Automated Bidding in Google Ads – Pros and Cons

As Google Ads continues to evolve, advertisers are increasingly presented with automated features that come with both excitement and scepticism. One such feature is automated bidding in Google Ads, which has improved over time but can still be overwhelming. With various types of automated bidding strategies available, it’s important to understand the advantages and disadvantages of each. So, should you embrace automated bidding, and if so, which strategy should you choose? Let’s delve into the details and explore the options.

What is Automated Bidding in Google Ads?

Automated bidding refers to the process of using technology and algorithms to set bids for online marketing campaigns. It takes into account various factors, such as performance metrics, auction dynamics, and user journey complexities, to determine the optimal bid for each auction. Automated bidding eliminates the need for manual bid adjustments, saving time and improving bid accuracy.

Google Ads offers a range of automated bidding strategies that are tailored to different marketing goals and campaign types. By leveraging machine learning, automated bidding algorithms analyse data and signals in real-time to make data-driven bidding decisions. This allows advertisers to reach the right audience, with the right message, at the right time.

The primary goal of automated bidding is to optimise campaign performance by maximising the desired outcomes, such as conversions, clicks, or conversion value, while staying within the advertiser’s specified budget constraints.

Automated Bidding or Smart Bidding?

While Smart Bidding falls under the umbrella of automated bidding, the two terms are not identical. Smart Bidding specifically refers to Google’s automated bidding strategies that incorporate “auction-time bidding.” These strategies optimise bids for conversions or conversion value in every auction.

Smart Bidding strategies leverage advanced algorithms and machine learning to adjust bids in real-time based on the specific context of each auction. They aim to maximise the desired outcomes, whether it’s conversions, conversion value, or achieving a target CPA or ROAS.

It’s important to note that while all Smart Bidding strategies are automated, not all automated bidding strategies fall under the Smart Bidding category. Automated bidding, as a broader term, encompasses various bidding strategies that use automation to set bids, but they may not necessarily incorporate auction-time bidding or the same level of optimisation as Smart Bidding strategies.

Pros and Cons of each Automated Bidding Strategy in Google Ads:

Let’s explore the advantages and disadvantages of each automated bidding strategy available in Google.

Enhanced CPC (ECPC)

Enhanced CPC (ECPC) is a type of automated bidding strategy in Google Ads that allows manual bids with automated adjustments for individual auctions based on the likelihood of conversions. For example, if a certain keyword has historically shown a higher likelihood of conversion, ECPC will automatically increase the bid for that keyword in real-time. It combines manual control with automated bid adjustments to optimise performance. There are two types of ECPC:

1. Standard Enhanced CPC: In this type, ECPC adjusts bids for individual auctions based on the likelihood of conversions. It increases bids for auctions where a conversion is more likely to occur and decreases bids for auctions with a lower likelihood of conversion.
2. ECPC with Conversion Value: This type of ECPC not only considers the likelihood of conversions but also takes into account the value of conversions. It adjusts bids to maximise both the number of conversions and the total conversion value.

Pros:

• Prospects: Balances manual control and automation.
• Conversion Focus: Adjusts bids based on conversion likelihood, potentially improving ad performance.

Cons:

• Potential Overspending: Requires regular monitoring to prevent potential overspending if automated adjustments lead to higher-than-expected bids.

Maximise Clicks

Maximise Clicks is an automated bidding strategy in Google Ads that focuses on generating as many clicks as possible within your specified budget. The goal is to drive maximum traffic to your website or landing page. For example, if there is budget remaining, Maximise Clicks will bid more aggressively to increase the number of clicks.

Pros:

• Traffic Generation: This strategy is ideal for campaigns focused on increasing website traffic, brand visibility, or audience reach. It helps businesses generate more clicks, increase website visits, and potentially improve overall ad performance.
• Brand Visibility: Increases exposure and brand awareness.

Cons:

• Conversion Considerations: While Maximise Clicks is primarily focused on driving clicks, it may not prioritise conversions. It’s important to closely monitor conversion metrics and assess the impact on your conversion rates and overall campaign goals.
• Cost Efficiency: While it aims to maximise clicks, it may not optimise for cost efficiency. Higher click volume doesn’t guarantee better conversion rates or return on investment. It’s essential to track and analyse key metrics like cost per conversion and return on ad spend to assess the effectiveness of this strategy.

Maximise Conversions

Maximise Conversions is an automated bidding strategy in Google Ads that focuses on maximising the number of conversions within your specified daily budget. The goal is to drive as many valuable conversions as possible. For example: Maximise Conversions will automatically adjust bids to increase the chances of obtaining more conversions.

Pros:

• Conversion Maximisation: The strategy is designed to prioritise conversions over other metrics like clicks or impressions. It aims to deliver the highest possible number of conversions within your budget constraints.
• Performance Optimisation: Maximise Conversions uses advanced machine learning algorithms to analyse various signals, including user behaviour, device type, demographics, and more. These signals help determine the likelihood of conversion and adjust bids accordingly.

Cons:

• Cost Management: While this bidding strategy aims to maximise the number of conversions, it may not optimise for cost efficiency. The strategy focuses on generating conversions rather than achieving a specific cost per conversion. Keep an eye on your cost metrics to ensure profitability.
• Limited Budget Control: Requires careful monitoring to prevent overspending without achieving the desired return on investment.

Maximise Conversion Value

Maximise Conversion Value is an automated bidding strategy in Google Ads that focuses on maximising the total value of conversions rather than just the number of conversions. The goal is to drive the most valuable conversions within your specified budget. For example: This bidding strategy will allocate higher bids to keywords that historically lead to higher-value conversions.

Pros:

• Value Maximisation: The strategy aims to prioritise higher-value conversions over lower-value ones. It considers factors such as conversion value, revenue, or other defined value metrics to maximise the total conversion value.
• Advanced Optimisation: It uses advanced machine learning algorithms to analyse various signals and historical data to determine the conversion value potential of each auction. Bids are adjusted to capture opportunities that can drive higher revenue.

Cons:

• Budget Monitoring: Requires regular monitoring to prevent overspending without achieving the desired return on ad spend.
• Conversion Value Accuracy: Relies on accurate tracking and measurement of conversion values for optimal performance.

Target CPA (Cost Per Action):

Target CPA is an automated bidding strategy in Google Ads that focuses on achieving a specific target cost per action. The goal is to optimise bids to drive conversions at the desired cost efficiency. For example: If the target CPA is set at $10, Target CPA will adjust bids to acquire conversions at or below that cost.

Pros:

• Cost Control: The strategy focuses on cost efficiency by aiming to generate conversions at the desired cost per action. It helps control your advertising costs while maximising the number of conversions.
• Conversion Optimisation: Automatically adjusts bids to meet the target CPA efficiently.

Cons:

• Conversion Data Dependence: Target CPA relies on having sufficient conversion data for effective optimisation. If your campaign has limited conversion data, the bidding algorithm may not have enough information to make accurate bid adjustments.
• Potential Volume Limitation: Setting the target CPA too low may limit campaign volume and reach.

Target ROAS (Return on Ad Spend)

Target ROAS is an automated bidding strategy in Google Ads that focuses on achieving a specific target return on ad spend. The goal is to optimise bids to maximise the return on your advertising investment. Example: If the target ROAS is set at 300%, Target ROAS will adjust bids to maximise revenue based on the desired return.

Pros:

• Revenue Optimisation: The strategy focuses on revenue generation by aiming to maximise the return on your ad spend. It helps allocate your budget more effectively by bidding higher for keywords or audiences that have a higher potential for generating revenue.
• Value-Driven Optimisation: Considers both conversion value and cost to maximise overall return.

Cons:

• Conversion Value Tracking: Accurate conversion tracking with assigned values is crucial for the success of Target ROAS. Ensure that proper conversion tracking is implemented and assign values to each conversion to guide bid optimisation based on revenue potential.
• Revenue Predictability: Target ROAS performs best when there is a predictable relationship between the ad spend and the revenue generated. If your campaign experiences fluctuations in revenue or has inconsistent conversion values, it may impact the effectiveness of the strategy.

Target Impression Share

Target Impression Share is an automated bidding strategy in Google Ads that focuses on increasing the visibility of your ads by targeting a specific impression share. The goal is to ensure your ads are seen at the top of the page or anywhere on the page to maximise exposure.

Pros:

• Increased Visibility: Achieve higher ad visibility and exposure.
• Time Savings: Automation eliminates manual bid adjustments.
• Real-Time Optimisation: Bids are dynamically adjusted based on market conditions.
• Ad Positioning: Improve average ad position for better click-through rates.
• Competitive Advantage: Compete effectively for ad placements.

Cons:

• Increased Costs: Higher impression share targets may result in higher ad spend.
• Limited Control: Less control over individual bid adjustments.
• Performance Trade-offs: Impression share doesn’t guarantee high conversions.
• Competitive Landscape: Effectiveness can vary based on industry competition.
• Budget Considerations: Ensure sufficient budget allocation for higher impression share.

Viewable Cost Per Thousand Impressions (vCPM)

Viewable Cost Per Thousand Impressions (vCPM) is an automated bidding strategy in Google Ads that focuses on increasing the visibility and viewability of your ads. Instead of paying for clicks or conversions, vCPM optimises bids to maximise the number of viewable impressions your ads receive.

Pros:

• Improved Brand Visibility: vCPM focuses on increasing viewable impressions, helping to enhance brand visibility and exposure.
• Pay for Viewability: You are charged based on the number of viewable impressions, ensuring that you’re paying for actual ad visibility rather than clicks or conversions.
• Targeted Campaigns: vCPM is suitable for brand awareness campaigns or situations where increasing ad visibility is a priority.
• Automated Optimisation: The bidding strategy automatically adjusts bids to maximise the number of viewable impressions, saving time and effort on manual bid adjustments.

Cons:

• Limited Performance Metrics: Since vCPM focuses on viewable impressions rather than clicks or conversions, it may not provide direct visibility into performance metrics such as click-through rates or conversions.
• Viewability Standards: Viewability measurement may vary depending on factors such as ad format and platform. It’s important to understand the viewability standards and requirements for different ad types.
• Cost Considerations: While vCPM can increase ad visibility, it may result in higher costs, especially if your ads receive a large number of viewable impressions. Monitor your budget and cost efficiency carefully.

Cost Per View (CPV)

Cost Per View (CPV) is an automated bidding strategy in Google Ads that focuses on video advertising campaigns. With CPV, you pay for video views or interactions with your video ads, such as clicks on call-to-action overlays, cards, or companion banners.

Pros:

• Engagement and Reach: CPV bidding helps you engage with your target audience by focusing on video views. It allows you to increase brand exposure and reach users who are more likely to be interested in your video content.
• Pay for Engagement: With CPV, you only pay when users actively engage with your video ads by watching a certain duration or interacting with the ad elements. This ensures that you’re investing your budget in interested viewers.
• Targeted Campaigns: CPV allows you to target specific audiences and demographics, helping you reach the right viewers who are more likely to engage with your video content.
• Video Performance Metrics: CPV bidding provides valuable metrics related to video views and interactions, allowing you to measure the success of your video campaigns based on user engagement.

Cons:

• Limited Performance Insights: CPV bidding may not provide detailed insights into performance metrics beyond video views and interactions. If other metrics like conversions or click-through rates are crucial to your campaign goals, additional tracking and analysis may be required.
• Ad Production Quality: Since CPV focuses on video views, the quality and appeal of your video content play a significant role in capturing viewers’ attention and driving engagement. High-quality, compelling videos are essential for success.
• Cost Considerations: While CPV can help increase video views and engagement, it’s important to monitor your costs and ensure that the CPV rates align with your budget and return on investment (ROI) goals.

Final thoughts

Automated bidding strategies in Google Ads offer a range of options to optimise your campaigns based on specific goals. While manual bidding provides control and access to detailed metrics, automated bidding can save time and leverage additional data points for optimisation. Understanding the advantages and disadvantages of each strategy is crucial in determining the best approach for your advertising goals. Remember to regularly monitor performance metrics and make adjustments as necessary to ensure optimal results. Embracing the power of automated bidding can unlock new possibilities and help you maximise the effectiveness of your Google Ads campaigns.

At Netzoll, we understand that choosing the right bidding strategy for your business can be a daunting task. That’s why we take the time to deeply understand your unique needs, industry, and goals. Our approach is rooted in building strong and enduring relationships with our clients, allowing us to develop customized strategies that align with your specific requirements. We are here to provide expert advice, transparent communication, and the highest standards of professionalism.

Contact us today to discover how we can help you achieve success, drive conversions, and unlock the full potential of your online presence.