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 google’s automated bidding Strategies will determine your success with automated bidding Strategies and whether or not you should use them.
You may find that the truth of automated bidding Strategies 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 strategies, 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 Google 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 or smart 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 Google ads to bid on, how much to bid for ads and bids for Google 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 automated bidding strategies 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 strategies 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 PPC automation, marketers have begun to use automated bidding strategies 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 inform future 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 bid 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 maximize the 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 strategies 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 Google 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 Google ads it buys are performing. Like with the example of clicks, you can be ad spend money hand over fist for ad space and get lots of clicks, but no maximize conversion. 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 automated bidding strategy 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 strategy. Out of those many types, smart bidding strategies is one of them. The reason for the distinction is that marketers incorrectly assume that all automated bidding is smart bidding strategies. 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, maximize conversion rates, and cost per click. Using these you can develop specific bid 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 bid 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 strategy 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 Google 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 ad spend 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 bid 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 and AI can be great tools 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 bid strategies 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 bid strategies 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.
%201.svg){kind=logo}
When this apartment complex client partnered with PPC.co, their goal was clear: generate more qualified leads through Google Ads. In just 60 days—from January to March 2025—we transformed their paid acquisition performance. Total conversions more than tripled, jumping from 10 to 32, while the overall conversion rate soared by over 300%. At the same time, we drove down the cost per conversion by 44%, delivering significantly more leads at a much lower cost.
By strategically combining Performance Max and high-intent Search campaigns, we not only increased lead volume but improved overall efficiency and ROI. This rapid and measurable improvement underscores the value of data-driven optimization and expert campaign management.
This case study is a testament to what can happen when a well-structured campaign meets expert strategy and continuous optimization. Whether you're launching a new property or looking to boost occupancy in a competitive market, PPC.co delivers real results—fast.
Ready to grow your leads and lower your cost per conversion?
Contact us today to schedule a free audit and discover how we can help you achieve similar results.
Click on the following link if you would like to see more PPC case studies!
If you’re running an e-commerce or retail business, you already know that visibility is everything. The best product in the world won’t sell if no one sees it. That’s where paid ads for ecommerce comes in.
Done right, they drive traffic, conversions, and repeat customers.
Done wrong, they drain your budget and leave you wondering what went wrong.
Whether you’re spending $500 a month or $50,000, your goal is the same: profitability. Not just clicks, and certainly not just impressions. You want to turn ad dollars into real, predictable revenue.
So how do top-performing e-commerce and retail brands make their paid ads work?
What are they doing that you’re not?
This guide breaks it down step-by-step, so you can start running profitable ads with confidence.
Before you launch a single campaign, you need clarity on your audience and goals. Are you trying to boost first-time sales? Increase average order value? Each objective requires a different strategy and metrics for success.
Don’t fall into the trap of launching ads just to “see what happens.” Paid media works best when it’s part of a bigger strategy. So before you log in to Google Ads or Meta Ads Manager, get specific about what success looks like.
If you want to run profitable paid ads, knowing your numbers is the foundation of your entire strategy. Without a clear understanding of your margins, break-even points, and how much you can afford to spend to acquire a customer, you’re essentially gambling with your ad budget.
And in e-commerce, that can get expensive fast.
Let’s start with the most critical numbers you need to know:
Your break-even ROAS tells you the minimum return you need on your ad spend to not lose money. It’s calculated by dividing 1 by your gross profit margin.
So if your margin is 50 percent, your break-even ROAS is 2.0. That means for every $1 you spend on ads, you need to make $2 in sales just to break even.
For example, let’s say you’re running Facebook Ads and spending $1,000 on a campaign. If your break-even ROAS is 2.0, you need to generate at least $2,000 in revenue to avoid losing money. Anything above that is profit. Anything below that eats into your cash.
Once you know your numbers, you can reverse-engineer your ad strategy instead of throwing money into the void and hoping for results. For instance, if your AOV is low (say $25), you might struggle to profit from ads unless you have a very low COGS or high conversion rates. In that case, you might want to:
On the other hand, if your AOV is $150 and your margins are strong, you have more room to compete in ad auctions, bid more aggressively, and test multiple audiences and creatives without instantly wiping out your profit.
A lot of beginner advertisers focus entirely on immediate return from ads. That’s understandable – but short-sighted. If you’re breaking even or slightly losing on the first sale, that might still be a smart move if you’re building long-term customer relationships.
That’s where Customer Lifetime Value (LTV) comes in. If you know that your average customer places three orders a year, each worth $60, then their LTV is $180. If you spend $40 to acquire that customer with your first ad, but earn $140 more over the next 12 months, that ad was extremely profitable in the long run.
Top e-commerce brands build their paid strategies around LTV-to-CAC ratio – how much they earn over time compared to what they paid to acquire the customer.
A healthy ratio is usually 3:1 or higher. So if you’re spending $50 to acquire a customer, you want to earn at least $150 from that customer over time.
Once you understand your numbers, you can plan your ad spend with precision. You’ll know exactly:
Let’s say you want to make $5,000 in profit this month, and your product has a 50 percent gross margin. That means you need $10,000 in sales. If your target ROAS is 2.5, you can spend up to $4,000 in ad spend to hit that goal. With those numbers in hand, you now have a roadmap for campaign budgeting, not just a shot in the dark.
Every ad platform has strengths. But if you try to use them all at once, you’ll burn through your budget without learning much. Instead, pick one or two that align best with your business model and customer behavior.
If you’re selling visually appealing products like apparel, skincare, or home goods, platforms like Instagram and TikTok can deliver strong returns – especially with the right creative. If you’re focused on high-intent buyers, Google Search and Shopping Ads are goldmines. And if you’re targeting professionals or B2B retail buyers, LinkedIn may offer surprising results.
Test channels strategically. Start with the one that matches where your customers spend their time and scale from there. The best platform for you is the one where your ideal customers are already shopping, scrolling, or searching.
One of the biggest mistakes retailers make is casting too wide a net. You don’t want everyone to see your ad – you want the right people to see it.
On Google, this means targeting high-intent keywords that signal buying behavior. Focus on terms like “buy,” “best,” “free shipping,” or product-specific searches. On Facebook, Instagram, or TikTok, you’ll want to dial in your custom audiences using demographic data, lookalikes, interests, and behavior.
Don’t forget retargeting. Most people won’t buy the first time they visit your site, but retargeting brings them back when they’re ready. Set up ads that follow people who viewed a product, added to cart, or engaged with your brand but didn’t check out.
The more relevant your targeting, the more efficient your spend and the higher your return.
Creative is the make-or-break factor in most e-commerce ad campaigns. You can have perfect targeting and the right product, but if your ad doesn’t grab attention in the first two seconds, it won’t convert.
Your creative needs to do three things quickly:
Use high-quality product photos or videos. Show your product in action. Highlight a clear benefit or solve a specific problem. Incorporate customer reviews or user-generated content to build trust.
For paid social, test multiple creatives at once – video vs. image, UGC vs. branded, short-form vs. long-form – and let performance data guide your iterations. On search platforms like Google, focus on copy that’s compelling and packed with relevant keywords. Test different headlines and descriptions to see what gets the best click-through rate.
Sending paid traffic to your homepage is a rookie mistake. You want every click to land on a page that’s designed to convert. That means fast load times, mobile optimization, and a clear call-to-action.
If you’re promoting a specific product, send users to that product page and not your full catalog. If you’re offering a bundle or a seasonal deal, create a dedicated landing page with copy, visuals, and layout tailored to that offer.
Remove distractions. Reduce friction. Make it stupid-easy for people to buy. The less effort it takes, the more sales you’ll see. And don’t forget to A/B test. Sometimes a simple tweak to your headline or CTA can double your conversion rate overnight.
Once your ads are live, your job isn’t done. In fact, this is where it really begins. You need to monitor performance regularly, looking at more than just the surface-level metrics.
Click-through rate (CTR) tells you how well your ad is capturing attention. Conversion rate shows how well your landing page is sealing the deal. ROAS tells you how profitable your campaign is. And CPA helps you compare efficiency across different products or audiences.
Watch for early indicators of success – or failure.
Treat your campaigns like living systems. Tweak, test, and improve them continuously.
Once you find a winning combination – an ad, offer, and audience that works – it’s time to scale. Increase your budget gradually while keeping an eye on performance. Scaling too fast can tank your results, so go step by step.
Duplicate high-performing campaigns to test new audiences or creatives. Experiment with upsells, bundles, or time-limited offers to increase AOV. Layer in email or SMS marketing to retarget paid traffic and drive repeat sales.
And just as importantly, don’t be afraid to kill underperforming ads. If something isn’t working after a reasonable test period, cut it. Your budget should be flowing to what works – not what you hope will work.
One of the biggest mistakes in paid advertising is chasing one-off sales without thinking about the bigger picture. Winning e-commerce brands think in terms of customer lifetime value.
If your first sale breaks even, that’s fine. (As long as you have a plan to turn that customer into a repeat buyer. ) You can use post-purchase emails, loyalty programs, and retargeting ads to bring people back.
At the end of the day, when you view paid ads as the beginning of a customer relationship – not the end – you unlock real long-term profitability. And at PPC.co, that’s where we want to help you! We offer industry-leading PPC management services for ecommerce and retail brands who want to stop wasting ad spend and start generating real ROI.
Contact us today to learn more!
