Ok, so this is one of those questions where instead of giving you a straight yes or no answer, we’re going to go with, it’s complicated.
Whether or not you use automated bidding with your Google Ads is going to be determined by how much or little you do with your automated bidding program.
If you treat your automated bidding programs like some sort of set and forget cooking appliance, then you probably should avoid ever using it again with your Google Ads as it is likely doing you more harm than good. Whether or not you buy into a lot of lies and half-truths that are told about automated bidding will determine your success with automated bidding and whether or not you should use them.
You may find that the truth of automated bidding is a bit more than you bargained for and decide not to use them. Then again, you may find that if you use them right, the benefit outweighs the work you have to put in.
If this all sounds confusing, don’t worry we’ll break it down into a digestible format so that you can make the right decision for you.
Before we dispel some of the lies and assumptions surrounding automated bidding, we’ll break down how it works and explain some of the functions in case you’ve never used it and want a bit of a guide on how it works.
If you’re wondering whether you should use it with Google Ads or not, you may not be aware of what exactly automated bidding is and how it works.
Automated bidding is essentially a type of artificial intelligence program that uses user-defined parameters to bid on ad space within Google Ad auctions.
There are a large variety of ways that these programs can bid and the amount spent, frequency of bids, and many other factors can be customized and set so that it does all your ad bidding for you. Automation is a great way to save time and get your ads out there so that people will see them.
There are a few different strategies that you can set as well to tell the program how and when to bid on ad space that is up for auction. Depending on the parameters set, the A.I. may or may not bid if the auction does not meet the criteria.
This type of selective bidding has its own set of benefits and drawbacks.
The automated bidding program works by the user setting parameters for it to work in, and by being fed data on relevant ad space, funding requirements, performance data, and other metrics. By using all of these metrics, the program picks what ads to bid on and bids for ads based on everything it has accumulated until it runs out of applicable funds.
The most obvious benefit of this is the hands-off automation that it provides. It requires much less time to program the A.I. than it does to manually bid on ad space. The main drawback is that you have much less control over the situation.
Another benefit that isn’t as apparent is that if you’re a marketer and you’re looking to run multiple ad campaigns, automated bidding allows you to manage multiple campaigns without keeping tabs on each and every auction that comes up.
As you can see from what we’ve covered, automated bidding does indeed have its uses and downsides. Now that you have an understanding of how they work, you can understand why the answer to the question of whether you should use them or not is quite complicated.
Besides automation, marketers have begun to use automated bidding to become competitive as well as to win more auctions in general. In a lot of cases, bidding can be difficult as the more competitive a space is, the more fierce the bidding.
Bidding too low or bidding on poorly chosen ad space can result in poor advertising returns. That is a large part of the reason why marketers and advertisers prefer an automated bidding program as they can be programmed to win bids rather than bidding based on speculation or emotion.
The obvious downside to this is that they do not hold any regard for certain factors.
Certain bidding strategies prioritize winning prime ad space over other factors such as customer preferences, demographic data, ROI, and other metrics. This can be useful in some cases, but also a detriment in others.
Other strategies prioritize ROI and conversion rate over winning as many bids as possible. This allows the automated program to carefully select the bids it places to try and maximize the potential return on investment or conversion rate.
While this is a great idea, in theory, it too has its drawbacks, particularly if it fails to win enough ad space for the campaign to be seen or craft it in a way that it doesn’t convert. Balancing these factors is part of the marketer’s job unless they are going for a certain approach.
From a practical standpoint, the ability to tell your automated bidding program just what to focus on can be seen as a major benefit. As we will discuss later, these base principles aren’t all there is to it, unfortunately.
Now that we’ve covered much of the basics about automated bidding programs and how and why they’re used, we’re going to discuss some of the facts about automated bidding that will help you determine whether or not to use them in your Google Ads.
When we say this, what we mean is, automated bidding can be set for a number of factors and can certainly bid on and win ads that will get you plenty of clicks, what they don’t guarantee is that those clicks will lead to sales.
Many marketers are under the misconception that once you put an automated bidding strategy in place, all you have to do is sit back and watch the sales roll in. This is not only untrue, but it is also highly ill-advised. Not all, but some marketers assume that as long as you tell the program what you want and give it a budget, and you don’t have to review or watch a thing, it does all the work for you.
What you should be doing is setting reasonable parameters for bids and then checking your metrics to see how the ads it buys are performing. Like with the example of clicks, you can be spending money hand over fist for ad space and getting lots of clicks, but no conversions. You can liken this to running a store with only window shoppers while you still pay employees, rent, and utilities. In these cases, you are paying for valuable ad space that is not driving business the way it should.
Not only should you review your ad purchases regularly, it actually benefits the A.I. of these programs. They thrive and learn off of the input. If you feed them data that something isn’t working, they learn from that over time and adjust their bidding algorithm to try and do better. This doesn’t mean it’ll always fix the problem though so you still have to watch your bids, but it will generally improve over time.
If worse comes to worst, change your strategy and keep trying. Knowledge is power…we think.
Many marketers are under the false assumption that automated bidding programs are a sort of plug-and-go situation where you feed the program the inputs you want and it will go to work immediately to win you great bids and premium ad space.
This is one of those times where the belief could not be further from the truth. The actual truth is that automated bidding programs take weeks to get up to speed. These are learning machines after all. They have an initial learning phase that takes into account all of the information they have been fed in order to get calibrated for bidding on auctions.
The standard amount of time is roughly 2 weeks but can run longer depending on the amount of information, the strategy, and the budget. The good news about this factor is, you can essentially front-load as much information that is relevant to your ad campaign as possible to supercharge the learning of your program so that once the initial learning phase is complete, it will have a higher success rate.
This includes feeding it all your campaign data, strategy, budget, any passive audience viewing information as well as any relevant historical ad campaign data. All of this will help it learn. Many marketers do not realize that so much information can be put into the program and that it will improve performance.
A well-fed A.I. is always a good thing and with the right data, you can see excellent results. Just don’t expect it to happen overnight.
This is something that even popular brands and expert marketers get wrong all the time and have no idea why until they study up on it. Most people think that “smart bidding” is the same as automated bidding. This is one of those yes, but no, statements.
So, let us break it down for you. There are many different types of automated bidding. Out of those many types, smart bidding is one of them. The reason for the distinction is that marketers incorrectly assume that all automated bidding is smart bidding. That is wrong. Smart bidding is considered a sub-group within all of the automated bidding types. Once you know this difference, you can use smart bidding more appropriately.
Smart bidding focuses on fixed conversion-related bidding tasks such as click targets, ROAS targets, maximum conversion rates, and cost per click. Using these you can develop specific strategies and very targeted bidding that can win you ad auctions with specific results.
This type of bidding has to be used with caution though as these types of strategies will usually tell the program to ignore other data such as cost per bid, user demographics, and other customer-oriented data.
If used properly and strategically, there are a lot of benefits and loads of profit to be made, just don’t go assuming that smart bidding is all there is or that automated bidding is all smart bidding.
Just because you set an advertising budget and programmed your automated bidder doesn’t mean that everything goes as planned and you no longer have to account for individual bids.
Without the right parameters, your artificially intelligent friend can bid on very expensive ad space and quickly eat through your ad budget without you even noticing it. Within a few individual bids, you can go from a full balance to a zero balance for your ad budget.
If you see that your cost per click on some ads is too high, you can retarget and get better pricing or if you think you need the better ad space, increase your budget to cover the better ads. In either case, you should be sure to watch your spending or you’ll soon be out of budget and short of customers.
There’s plenty of customization that can be done with automated bidding programs that tell it only to bid on certain spots that have a guaranteed conversion rate or relative ROAS but using these strategies effectively means feeding in lots of data and letting the A.I. go through a learning phase each time you change strategies. This is a good idea if you’re trying to rebalance your marketing to achieve better results.
The important point to remember though is that if you focus on high ROAS or CPC values, your returns may not be as good if you can’t feed your bidding machine enough data to act properly. In that case, it may not bid enough to win needed ad space because it is being too selective.
Some folks are under the mistaken belief that you either MUST use automated bidding or never use it at all. The truth is, neither is correct. With the right preparation and work, automated bidding is a fantastic asset that can take a lot of the work and speculation out of bidding on ad space.
That being said, there are times when automated bidding just won’t work as well as doing things manually. Small budget campaigns, for instance, don’t typically fair as well. Additionally, overly difficult strategies don’t work as well without lots of time and input into the automated bidding system.
If you have the time to invest, automated bidding can be your best friend in marketing. If not, then you may be better off using the manual method and being your own judge. Don’t let skepticism sway you one way or another. Choose the option that works best for the situation you’re in. You may choose to automate some campaigns and not others, even ones running concurrently. The trick is finding what works.
That’s it. All the big secrets and lies about automated bidding you need to know to decide whether it’s right for your Google Ads campaign. Hopefully, we’ve given you all the info and tips you need to make the most educated decision possible for whatever it is you’re trying to accomplish.
If we can say one thing, don’t believe all the hype you read on either side and strive to find out the facts yourself.