The Ins And Outs Of Automated Bid Strategies

Sometimes, despite your best efforts and intentions, you don’t have time to manage every single little thing in your AdWords campaign. That’s where Google comes in with Automated bid strategies, flexible bidding solutions that automatically adjust paid search campaign bids to achieve a desired goal.

So how do these strategies lead to conversions? First, let’s take a bit of a closer look into…

What are Automated Bid Strategies?

Google leverages machine learning to create goal driven automated bid strategies, which allows Google to understand user behavior and shopping intent.  This in turn can help you better understand the impact that certain changes can have on your conversions, clicks, etc.

There are a few different bid strategies available in the Adwords interface: Maximize Clicks, Target Search Page Location, Target Outranking Share, Target CPA, Enhanced Cost-Per-Click (ECPC), Target ROAS, Maximize Conversions. Each strategy available pertains to a unique campaign goal, but we’ll get into that a bit more later on.

Adwords Leverages Machine Learning

Machine learning seems to be the theme for AdWords in 2017, helping advertisers achieve their business goals with data driven bid strategies. Automated bid strategies can be a time saver, but I would advise to keep an eye on performance. In addition, they’ll need at least 30 days to begin learning your campaign.

In my experience, you’ll see a consistent slump period when initially opting into a new bid strategy (see below). The longer the bidding strategy is enabled (given the campaign meets minimal performance requirements) the bid strategy will continue to increase efficiency.

Bid Strategy Types

Each of Adwords’ automated bid strategies are designed to maximize a particular campaign goal.  We’re only going to go in-depth on a couple of these, but here’s a breakdown of what they’re all for.

  • Maximize Clicks strategy will automatically  set your bids to get as many clicks possible within your campaign budget.
  • Target Search Page Location allows you to target either top of the first page results or on the first page results; top page placement is not guaranteed but this bidding strategy will increase your chances.
  • Target Outranking Share will help you outrank a particular competitor’s ad position.
  • Target CPA automatically sets search and display bids to help maximize conversions at said cost per acquisition (CPA). The actual CPA can be more or less than your pre-set target.
  • Enhanced Cost-Per-Click (ECPC) will adjust the campaign’s manual bids to get more conversions and maintain to current cost-per-conversion.  
  • Target ROAS will automatically adjust bids to help get the highest conversion value possible at your target ROAS, which is great If you rely on revenue data as a key performance indicator.  
  • Maximize Conversions strategy will adjust bids to maximize conversions within the campaigns set budget.

I haven’t had success with all of these strategies, however there are a few bid strategies that are my go-to when given the right opportunity.

When To Use Automated Bid Strategies

I mentioned this already, but it’s very important so I’ll say it again: In order for a bidding strategy to perform, the campaign requires a minimum of 30 days to begin learning how to optimize the campaign. For conversion-based strategies, campaigns need to meet a minimum number of conversions over the previous 30 days.

How to use Target CPA Bidding

Before you opt into target CPA Bidding, be sure you meet the aforementioned conversion requirements.

If you choose to set a target CPA, be realistic with your conversion cost. Setting the target CPA too low can be counter productive to your campaign. If we set the target too far from the current CPA, Google can exaggerate the bid change it needs to make, which can cause ads to be bid down too low (limiting impressions) or too high (exhausting the budget to quickly).

If your target CPA is $20, you should test a target CPA of around $40 simply to give the system space to maximize your goals. After testing a variation of target CPA’s, I’ve found that setting a target CPA higher than your goal CPA will allow the campaign more impressions and clicks which helps the system accrue data to maximize conversions within your target CPA. Automated bid strategies will progressively optimize to achieve the lowest CPA meanwhile maximize conversions.

When to use Maximize Clicks Bid Strategy

The Maximize Clicks Bidding Strategy focuses on increasing clicks across all ad groups and keywords within a campaign. You can target a specific spend or you can allow the campaign to maximize clicks until the campaign budget is exhausted.

I often use this bidding strategy for newly created shopping campaigns, which tend to start out slower during the first couple of weeks after launch date. Unlike search network campaigns which use keywords, shopping campaigns use contextual targeting, pulling data from the product feed. The Maximize Clicks Strategy helps the system expedite the learning period of which queries to show shopping ads for and when to show them.

I will typically leave the Maximize Clicks Automated Bid Strategy enabled until the shopping campaign has accrued ample performance data, or until the campaign becomes limited by budget. This could take two weeks to about a month. During this time, I keep a close eye on product level performance to make sure spend is being attributed to the most profitable items.

Another instance for which Maximize Clicks is hyper-specific search network campaigns. Let’s say you have a campaign focusing on a set of rather low-volume or specific keywords that you want to capitalize on. The Maximize Clicks Bid Strategy would help ensure your ads are competitive for those search terms every time there is a query available for them.

Lastly, I would use the Maximize Clicks Bid Strategy for campaigns targeting a more concentrated geographic location (e.g. a local campaign targeting specific cities). If your local campaign  is not reaching your desired daily spend (possibly due to impression restrictions), opting into the Maximize Clicks Bid Strategy with force the system to be more aggressive with bids and ad placement when relevant queries are available.

Don’t Give Up

The most frustrating part about Automated Bid Strategies is that they take at least a month to begin learning how to optimize your campaign given the unique goal. It can be a burden, especially if you notice performance metrics worsen from the manual bidding strategy. Theoretically you are supposed to see gradual improvements about every week after setting the strategy.

If you decide to use an automated bid strategy, keep a close eye on performance; do not just set it and forget it. Also, if you have multiple campaigns within your Adwords account, I recommend testing automated bid strategies one campaign at a time. Opting into multiple bid strategies at once might hinder your overall campaign performance due to the learning period.  

Test and Retest!

All campaigns are different. If a certain bidding strategy doesn’t work in one scenario don’t discard it if another opportunity arises. When testing setting bid, cpa, or target ROAS caps remember test a good range of limits. Setting caps more graciously will give your campaign the wiggle room it needs to achieve the proposed goal.

About Kyrsten Ilejay