If you have a Google Ad strategy, chances are you’ve been curious about automated bidding. It’s a nuanced topic in the marketing industry with varied, polarizing opinions. You might see one article that swears by the pros of automated bidding, while another highlights only the cons, so what’s the truth? When would automated bidding be beneficial versus harmful to your eCommerce business?
There’s no easy answer to these questions because it, as with all decisions in business, varies depending on your situation. But, we’re here to walk you through the pros and cons of automated bidding to help you make the best decision for your Google Ads strategy so you can move forward confidently in the New Year.
What is the Importance of Having a Google Ads Strategy?
When it comes to growing your online ecommerce business, Google Ads are the primary way to dive into the world of pay-per-click (PPC) advertising. PPC advertising is an excellent tool to use in conjunction with your other online marketing tools such as social media, email advertising, and Search Engine Optimization (SEO). The reason for having a robust Google Ads strategy is a big topic, which you can learn more about here, but some of the significant benefits include:
- PPC advertising works faster than traditional marketing methods. For example, it can take a while to grow a loyal social media following that leads to conversions. On the other hand, pay-per-click ads get your message (and your brand) in front of consumers very quickly, which can also help you keep up with your competition.
- It’s an easy way to attract new potential customers. You’re able to quickly test new audiences to see who is clicking and who is not, which can influence how you move forward in your marketing as a whole.
- There is a clear return on investment. You get a vast amount of data for each ad, so it’s easy to see which are working and which are costing you money but not converting.
When it comes to a PPC advertising strategy, you can run paid ads on just about any platform (Facebook, Bing, Amazon, etc.). However, in this article, we’re going to focus on Google Ads because it’s usually the best place to start – 81% of consumers use Google’s online search to shop for products and services, paid ads on Google get 65% of the clicks, and Google influences over two-thirds of the online search market.
What is Automated Bidding?
Creating a Google Ads strategy will require some upfront time because you’ll have to perform research to create an effective strategy. That said, you can make some of that time back by automating the bidding process once you’ve determined your goals and ad strategy.
Let’s back up for a second: What is bidding?
Bidding involves making choices about how you spend your advertising budget. For example, you might focus on the objective of generating conversions. You can then decide how much you’re willing to bid on that goal. Bidding can be either an automated or a manual process.
Manual bidding means you would go in and set individualized bids for each keyword you’ve selected as part of your strategy. This strategy gives you ultimate control.
Automated bidding streamlines the process, takes the work off your shoulders, and Google ultimately decides how much to spend. You give Google a range of what you’re willing to bid, and they’ll do the work of bidding exact amounts. The Google algorithms ensure you stay within your budget while achieving your goals.
There are six types of automated bidding:
- Maximize Clicks: The objective is to get you the most amount of clicks possible.
- Target Impression Share: This bid increases the visibility of your ads compared to your competition.
- Maximize Conversions: Your money is spent to get the most conversions possible.
- Target CPA: You can set a Cost Per Action (CPA), and the algorithm will try to get you as many conversions as possible at or below your cost.
- Target ROAS: You’ll set a Return on Ad Spend (ROAS), and Google will focus on helping you increase your return on investment on ad spending.
- Maximize Conversion Value: This automated bidding maximizes the total conversion value for your ad campaign.
You might be thinking: Automated bidding sounds great! Unfortunately, this is the default opinion because of how great Google makes it sound. After all, business owners want to trust the Google algorithm, but what you hope for and the reality in front of you isn’t always mutually exclusive. Consider the pros and cons below:
The Pros of Automated Bidding
- You can specialize your strategy based on your goals.
- It saves you valuable time that you can spend on other tasks.
- Very little prior knowledge or research is needed.
- Google algorithms optimize your budget.
The Cons of Automated Bidding
- You lose control. While it’s easier to let Google make the decisions, you also have to let them take the reins.
- You have to place your trust in Google, which ultimately has its own best interest at heart. They’re willing to make you spend a bit more to put money in their pockets.
- Google doesn’t offer a lot of information about the campaigns, which gives you little to no understanding of why specific campaigns are succeeding or failing. If you set your bids, it’s easier to pinpoint the problem and correct it.
When Should I Use Automated Bidding?
After learning the pros and cons of automated bidding in your Google Ad campaigns, it may be challenging to decide whether or not to use it for your paid advertising strategy.
If you find yourself struggling to make a decision, consider the following:
When to seriously consider automated bidding
If you lack the time, knowledge, or resources to bid on Google Ads manually, you may want to consider automated bidding. Bids should always be managed by a knowledgeable marketing professional who has the time and expertise to craft a paid advertising strategy and then follow through with its success or failure. If you’re not this person or don’t have the budget to hire someone, it’s best to use automated bidding.
When to put your focus on manual bidding
Suppose you have a powerful marketing team or a third-party marketing firm working with you, an excess amount of time and the desire to learn and study paid advertising, and/or a wealth of knowledge of paid advertising. In that case, manual bidding can be an excellent way to control the process and your data. It’s also the best way to learn from your successes and failures, so if you have the time (and the budget) to play around and potentially make some mistakes, try your hand at manual bidding.
Whether you choose manual or automated bidding, Google Ad campaigns are undoubtedly an effective way to increase sales! However, if you need more help making decisions with your Google Ad strategy, contact the team over at Ten26 Media (hint: we love the control of manual bidding because we know how to bid)!
As the Head of Ten26 Media, Jason works directly with business leaders to create digital advertising strategies that improve return on investment on Google, Facebook, LinkedIn, Instagram, and more. During his downtime, you can find him exploring Colorado with his wife and dog, hanging with friends, or playing football.