The Ultimate Guide To Automated Bidding

when you should use automated bidding

If you’re a business, you likely already have an account on Google. These accounts allow customers to look up information about you, see ratings, read reviews, and more. On the business end of things, there are Google Ads. 

Google ads has multiple categories of biddings that differ quite a bit from each other. It’s important for you to know the difference between them and how exactly automated bidding can benefit you. It doesn’t have to be stressful and confusing, especially when someone else has done the research for you! 

So, to save you time and energy we’ve compiled the ultimate guide packed with everything you need to know about automated bidding and when you should be using it. Let’s start off by talking a bit more about what the different categories of Google Ads bidding are! 

Different Bidding Categories

Below we’ve included three of the main categories of bidding that Google has. If we’ve done our work well, breaking this down will help you understand the differences between manual bidding, automated bidding, and smart bidding. 

Automated & Manual Bidding

From the research we’ve conducted, automated bidding is a strategy that Google Ads uses to relay results for your campaigns. Manual bidding is similar, but you control the maximum amount that you want to pay for each individual click on your advertisements. 

Using automated or manual bidding will help to make sure the right people are seeing your ads. This can turn people browsing the web and making search inquiries into customers. 

In order for this to work, Google analyzes information such as someone’s device, what operating system they’re using, what day of the week they’re searching, what time of day or night, demographics, and even location. 

These strategies are goal-driven bid strategies that are applied to your campaigns, keywords and ad groups. They are considered portfolio bid strategies that are designed for advertisers to gain a more direct audience. 

Lastly, you have the option of using a standard strategy if you’re just wanting to apply one to a single campaign.

Smart Bidding

A lot of the time, people can confuse smart bidding with automated bidding. This is common and if you’ve done it before, you’re not alone! The easiest way to describe smart bidding is that it’s an automated bid category that only includes conversion-based strategies. 

There are also fewer strategies when it comes to smart bidding. The system uses a machine to allow for more conversion results in less time. Google will then increase or decrease bids depending on the results the machine shows. 

If it’s a good conversion, the bids will increase and vice versa if it’s not a great conversion. This makes it so the people seeing your business in their search results are people that are more likely to buy your product or service. 

The four strategies we mentioned are the following:

  1. Target CPA (cost-per-action/acquisition) 
  2. Maximize Conversions
  3. Target ROAS (return on ad spend) 
  4. Enhanced CPC (cost-per-click) 

It is important to note that if you’re interested in using smart bidding, you need to have conversion tracking enabled. If you don’t, it simply won’t work. In addition, Google suggests that your business has a minimum of 30 conversions in the past month before you attempt to use Target CPA and a minimum of 50 before you use Target ROAS.

Features And Weaknesses Of Automated Bidding

Just like everything else, automated bidding has it’s pros and cons. We’ve included a few to give you a better idea whether or not automated bidding is something you want to incorporate into your Google Ads. 

Pros:

  • Bids are set automatically, which will save you a ton of time
  • You’ll have more conversions since automated bidding uses a machine based on your specific ad goals 
  • You’re able to easily cross analyze data
  • Results are guaranteed
  • It takes a lot less time than other forms of bidding

Cons:

  • Changes to your campaign can be quite drastic, which can positively or negatively affect your budget 
  • Start-ups can’t use automated bidding unless there is enough historical data for Google Ads to work with
  • You and your team will still need to monitor campaigns

When Should Automated Bidding Be Used

So, when should you be using automated bidding? There are a number of instances, but it can really come in handy if you’re pressed for time. Automated bidding is much faster than manually setting your bids. 

You also are much more likely to get more conversions when you’re using automated bidding, which may be a great reason to use it. As you’ve seen, automated bidding does come with some weaknesses, but so do the other categories. Luckily with automated bidding, the pros outweigh the cons. 

If you’re a business that has a decent set of historical data, you’ll likely get a lot out of using automated bidding. You can use strategies to get the most out of using a bidding system. Let’s talk a bit about that next! 

Seven Types Of Automated Bidding

Below you’ll find the seven different types of automated bidding strategies. There are certain things to take into account for each of these options. You may not have the budget for one, while you may need more of a history for another. Be sure to look at the details of each strategy to find which ones will work best for you! 

1. Maximizing Clicks

Maximizing clicksFirst and foremost, you can maximize clicks to increase the amount of traffic your site sees. This can be done in one or multiple campaigns at a time. You can also use this within ad groups and sets of keywords. 

Using a maximizing clicks strategy is best if you’re trying to increase the amount of traffic your website sees. The strategy automatically sets bids that will aid in your site getting more clicks. The amount of clicks you can get will depend on the size of your budget. 

If you have a conversion funnel that you trust and are looking to increase website visitors, this is a great strategy to put to use. 

2. Target Search Page Location

Next is the target search page location strategy. This will automatically create bids that will help increase your ads appearing first when someone completes a search inquiry on Google. Having your ads be one of the first ones to appear increases the likelihood of the user searching to choose you over another business.

The goal of this is to increase the amount of people that see your ads by putting your advertisement as one of the first that is shown. Because of this, it is only available to be applied to campaigns

If you’re looking to improve your ranking on Google, this is a solid strategy to apply to your campaigns. 

3. Target Outranking Share

Next we have target outranking share. This is when you can pick and choose someone else’s domain that you want to outrank when it comes to ad positions. You can also choose how often you’d like to outrank it. 

Google will take your search bids and use them to help you automatically outrank other companies. It’s important to note that it’s only available as a portfolio bid strategy, which may not apply to everybody. It’s available in campaigns and its main objective is to increase your ad’s overall visibility in comparison to competitor websites. 

If you’re looking to stand out from the crowd and rank up higher on Google, this is an amazing strategy to apply. 

4. Target Cost-Per-Acquisition (CPA)

Using a Target CPA lets you have more control over your bidding. When you use this type of strategy, Google will set bids that correlate to searches and displays that can help you increase the amount of conversions in relation to your cost-per-acquisition. 

When using this strategy it’s important to keep in mind that some conversions may cost more or less than what you target (hence, the name). It’s available for campaigns and ad groups and is best used in single campaigns or as a portfolio bid strategy. When you’re trying to establish a cost-per-acquisition, using this strategy can help you maintain a profit while you’re trying to gain more customers. 

5. Enhanced Cost-Per-Click (ECPC)

enhanced cost per click

When you use enhanced costs per click, Google uses it adjust your manual bids. This can increase the amount of conversions you have without changing your cost-per-conversion. Enhanced cost-per-click is an optional feature that can be applied to manual CPC bidding or in addition to a portfolio bid strategy. 

This strategy can be applied to campaigns, ad groups, or keyworks. If you’re looking to gain more conversions without giving up control of your keyword bids, this just may be what you’re looking for. 

6. Target Returns On Ad Spend (ROAS)

Target ROAS will automatically set any bid you want to help increase your conversion value at the same time you set your ROAS. Your ROAS is the amount you get in exchange for every dollar that is spent. Depending on the conversion, you may have a return that is more or less than your original target. 

You can use this strategy to have a target return met when you have unique conversions at different values. It can be applied to campaigns, keywords, and ad groups. If you’re looking at getting a better value of conversions instead of getting more conversions, this is the strategy you may want to use! 

7. Maximize Conversions

Lastly, you can maximize your conversions. This is a strategy that will set bids for you. The bids will be set to increase the amount of conversions your campaign will get, but will spend the entire budget you have set. This is why it’s called maximize conversions – you’re using all of your resources to get the most conversions. 

It’s only available for campaigns and the main goal is to get more conversions while you spend your budget in its entirety. If you have a bigger budget and want to use ads to get more conversions, give this strategy a try and see how it works for you. This isn’t a strategy for start-ups or people with small budgets. 

FAQ

How does CPA bidding determine CPC?

Google AdWords automatically does the math to find out a maximum for a CPA bid for every keyword that you have in your campaign. Google divides your current max CPC by your conversion rate. Once the bids are determined, they are averaged and weighted for each keyword. 

How much are you charged when someone clicks on your ad?

It can vary quite a bit but it’s important to know that there is a minimum that is needed to keep your ad’s position. The amount your charged has to do with your costs-per-click and your conversions and will vary from one ad to another. 

How much does Google charge per click?

The average cost-per-click when you’re working with Google Ads ranges from $1-$2. Again, this can vary quite a bit. Sometimes it will cost just a few cents per click, while other times it can cost you over $50 per click. Google has a keyword planner tool and a bid simulator to give you a better idea. 

Are Google Ads worth it for my company to invest in?

This can be different for every company but speaking generally, yes. Not every company has the budget to use Google Ads, but if you have the money, it’s well worth it. Google is the #1 search engine and is visited by millions of people daily.

It’s best to do your research so you know the pros and cons of using Google for your advertisements versus other hosts. 

Final Words

There you have it! That is just about everything there is to know about automated bidding on Google. Using these strategies listed above, you’ll be able to do everything from increasing the amount of traffic your site sees to getting as many conversions as possible. 

It’s important to be mindful of your budget for obvious reasons, but just be aware so that you don’t spend more than you have budgeted. There are plenty of ways to increase traffic without spending a penny! Feel free to use one, a combination of a few, or all seven strategies listed above to improve your business. Good luck!

RECENT BLOG

When to Switch Long Tail Pro