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6 Ways Automated Bidding Help Advertisers

by Marketgit Team

Growing your business takes marketing acumen. Many brands rely on effective Google ads to create brand awareness, solidify their online presence, drive traffic to their websites, generate leads, and increase sales. It won’t be easy, especially when you consider the fierce competition.

When it comes to Google ads, you will encounter the term bidding one too many times. After all, there are various bidding options to choose from. These include manual bidding, smart bidding, and automated bidding, all of which can make a massive difference in your Google ad results. Selecting the right bidding strategy can reduce your costs and make your ads more effective. If you mess up, you may end up wasting your entire budget on just a few clicks.

One of the most helpful bidding strategies for Google ads is automated bidding. To understand this a little better, let’s delve into its definition and subsequent pros and cons.

What Is an Automated Bidding?

Google defines it as a bid strategy where bids are automatically set based on your ad’s likelihood to gain clicks or conversions. Automated bidding is designed to help you achieve your business goals, whether you’re running an Amazon dropshipping store, a beauty brand, or a service-oriented enterprise. The primary purpose of automated bidding is to simplify the process as it takes the heavy lifting and guesswork out of setting bids. It allows you to conveniently meet your performance goals and succeed.

Unlike manual bidding, automated bidding does not require updating your bids for specific ad groups or keywords. Instead, your ads will automatically use bids optimized for maximum results. Google does it by analyzing data, such as the user’s device, operating system, audience demographics, and location.

It solves two critical challenges for many marketers: if their bids are high enough to complete qualified buyers and if the bids are too high while being shown to people who are not actively looking to purchase.

In short, automated bidding minimizes the risks and maximizes the gains.

How to Use Automated Bidding

One of the main advantages of automated bidding is saving time that you would typically devote to the manual setting of bid amounts for ad groups or individual keywords. Beyond its time-saving power, automated bidding can be valuable in other ways. Here are some of its benefits:

Maximize Clicks

Many businesses aim to drive traffic to their website. If you are one of them, consider an automated bidding strategy that maximizes clicks. This strategy is available in single or across multiple campaigns, ad groups, and keywords. This type of automated bidding aims to increase the number of visitors to your website. It allows you to automatically set bids that help you maximize clicks within the budget you set. 

However, remember to use this type of automated bidding only if you already have a solid conversion funnel. It doesn’t make sense to drive visits to your website if you haven’t mapped out your conversion funnel, as you will only be wasting precious time and money.

Maximize Conversions

Maximize Conversions

Of course, you will want to convert your website visitors and leads into paying customers. You can easily automate your ads to drive more conversions if you have a large budget. This automated bidding strategy will allow you to receive more conversions while spending your daily budget. It usually spends the entire allotted amount for the day.

Available in campaigns, this strategy optimizes your ads for a higher volume of conversions. In this particular automated bidding strategy, Google doesn’t factor in individual keyword bids. Instead, it chooses a CPC bid according to the goal outcome of the bidding strategy. 

Pro tip: run this strategy only if you have conversion tracking in place. Without the tracking feature, the Google algorithm might make bad decisions to find a person willing to convert.

Maximize Conversion Value

Sitting somewhere between maximize conversions and target ROAS, maximize conversion value bidding allows you to automatically adjust bids to optimize conversions based on things your business place importance on. It could be profit margin or sales revenue. If your business goal is to optimize for leads likely to generate income, this strategy is just for you. 

You need not specify a target ROI either, as the algorithm can do it for you by maximizing all your ad spend to the best of its ability. This gives you more opportunities to get the most out of your ad spend. However, it is essential to remember that some conversions may have a higher or lower return than your target.

Target Outranking Share

If you are in the brand awareness phase, you should increase the visibility of your website. The best type of automated bidding to use is the target outranking share. This particular strategy allows you to choose another advertiser’s domain that you aim to surpass in the ad position. 

You can also indicate how often you want to outrank it. Google can automatically set your search bids to help you meet this objective. Remember that this strategy is only available as a portfolio bid strategy; use it wisely.

Target Search Page Location

Do you want to appear on the first page of Google’s search results? Use the target search page location for this purpose. This strategy automatically sets bids that aim to increase your ads’ chance to appear on the first page of SERPs or in one of the top ad positions. Available as a portfolio bid strategy on the Search Network, this automated bidding strategy is your best choice if you want to rank high up the search results page.

Target Cost Per Acquisition

Choose the target cost per acquisition bidding if you want more control over your automated bidding. This strategy allows Google to automatically set search or display bids to help you receive as many conversions as possible at your selected target cost per acquisition (CPA). In this type of automated bidding, you will find that conversion costs vary. Sometimes it can be more expensive than your target.

Other times, it can cost less. Use this strategy only if you have established a CPA you can afford to acquire a customer without compromising your potential profits. Make sure to know the cost of your acquisition to avoid mistakes as target CPA bidding can be complicated.

Wrapping It Up

If you want a successful automated bidding strategy, you need to have a solid understanding of what it means and how you can best use it to your advantage. Knowing the different automated bidding strategies will help you align your Google ad strategy with your business goals. You will know when to use them and when to avoid them.

Remember to keep the balance between providing Google full reign of your budget and maximizing the power of machine learning. You need to keep in mind that putting too many guardrails in place, including placing a cap on your maximum bids, will prevent Google’s machine learning from delivering the best results for your campaigns.

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