if your campaign has had a standard CPA of $40 over the past six months, setting a target of $20 would probably not be the best since it would restrict Google in the auctions that it can join in and learn. If you’re thinking of using Target CPA bidding, use the first two weeks of a month as a learning period. It would be best to set your target CPA to be a bit higher than your current standard CPA or utilize the CPA target suggested by Google to let Google find its footing before gradually reducing it to your Target CPA. 

Target Return On Ad Spend (ROAS)

This is almost similar to Target CPA. The objective is to meet a Target ROAS when you estimate each conversion differently. The ROAS is the standard value that you gain for every dollar that was spent on ads. In this bidding strategy, Google Ads will forecast future conversions and conversion value performance based on your past data to enter auctions. The bids will be modified in real-time to maximize conversion value while attempting to attain the Target ROAS objective set at the ad group, campaign, or portfolio level. Like Target CPA, some conversions may have a higher or lower return than your target, and Google will stabilize those to attain your ROAS target. 

Advertisers can set minimum and maximum bid limits at the campaign or portfolio level to assist the Google algorithm from drifting too far. However, keep in mind that Google warns against this as it can restrict the machine’s decision making. This bidding strategy is best for those who desire to prioritize driving the highest conversions value instead of attempting to garner the highest number of conversions.

Concerns for Target Return On Ad Spend

All the misgivings surrounding Target CPA similarly applies to Target ROAS. To use this bidding strategy, make sure that you have a precise conversion tracking that includes conversion values and adequate conversion performance in the recent past. 

Be mindful not to set your Target ROAS at a restrictively inflated level right from the very beginning. To begin with, it would be more advantageous, a goal that is somewhat lower than your recent performance, and then to gradually raise the target to attain a more profitable ROAS.

Maximize Clicks

Similar to Maximize Conversions, the difference lies in that this strategy focuses on clicks. In this bidding strategy, Google will attempt to garner as many clicks as feasible while spending your allocated budget. This would be best for advertisers who wish to bring in more volume to their website for branding and list building. It’s also for brands that have excellent conversion performance and desires to find more work. 

If the advertisers set a max CPC limit, it would help keep CPCs down while Google expends the allocated budget. 

Concerns for Maximize Clicks

Since Google will spend the whole allocated budget to get as many clicks as feasible, even if the clicks are more costly than normal, it’s crucial to always set a max CPC and monitor your average max CPC. Frequently look into the CPC performance to make sure that your objectives are still being met. You may want to modify your setting or use another bidding strategy if your goals are not met by this bidding strategy. 

Target Impression Share 

Target Impression Share allows advertisers to set a goal Impression Share percentage similar to setting a Target CPA. 

There are three placement choices you need to bid for with Target Impression Share:

Utter Top of Page
Top of Page
Anywhere on the Page

Each of these options will apprise the Google algorithm various things about your predisposition, and the algorithm will then modify the bids accordingly. 

Furthermore, advertisers can set a max CPC bid with Target Impression Share bidding to safeguard against overspending. However, you must remember not to put it too low so that you will not stifle this bidding strategy’s performance. 

Fair Warning for Target Impression Share

This bidding strategy prioritizes awareness and reach, but just like any other bidding strategy, there’s a probability that your bids will be greater than your profits if you’re not cautious. Therefore, you must set a max CPC bid to ensure that you don’t spend too much on a single click. While Google cautions against setting the max bids too low, placing it low is more appropriate for those just starting. Test it out by assigning a percentage increase over your current bid of 20-50%. Leave that cap if it’s successful. However, you should increase the max CPC if you’re not seeing the volume that you desire. Since only a few auctions will actually see 100% coverage, don’t be startled when you appear closer to 95% as a maximum possible number instead of 100%. 

Make sure to monitor the CPCs and performance outcomes to make sure that this bidding strategy is attaining your objectives. 

Target Search Page Location 

This bidding strategy aims to amplify visibility by allowing advertisers to have their ads shown on the opening page of a Google search results page or show in one of the top positions. This is best for those who desire to rank as one of the top positions in a Google search. This bidding strategy automatically sets bids to increase the possibility that your ads will appear on the opening page of a Google search or in one of the top positions. It is only available as a portfolio bid strategy. Furthermore, the settings will permit bid automation modifications, manual CPC bid limits, low-quality keyword setting, top-of-page, or first-page views. The low-quality keyword setting enables you to eliminate keywords with a quality score of less than four, as raising their bids to attain a particular page position can make for broader impact than keywords with higher quality scores due to ad rank calculations. 

Concerns for Target Search Page Location

The purpose of this strategy is to obtain ad impressions in a given location on the results page, but it does not prioritize financial gain or performance numbers. Even if it’s crucial for your brand to show up at the top or on the initial search page, this strategy may not be for you if your ads have CPCs or CPAs that are too high in those positions. 

Target Outranking Share

This strategy is comparable to Target Search Page Location because it prioritizes an ad’s placement in an auction instead of the outcome of that placements. The objective is to increase visibility over other sites by helping advertisers rank higher in search results than another domain. This strategy makes it possible for advertisers to select the domain that they wish to outrank and how frequently they want to surpass it. The search bids are automatically set by Google to aid in meeting that goal. It’s only available as a portfolio bid strategy. Therefore, this is best for those who wish to outrank a particular competitor. 

Concerns for Target Outranking Share

All the precautions that come with Target Search Page Location are also applicable to Target Outranking Share. However, there is one that is only applicable to this strategy: competition.

When using this strategy, a bidding war between you and another domain might ensue. This is akin to bidding for an opponent’s brand name. Keep in mind that this bidding war can make your ad impressions unprofitable since it will drive up the CPCs for both parties. In this scenario, the only one who will end up victorious is Google. 

Cost per Thousand Viewable impressions (vCPM)

This type of strategy is a display only bid strategy, the objective is to allow advertisers to bid for impressions when their ad is displayed in a viewable space. A critical element for this strategy is the definition of ‘viewability’. As claimed by Google, “An ad is counted as “viewable” when 50% of your ad appears on screen for one second or longer for display ads and two seconds or longer for video ads.” This strategy is best for those who wish to widen their brand coverage and get their message across many people. 

Concerns for Cost per thousand Viewable Impressions

In vCPM bidding, look out for frequency and placements. In this strategy, Google will attempt to maximize the number of viewable impressions that your ad receives. The possibility of hitting a high frequency for every individual user rises if you use this strategy and limited viewers. 

Who hasn’t experienced ads that give the impression of stalking us as we browse the web? Therefore it’s essential that even though you want to maximize your views, don’t overwhelm them. 

Another point to consider is that not all viewable impressions are identical. Like any other display campaign, always monitor your placement report to ensure that your ads don’t appear on unfavorable websites. 

You’re probably wondering when you should use automated bidding?

You probably thought that since we’ve already discussed the different kinds of bid strategies, the only thing left is choosing one that would work best for your whole account. On the contrary, the most pleasing thing about automated bidding is that you won’t be constrained to choose only one strategy for your entire account. Rather, you have the option to select what method to use and where to use it. 

Since Google Ads permits automated bidding strategies to be set either at the campaign, ad group, or portfolio level, depending on the type of system chosen, advertisers can direct which facet of their account depends on bid strategies that suit their objectives. 

Before choosing a bid strategy, assess at the campaign level to ascertain if the process you want to select. It can help you attain your objectives and whether you have sufficient data, like enough conversion volume for Target CPA to be effective, for it to be successful. However, if you do not have the essential requisites for the bid strategy to work, consider another approach, a portfolio level strategy, or even an alteration in the account structure for better leverage at some point in the future. 

Conclusion

While automated bid strategies in Google Ads are a remarkable way of saving time while still optimizing your account. Just like all things, remember to proceed with caution. Do your research to determine which would work best for your objectives before choosing which one to use.  

Each of the strategies mentioned in this article – bidding, ads, and keywords, or automated rules – can be utilized in any account, but only if it’s suitable. Always remember to monitor the strategy that you chose to ensure that it’s still helping you attain your objectives.

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