7 Types of Automated Bidding Strategies You Should Use

7 Types of Automated Bidding Strategies

Google Ads Smart Bidding, automated bidding, and manual bidding — there are many types of bidding. It can be difficult to understand how each works. It’s essential to keep up-to-date with Google’s constantly evolving ad platform in order to maximize the performance of your campaign.

What is Google Ads automated bidding?

Automated Bidding is a Google Ads strategy that maximizes results based upon your campaign goals. Google automates bidding by setting bid amounts based upon the likelihood of your ad converting or clicking. They analyze data like the device, operating system, time of day, demographics, and location to determine how likely it is that your ad will convert.

All of Google’s automated bid strategies are portfolio auto bidding strategies (an automated, goal-driven bid strategy that groups multiple campaigns, ad groups, and keywords). Advertisers can use their chosen strategy in all their campaigns, ad group, and keywords. Standard strategies are a type of ad strategy that can only be used in one campaign.

Automated bidding addresses two issues that advertisers frequently face in their campaigns:

  1. How high their bids can be competed for by qualified buyers
  2. It is possible for them to bid too high, possibly showing interest in people who don’t want to make a purchase.

Automating bids eliminates the need to manually update keywords and ad groups bids. Bids are set automatically and are unique to each auction (the bid will be different for every auction).

Automated bid strategies use past data to analyze it and then learn from the performance of future bids. This performance is another indication of Google’s movement towards machine learning, which is also used by their Universal App Campaigns.

Machine learning is a great tool to automate bidding, but it also has its limitations.

This bidding system cannot take into consideration recent events, media coverage, flash sales, and weather. A manual approach to setting bids might be needed.

Depending on your bid strategy, you can also get automated bids for Display and Search ads.

What is Smart Bidding?

Smart Bidding is a term associated with automated bidding and some may confuse the two as being the same thing. Smart Bidding, however, is a category of bidding that only includes conversion-based strategies.

Smart Bidding utilizes machine learning to increase conversions by analyzing data signals from each search and click. Google can adjust its bids to reflect whether it believes that a click will lead to a conversion using this data. Google will, for example, set a higher price for searchers who are more likely to purchase.

There are currently four Smart Bidding strategies:

  • Enhanced CPC
  • Target CPA
  • Target ROAS
  • Maximize Conversions

Requirements and suggestions smart Bidding require conversion tracking to be enabled unless you’re using Enhanced CPC and Display campaigns. Google also recommends that advertisers have at most 30 conversions within the last 30 days before they use Target CPA, and at least 50 conversions prior to using Target ROAS.

1. Maximize clicks

  • The goal: Site visits to increase
  • Available in: Single campaigns or across multiple campaigns. Ad groups and keywords.
  • Description: Maximize Clicks aims to increase your site’s visitors. This strategy automatically adjusts bids to maximize clicks within your budget. This strategy can be used as a standard strategy for a single campaign, or as a portfolio strategy that spans multiple campaigns, ad groups, and keywords.
  • Use it when: You have a solid funnel for conversion and want to get as many people to your site as possible.

2. Target search page location

  • The goal: Increase visibility on Google’s first-page search results page. Show in the top spots
  • Available in: Campaigns
  • Description: Target Search Page Location automatically sets bids in order to increase your chances of having your ads appear on the first Google search page or in the top ad positions. This is only available for portfolio bid strategies on the Search Network.
  • Use it when: You want to be ranked in the top Google search results.

3. Target outranking share

  • The goal: Other websites have more visibility
  • Available in: Campaigns
  • Description: Target Outranking Share allows you to choose the domain of another advertiser to be outranked in an ad position. You can also select how often you wish to outrank it. Google will automatically adjust your search bids to meet this objective. Target Outranking share is not available for portfolio bid strategies.
  • Use it when: You wish to be able to outrank your competitors in your industry.

4. Target cost-per-acquisition (CPA)

  • The goal: Increase conversions with your CPA target
  • Available in: Ad groups and campaigns
  • Description: Target CPA gives you more control over your automated bids. The strategy automatically adjusts Google’s Search or Display bids in order to maximize your conversions at the set cost-per-acquisition (CPA). You might get conversions that cost less or more than you target.
  • Use it when: You have a CPA you are comfortable with.

5. Enhanced cost-per-click (ECPC)

  • The goal: Conversions can be increased while you keep control over your keyword bidding strategies
  • Available in: Keywords, Ad groups, Campaigns
  • Description: Google automatically adjusts manual bids with ECPC to increase conversions and keep the cost per conversion at the same level. ECPC can be used as a portfolio bid strategy or a manual CPC bidding feature.
  • Use it when: If you are still using manual bidding strategies, but want to make use of automated bidding,

6. Target return on ad spend (ROAS)

  • The goal: When you value each conversion differently, you can achieve a target return of ad spending (ROAS).
  • Available in: Keywords, Ad groups, Campaigns
  • Description: Target ROAS automatically adjusts your bids to ensure you get the highest conversion value at your ROAS (the average amount you get in return for each dollar spent on ads). You might get a lower or higher return on conversions than your target. Target ROAS can be used as a strategy for individual campaigns or as a portfolio strategy.
  • Use it when: Instead of trying to get as many conversions as possible, you should focus your efforts on converting the most valuable leads.

7. Maximize conversions

  • The goal: Spend less and get more conversions
  • Available in: Campaigns
  • Description: This strategy automatically adjusts bids to ensure you get the highest conversions possible for your campaigns without spending all of your budgets. This strategy optimizes Google for higher conversion rates. Maximize Conversions can be used as a standard strategy in individual campaigns but not as part of a portfolio bid strategy.
  • Use it when: You have a large budget, and you want to automate your ads in order to increase conversions.

Advantages and disadvantages of automated bidding

Before deciding to implement any automated bidding strategy, you should assess both its advantages and disadvantages. What automated bidding strategy can help? Here are some answers

Advantages of automated bidding

  • Bids are automatically set so you can save time and not have to manually adjust bid amounts for individual keywords or groups.
  • Automated bidding utilizes machine learning to analyze performance over time and optimize according to your goal. Based on your goal, your ads should result in more clicks and conversions.

Disadvantages of automated bidding

  • Google will optimize the spot so advertisers can expect to see drastic changes (e.g., a higher bid than they expected) from time to time. Automated bidding works best for companies that have a large advertising budget and are flexible.
  • Google’s automated bidding uses historical data to optimize for your goal and predict future bids. Automated bidding is not the best strategy for companies that are just starting to use Google Ads.
    Bidding is now automated. However, it is still important to keep track of your campaigns and evaluate whether your bid strategy is reaching your goals.

Make the most of your search and display ads

Google’s automated bid system is a great way to save time and optimize for conversions, clicks, and whatever other goals you may have. However, it does have its limitations. You should not use automated bidding because it doesn’t offer the same level of control as manual bidding. Also, you need historical data before you begin using the bidding process.

You can make the most of Google search and display ads, as well as your entire digital advertising campaign strategy. The guide below will help you discover other ad types across all major platforms, including real examples, ad specifications, and targeting options.

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