Over the last two years, Google Ads has been progressively modifying its platform in a way that encourages marketers to utilize its automated capabilities. This development has generated conflicting reactions among advertisers.

Google Ads provides automated bidding, Smart Bidding, and manual bidding – the number of available bidding choices seems to be increasing, and it might be difficult to comprehend how each one works. Nonetheless, it is essential to keep up-to-date on Google’s ever-changing ad platform to enhance your campaign’s ad effectiveness.

Automated bidding is one of such characteristics. Automated bidding has evolved over the years, but this aspect of Google Ads remains daunting. There are several sorts, each with its own advantages and disadvantages.

According to rumour, Google spent significant development resources on their bidding capabilities (previously seen as a bad approach) to accommodate the tens of thousands of small-scale advertisers that may not know much about digital advertisements and have more pressing concerns. 

Mission achieved; they were so successful that they attracted the interest of significant marketers with specialized PPC teams and vendor ties. Where do things now stand?

Google Ads Automated Bidding benefits robot

 

First Thing First: What is automated bidding?

Automated bidding is a Google Ads bid method meant to optimize outcomes in accordance with your campaign objectives. Google automatically determines bid levels based on your ad’s chance to result in a click or conversion via automated bidding. To do this, they evaluate data such as the user’s device, operating system, search time, demographics, and location.

All automated bid techniques used by Google are portfolio bid strategies (an automated, goal-driven bid strategy that groups multiple campaigns, ad groups, and keywords). This implies that marketers may implement their selected approach across all campaigns, ad groups, and keywords. 

Several are accessible as standard techniques (an ad strategy that can be used in single campaigns).

Automated bidding tries to address two issues that marketers often have with their campaigns:

Whether or not their offers are competitive enough to attract qualified purchasers.

Whether or not their bids are too high and may be shown to those who have no intention of making a purchase.

Automating bidding is no longer necessary to manually adjust bids for keywords or ad groups. Automatically generated bids are unique to each auction (the bid will be different for every auction).

Automated bid strategies evaluate historical data and learn over time, informing future bids based on previous success. This performance is another evidence of Google’s shift toward machine learning, which is also used in their Universal App Campaigns.

While machine learning facilitates the automation of the bidding process, the method is not without flaws.

For example, this technique of bidding cannot account for current events, media attention, weather, or flash deals. Here, a manual technique for establishing bids may be required.

Depending on your bid strategy, automatic bids are possible for both Search and Display advertisements.

google AI helping with Google ads work

 

Automated bidding tactics

It’s one thing to be able to run your advertisements, but it’s quite different to do it quickly, effectively, and in a manner that provides a return on investment.

The good news is that there are tried-and-true methods that may swiftly lead you in the correct direction. Google Ads, for instance, may help you get your e-commerce company in front of the relevant people swiftly and inexpensively. Additionally, it provides time-saving capabilities, and who doesn’t desire more time?

Automated bidding is a compromise between control and efficiency. Automated bidding saves time and utilizes Google’s technology and proprietary data to optimize ads in accordance with your objectives. On the other hand, manual bidding allows you to keep complete control over your bids and adjust them within the same campaign. 

For instance, you may modify bids for specific search terms or goods in Shopping. Additionally, bid modifications may be made for Location, Day & Hour, Device, and Audience.

Google mentions “Some variables that automated bid strategies use for prediction include inventory signals, audience lists, creative effectiveness, and line item strategies.”

Automated bid strategies google graphic

 

What is Smart Bidding?

Smart bidding is a word connected with automated bidding, and some individuals may confuse the two. 

Smart bidding is only a type of bidding that covers conversion-based tactics solely.

Smart bidding is a collection of methods you may implement using automated bidding in Google Ads. They vary from previous kinds of automated bidding in that you are employing Google’s machine learning technology to optimize your bids for each auction every time an auction starts. This is what Google Ads calls “auction-time bidding.”

Smart bidding maximizes conversion rates by watching and analyzing data signals from every search and click using machine learning. Google may boost or reduce bids according to whether it feels a click will result in conversion based on this data. For instance, it will set a higher offer for searchers who are more likely to convert.

Currently, four Smart Bidding techniques exist:

  1. Enhanced CPC
  2. Target CPA
  3. Target ROAS
  4. Maximize Conversions

Smart bidding requires conversion tracking to be enabled (unless you are using Enhanced CPC with Display campaigns). In addition, Google advises that marketers have at least 30 conversions in the previous 30 days before employing Target CPA and 50 conversions prior to using Target ROAS.

google ads smart bidding ai graphic

 

Smart Bidding VS. Automated Bidding: Know the difference

Smart bidding and automated bidding are often used synonymously; however, they are not identical. Smart bidding solely refers to Google’s automated bidding tactics that use “auction-time bidding,” which optimizes for conversion or conversion value in every auction. 

However, not all automated bidding systems are Smart Bidding tactics.

The Pros And Cons Of Automated Bidding

Automating bidding is no longer necessary to manually adjust bids for keywords or ad groups. Automatically generated bids are unique to each auction (the bid will be different for every auction).

Before using any automated bidding approach, you should consider both the pros and disadvantages:

Pros:

You will save time since you will not have to manually establish bid amounts for ad groups or individual keywords because bids are set automatically.

Automated bidding uses machine learning to analyze performance over time and optimize for your particular objective. Theoretically, you should notice a greater number of conversions or clicks for your advertising, depending on your stated objective.

Cons:

Since Google will make on-the-spot adjustments, marketers need to anticipate big changes on occasion (e.g., a much higher bid than expected). Automated bidding is optimal for firms with a flexible and/or substantial advertising budget.

Google’s automated bidding system needs past data in order to optimize bids for a specified objective and anticipate future bids. Automated bidding may not be optimal for firms just beginning to use Google Ads.

While bidding is automated, you must still monitor your campaigns to see whether the bid strategy is achieving the intended objective.

The 6 Types of Automated Bidding

The most important stage in setting up automatic bidding is selecting a strategy. This informs Google of your objectives and provides it with instructions for determining how to bid on your behalf.

There are six major techniques available for selection. Let’s begin with the first three, which have distinct purposes:

Maximize Clicks

This is exactly what it sounds like: your money is spent to get the maximum number of click-throughs. If you want to attract a large number of new customers to your shop, this is the way to go. This is a possible beginning technique, but you should likely convert to a more specialized approach if you have conversions in your campaign.

Target Impression Share

Rather than concentrating on clicks, you may like for your advertisements to be as prominent as possible. This is intelligent when attempting to establish a brand and make it distinctive. With this method, you can have your ad shown on search results pages more often and in better (read: higher) locations.

Maximize Conversions

In addition to clicks and exposure, you should also prioritize genuine conversions. This technique focuses on spending your money to lead to the greatest number of genuine conversions, as opposed to just displaying your ad widely or attempting to gather clicks.

In varying respects, the following three techniques are likewise conversion-focused:

Target CPA

This allows you to specify an Action Cost (CPA). The algorithms then attempt to get as many conversions as feasible at or below the specified cost. This is important if you want to regulate how much you spend on each conversion individually.

Target ROAS

Similar to the preceding technique, you will begin by establishing a critical statistic – in this case, Target Return On Ad Spend (ROAS). This focuses on how much you pay for each advertisement against how much you get.

Maximize Conversion Value

This method is intended to maximize the entire conversion value of your advertising campaign. For instance, it utilizes real-time data to display your advertisements at optimal times and locations.

Don’t worry if you don’t comprehend the nuances of these methods just now. Google has extensive documentation to help you get started, and it is simple to receive assistance selecting which solutions are best for you.

The objective is to illustrate the adaptability of Google Ads automated bidding. You’re not just giving Google carte blanche to spend your money any way it pleases; you may provide specific instructions on how you want your money spent.

rubik's cube of google ads services

 

Should You Use Automated Bidding?

You may use the benefits mentioned above and the negatives to decide whether to use automatic bidding. In a generic sense:

Automated bidding is for you if you are short on time, lack an educated or experienced marketing staff, or just believe that Google can do a better job than you can. It is especially beneficial if you manage several campaigns.

If you or your team are already highly informed and confident in submitting competitive offers, you may appreciate the control that manual bidding provides (and get better results). This method may also be a more efficient way to learn about the platform and your audience and maximize a limited budget.

You will also notice that automated bidding tactics are more successful as your campaigns generate more conversions (sales and leads). When the quantity of conversions increases, it is much simpler for the algorithms to zero in and become laser-focused on your ideal sort of click.

Finally, remember that this is not an either-or situation. Certain campaigns can use automated bidding, while others cannot.

It is not a terrible idea to concentrate more on manual bidding while you’re first starting with Google Ads (if you have the time). You may begin with modest quantities, make adjustments, and see what catches your audience’s interest.

Automatic bidding might be a lifesaver when you have a larger advertising budget and run many campaigns. However, do not be scared to experiment with it from the very beginning. As with any sort of marketing, experimentation is the best method to determine what works.

You will also notice that you may use something known as “portfolio bid strategies” to regulate the maximum CPC that automated bidding strategies can reach. It provides an additional layer of control to prevent CPCs from exploding and becoming too high.

Conclusion:

Many of your prospective clients use Google to seek items similar to yours. SEO is beneficial for attracting their attention, but it is time-consuming, and results cannot be assured. On the other hand, Paid advertisements guarantee that you appear at the very top of relevant search results.

Even better, Google’s automatic bidding makes it simple to specify a broad objective and a particular budget, after which you can sit back and let smart algorithms maximize your results. 

While experimenting with manual bid-setting is not a terrible idea, automatic bidding may optimize your results with less time and effort on your part.

In general, automated bidding tactics are ideal for covering any knowledge or time gaps you may have. 

Even if you are an expert, it is often impossible to compete with the system’s machine learning because of its computational power and access to Google’s private data in real-time auctions.

Remember that you do not have to select a single automated bid strategy for your whole account; you may choose which automated bid strategies to utilize for particular campaigns. 

Depending on your approach, you may configure your strategy at the ad group, campaign, or portfolio level.

Hopefully, this post helped in highlighting the pros and cons of automated bidding.