October 24th, 2019
Artificial intelligence has come a very long way, especially over the last 5 years. With this in mind, Google is consistently working on improving their systems and algorithms to benefit all parties, such as the consumer and producer.
If you have a Google Ads account or are looking to get one started, it is very likely that you have seen the automated bidding available within the Google Ads dashboard. Assuming you have and you do not know what automated bidding means, you are probably wondering if this strategy can benefit you? At Brave Agency, we have a team that specialises in Pay-Per-Click accounts. We work with our clients to generate growth rather than work for our clients. To view our PPC case studies, click here!
With Halloween just around the corner, it felt very fitting to discuss whether Google Ads automated bidding is a trick or whether it is a treat! In this article, we will be delving into the pros and cons of Google’s smart bidding…
What Are Automated Bids On Google Ads?
Automated bidding is a strategy found within Google Ads. It is designed to maximise results based around the chosen campaign Goals. When using an automated bid strategy, Google will set its own bids on keywords based on the data it has. The data includes user’s device, operating system, time of day, day of the week, demographics, locations and much more.
All of the available automated bidding strategies can be set at an account level, campaign level or adgroup level. This allows for part manual management and part automated management. The main purpose of Google’s automated bidding strategies is to allow businesses with little time or experience to manage a Google Ads account and compete with bigger competitors. automated bids are available for both Search and Display ads depending on the bid strategy you are using.
By using automated bids, there will be no need to update bids on keywords or ad groups manually. Google’s A.I (Artificial Intelligence) will set bids automatically in order to yield a positive Return on Investment based on your chosen goal.
Automated bid strategies will use legacy data within the account and continuously develop over time with new data. The A.I will use the past performance to make data-driven changes throughout the bids. Although machine learning helps to automate the bidding process in Google Ads, the system has its drawbacks.
The Different Types of Automation
When setting up an account, campaign or adgroup; you have 6 different types of automated bidding strategies. Below, we have added an overview description of each variation.
- Maximize clicks will set your keyword bids to help your advert get as many possible clicks within your monthly budget as possible.
- Target Impression Share will automatically set bids on keywords with the aim of showing your advert on the absolute top of Google or anywhere in the search results. This strategy is only available for Search Network campaigns.
- Target CPA (cost-per-acquisition) will automatically set Search and/or Display bids in the aim of getting as many conversions at the price per conversion that you have set.
- Target ROAS (return on ad spend) will set bids to yield the return on investment that you have manually chosen. It will use conversion value and ad spend to do this.
- Maximize conversions will automatically set bids in the aim of getting the most conversions for your campaign within the set budget.
- Maximize Conversion Value will set bids on keywords to help the campaign yield the highest conversion value possible within the given budget.
The Pros Of Using Automated Bidding
When analysing the overall advantage of automated bidding, lack of time and Google Ads experience are key reasons to use an automation strategy. Using smart bidding will reduce the management time of a Google Ads campaign by a significant amount.
Another common reason for using an automated bidding strategy is when small businesses are trying to compete against industry giants with huge budgets and agency retainers. This allows the small businesses to invest more money into their click budget rather than paying a local Google Ads agency to manage their account.
The Cons Of Using Automated Bidding
Automated bidding is artificial intelligence, which means it does not have the human touch and knowledge of the industry, objectives and brand. The account owner would have no control over how the budget is spent on which keywords. To give you a theoretical example; you have two products. Product A sells often but has a small profit margin compared to product B that has a lower conversion rate and a strong profit margin. Google’s smart bidding will push conversions on product A rather than product B, as its goal is to generate the highest number of conversions. This is a good example of how automated bidding can mean a Google Ads campaign loses its human touch.
It is also important to raise the concern that many business owners would want to know; If you have a campaign set to automated bidding and 3 of your competitors also have a very similar campaign that is set to automated bidding, how will Google set the bids in this instance? Is it the account with the biggest budget? If this is the case, it’s questionable how well small businesses will compete with their largest competitors in this example.
Is Automated Bidding A Trick Or A Treat?
As we have summarised the pros and cons of automated bidding, we are not concluding that automated bidding is a trick. In fact, it is a great tool for accounts with extremely rich data sets or start-up businesses with a small budget that would be better spent in click spend. In these cases, it would be a treat!
On the other hand, if you are using automated bidding with no/little conversion history, this will not benefit the account because Google’s A.I will have no data to work with. If you are interested in your Google Ads account to be reviewed and audited, we have a team of PPC specialists here at Brave Agency with over 25 years of experience put together. Give us a call today on 01733 602020!