Despite your company’s success, you believe there is room for improvement. But, you are short on time and have little expertise with paid advertising.
So, you decide to use Google advertisements for pay-per-click (PPC) advertising.
And that’s a wise decision considering that, as of December 2022, Google had a market share of 84.08%, followed by Bing (Microsoft) at 9%. Therefore, Google ads may help your business reach more customers by promoting your goods or services to other internet users.
Still, do you need Google’s Automated Bidding strategy, or are you better off setting your maximum cost-per-click (CPC) manually for your ads?
We will examine the pros and cons of Google’s automated bidding strategy to help you decide if this is the right solution for your business.
What Is Google Automated Bidding?
Automated bidding employs algorithms and machine learning. These tools enable Google ads to modify bids in real time rather than manually changing bids for specific keywords or ad groups.
Depending on your chosen approach, the Google algorithm gathers information from previous performance trackers or goals. It helps maximize campaign effectiveness and efficiency.
The table below shows Google automated bidding types and their strategies.
|Automated ad type||Goal|
|Target return on ad spend (ROAS)||You place bids to maximize conversion value.|
|Maximum clicks||You boost the number of clicks on your website based on your budget. You can specify how much you are willing to pay for every click, or Google Ads will do it.|
|Target impression share||You set up your Google ad to appear at the top of Google search results.|
|Target cost-per-action (CPA)||By specifying parameters such as geographic region, and target audience, you can ensure that your Google ad receives as many bids as possible.|
|Maximize conversions||You specify the particular action you want to accomplish. Then, the Google Ads platform will automatically alter bids to assist you in fulfilling that goal.|
|Maximize conversion value||You configure your Google advertisements to focus on the areas you want to prioritize. These may include clicks, conversions, and visibility while staying within your budget.|
Pros of Google Automated Bidding Strategy
If you’re weary of spending hours each week figuring out how to optimize your Google Ads campaigns, automated bidding is for you.
Here are some of the reasons why:
- Fast and Easy to Set Up
Advertising on Google can begin immediately, without the need for hours of waiting. Additionally, it reduces labor expenses by automating your bid strategy so that it doesn’t need ongoing human oversight and control.
- Data-Driven Decisions
In pay-per-click (PPC) advertising, automated bidding uses algorithms to examine historical campaign data. The system then decides how much to bid in real-time to maximize clicks, impressions, or conversions.
Compared to manual bidding, it can improve performance, efficiency, and return on investment (ROI).
- Access to Advanced Bidding Strategies
PPC advertising automation opens the door to cutting-edge tactics like Target Cost per Acquisition (CPA) and Return on Ad Spend (ROAS). These bidding techniques let you establish precise performance objectives and tailor your campaigns to meet them.
For example, target ROAS equals a return on investment (ROI). Your Google advertising expenses reflect your earnings.
So, your ROAS plan will be more effective if your previous Google advertising successfully engages your prospects. And, automated bidding will improve marketing effectiveness and increase their return on investment.
- Increased Efficiency
If you are using shopping ads, automated bidding is effective, especially if you have a large number of items. Therefore, leveraging Google Ads in your shopping campaign will allow you to instantly change bids in reaction to changing market conditions.
- Increase Clicks and Perhaps Sales
Google’s algorithms will place your ad on the first page if you use target impression share.
For example, if you have an ad with the targeted keyword “lawn mowers,” it will appear on the first page of Google when someone searches for “lawn mowers.” Your advertisement will direct users to your website or landing page when they click on it.
Cons of Google Automated Bidding Strategy
Google’s automatic bidding method is an excellent resource for advertisers looking to save time and money. However, there are several drawbacks to be aware of before utilizing it.
- Not Cost Effective for Some Types of Ads
If you use automatic bidding for shopping adverts and only have a few items, you are better off using manual bidding. When bidding manually, you can create different bids for each product.
- Poor Return on Investment (ROI)
Before using Google automatic bidding, you should consider how you set your offers and whether your industry has enough competition to support the high bid.
It will assist you in determining whether automated bidding is a viable alternative. It will also help set realistic bids that align with your advertising objectives and budget.
- Incapable of Adapting to Market Changes
Google’s machine learning algorithms analyze past campaign data and make real-time bidding decisions based on the specific goals set for an automated bidding campaign. The algorithms consider search query, device, location, and time of day to determine the optimal bid for each auction.
It helps you achieve your goals more efficiently, as the bids are constantly adjusted based on the performance data.
So, if the performance data is incorrect, it can negatively impact the performance of campaigns.
Should You Use Google Automated Bidding?
33% of marketers use paid advertising as a marketing strategy.
But as with any marketing strategy, using Google automated bidding is a decision that depends on various factors. These factors include advertising goals, budget, target audience, and the competitive landscape of your industry.
Yet, automated bidding can maximize the return on your ad spend and improve campaign performance, but it’s not a one-size-fits-all solution.
However, use automated bidding if you have limited experience with paid search or don’t have the time and resources to monitor and adjust your bids continuously. Alternatively, opt for manual bidding if you want more control over your bids and possess an in-depth knowledge of your target audience and industry.
Ultimately, it’s crucial to continuously monitor and evaluate the performance of your campaigns, regardless of the bidding method you choose, and make adjustments as needed.
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