Over the years, there have been many discussions about manual vs automated bidding. Both have their pros and cons, but if I have to pick, I’d choose manual bidding. And this is a choice made from experience. My initial approach with any account is to use manual bidding, then, gradually apply automated rules to keep things in check and help clients reach their goals. Our common theme has always been to stay as close to the advertising channel and their tools as possible to reduce clutter, inefficiency, and generally issues that could occur.

As automation becomes more and more present in PPC, it’s natural that many advertisers, especially smaller ones who need to be time-efficient, will choose this ‘set-it-and-forget-it’ approach to PPC. But before you make the switch from manual to automated bidding, you have to understand the limitation of automation and the most common mistakes people make when making the switch.

Moving to Automated Bidding Too Early

One huge mistake many advertisers make is expecting automated bidding to work from day one. But what they fail to grasp is that automation relies on machine learning. And as the name implies, for the machine to be able to take over, first it has to learn. While there’s plenty of data available from other advertisers, it’s best if you can give Google historical data about your own account. Meaning, you will need to use manual bidding (and campaign management) to generate enough data – conversions and persistent performance.

Google says that smart bidding can work if you have a minimum of 15 conversions during 30 days, but they also say that 50 conversions would be much better. If you are a large enterprise that can afford a bigger advertising budget, generating 50 conversions is easy. But, for smaller advertisers this can be a challenge. One workaround is to use micro conversion rather than macro conversions. They are easier to achieve and if your micro conversions are defined as actions closely related to macro conversions, automated bids might help you move in the right direction. And generate enough data to be able to automate your bidding.

Not Setting a Maximum CPC Limit

Another mistake advertisers make, that costs them a lot is giving Google full control over their bidding and forgetting to set a maximum CPC amount. For example, if you use the ‘maximize clicks’ bid strategy, Google will try to get you as many clicks as possible – regardless of costs. But since it is not a Smart Bidding strategy, and has no context about the quality of clicks – whether they lead to a conversion or not. Meaning, you will get expensive clicks that may be totally useless.

One way to avoid this mistake is to set a maximum CPC bidding limit. Having more control over your bids can help you avoid situations where an average CPC of $10-$30 will cost you $100 because you didn’t set a maximum bid limit. Another way to deal with exorbitant bids when moving to automated bidding is using conversion tracking to differentiate between good and bad clicks. Combining these two solutions can help you get a better conversion rate, without the extra costs. 

Getting Passive about PPC Management

Yes, a lot of business who use Google Ads have limited time available for managing their campaigns, so they choose automated bidding. But automated bidding is limited in many ways. Its purpose is to bridge the gap between CPC bids that Google uses to rank ads and the ROAS and CPA goals advertisers have. Choosing specific targeting is not part of the equation and the advertiser or account manager needs to figure it out.

While automated bidding can determine some initial settings, you still have to check and adjust your targets, as well as keywords periodically. Your targets and your keywords are a live matter and need to be vigilant and act fast. Many short-term factors influence conversion rates and sales volumes. And Google can’t always pick up instantly on your doubled conversion rate. Nor can it alert you and change your focus keyword. Getting lazy about PPC management can lead to having underperforming campaigns, all because you failed to adjust your campaigns on time.

Losing Impression Share and Page Position

Bidding on a particular keyword don’t mean your ad is showing up every time there’s a search for it. To be honest, it’s possible that your ads for the keywords you are bidding on are shown less than 10% of the time. And what is the reason for losing Impression Share? Low Ad Rank. Yes, Quality Score plays a very significant role in Ad Rank, but the fastest way to remedy low rank is to increase your bids.

When you are using automated bids you can’t just go and selectively increase bids on terms that are central to your business. Therefore, you can’t influence and increase Impression Share for those keywords. And a low Ad Rank might result in lower Page Position, which in turn means losing Impression Share and missing out on potential conversions. The fix this problem, try using Smart Campaigns or AdWords Scripts to set the right level of automation best matches your needs. That way you will use automation, but also you will have substantial amount of control over your bidding.

Is it Ever OK to Use Automatic Bidding?

Automatic bid management tools can be of great help when optimizing your PPC campaigns, especially in bigger campaigns. But just because you can automate the process, it doesn’t mean you need to give Google full control over your campaigns. First, make sure you understand the limitations of automation. Then, focus your efforts on building and managing bidding rules that are granular enough to help you reach best results while staying within budget. 

Our advice is to begin with manual bidding, especially when you are creating a new campaign or reworking an underperforming one. Once your campaigns generate enough data, bring satisfactory results, and your CPA is a number you like, you can gradually move to automatic bidding.

Published On: October 22nd, 2021 / Categories: Performance Marketing /

About the Author: Tony Adam

Tony Adam is a serial technology entrepreneur, investor, and Fractional CMO. He is currently the Founder & CEO of Visible Factors a Digital Marketing Agency providing Direct-To-Consumer (DTC) brands, startups and large organizations services around growth and online marketing principles like SEO, Google Ads, Meta Ads, and Email/Lifecycle Marketing. Prior to Visible Factors, Tony founded Eventup, an Event Venue Marketplace and grew to 12 cities and over $1MM top line revenue in under one year. Throughout his career, he has worked with early stage startups, SMBs, Fortune 500 companies and high-profile brands including Yahoo!, PayPal and Myspace.
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