When it comes to advertisers, Google is eager to please. The search engine truly does want to help you market your business in every possible way. Which is why Google has developed automated bidding strategies to help you manage AdWords campaigns. Google touts automated AdWords bidding as a great solution for advertisers who want “to save time managing bids based on hundreds of signals.”
According to Google, automated bidding:
takes the heavy lifting and guesswork out of setting bids to meet your performance goals. Each type of automated bid strategy is designed to help you achieve a specific goal for your business.
These bidding strategies can help your brand achieve goals like:
- Getting the most clicks out of your campaign
- Driving the total campaign focus to a certain cost per acquisition (CPA) goal
- Outbidding your competitors
Each of these strategies may focus on one particular factor, but they have one thing in common and that’s to help campaigns reach their overall maximum potential in a way that’s efficient for those managing the campaigns.
The way automated bidding strategies work is by driving the most potential from your keywords with one common maximum cost-per-click (CPC) bid – the amount you are willing to spend to appear for a given search term.
You may notice that after you “flip the switch” to enable one of these strategies, your keyword-level max. CPC bids drop to the lowest that they can go – which in most cases is $.01. Then, your bids will slowly adjust/raise each day to see how the auctions bear out for your campaign.
What’s happening is the algorithm is trying to learn to the best potential performance at any given cost. It’s enacting the theory that if the tide rises then all ships must rise with it. It usually takes about five days for the algorithm to fully learn. While this is happening, AdWords will tell you how many days are left within the little talk bubble above “eligible.”
The problem with automated bidding strategies
Bids will keep rising if you don’t set a ceiling. Meaning you could end up paying $40 a click for a term that would probably net a $10 click if you used the good ole fashion “manual CPC” model. If this were poker, you would be betting on every hand and raising every time. Sure, you might win a few hands, but it’s going to cost you.
Don’t get me wrong, automated bidding strategies are a good temporary solution if you need to jump-start a campaign and don’t have a lot of spare time to manage bids manually. But, a more hands-on approach can be a more cost-effective way of finding ideal bid limits for your campaigns.
You might be saying “Adam this sounds great, but I have a business to run.”
I get it – you want to do manual CPC but don’t want to do the calculations.
Manual bidding – another way to manage AdWords campaigns
Luckily, Google tried to make it as easy as possible for you to take control of your AdWords account and just focus on specific keywords or ad groups. In the AdWords dashboard, clicking on the button below will open up a handy-dandy little chart that tells you what you would get with each CPC increase. The icon will show directly to the right of the ad group or keyword in your AdWords dashboard.
When you click on this icon, a bid simulator will open up that looks like this:
Now you will see what bid levels will drive performance. At the current maximum CPC, this keyword will net an estimated 15 impressions. (Depending on the situation and bid, you can see the estimated number of clicks, conversions and impressions.) To find out how increasing your bid will impact performance, just click on a higher CPC and watch the impressions increase and the traffic start rolling in.
Manual vs. automated bidding: which is better?
All in all, automated bidding is a temporary solution that delivers mixed results. If you are running a smaller account with only a few campaigns, go for it. But going to manual bidding on your typical in-house business account is usually the best long-term solution.
If you need to scale your campaign, you can use custom bid rules that can run daily, weekly or monthly. One of the biggest reasons I like to use custom bid rules is you can set up alerts to warn you if there’s a change to your campaign. Once alerted, you can go into the AdWords panel and see the changes in detail. These rules are a great way to make campaign adjustments more efficient. Now, if things seem to be amiss somewhere else, you’ll still need to get out the magnifying glass and take a closer look to figure out what could be causing the problem.
Another good time to use automated bid rules is to help manage efficiencies within your AdWords accounts. For instance, we can set a rule to look at the number of impressions then look at CTR and then conversions to determine if a keyword should be paused. This is a good rule to run when you have a large paid search account and need focus on top-performing terms.
So, while manual bidding is more likely to be the way to go, there are instances where it’s worth employing automated bidding strategies. It takes time to know when to use which bidding strategy, but there are so many more ways to manage your account than just flipping a switch and hoping for better results. If you are unsure which way is best for your AdWords campaigns, you should consult an experienced paid search agency to find the strategy that works best for your business.
Have questions about your Google AdWords campaigns? Mindstream Media is a Premier Google Partner. Contact us to find out how we can help improve your paid search campaigns.