Over the past ~5 years Google has introduced a number of new automated bid strategies to help manage keyword bids and even other settings. Gone are the days of having to manually adjust every single element of the campaign. By choosing the right machine learning bid strategy you can make the campaign even more efficient thus freeing up your time to optimise other elements like campaign architecture, text ads, further settings and even user experience. But it’s not always easy choosing the right bid strategy and choosing the wrong one can be costly for your campaign. So let’s have a look at the pro’s and con’s of each of these.
Enhanced CPC – One of the earliest launched bid automated strategies, this is a ‘light’ version of automated bidding allowing Google’s AI to bid up and down on keywords according to conversions and cost per conversion. While this does work, don’t expect miracles as the automation doesn’t go quite hard enough we find.
Maximise Conversions – A popular strategy with Search Rescue, this strategy aims to procure the most conversions with the budget at hand. Generally speaking we find this strategy suits most of our clients the most. One thing to watch here is that maximise conversions doesn’t mind a high cost per click so long as the conversion is there so be careful here if you are in high CPC verticals like plumbing, legal, finance, insurance etc. In these instances you may want to choose maximise clicks with a bid cap.
Maximise Clicks – With this strategy the AI is chasing as many clicks as possible with the budget. This generally works really well if the cost per click from maximise conversions is too high. However, given that this strategy isn’t chasing conversions, make sure your search term report is clean of wastage because if there are very cheap keywords available which perhaps aren’t ideal for you then you may incur broad match wastage search terms here. An additional note on ‘max clicks’ is to use a bid cap if your vertical has high CPC. That way you can keep an even tighter lid on the amount you pay per click.
Target CPA [cost per acquisition] – Arguably the ‘trickiest’ of the non-eCommerce bid strategies, target CPA allows you to ‘request’ your cost per lead. Eg you’re happy to incur clicks only if the resulting cost per lead suits your preset amount. So on a CPA Target of $20, if a certain keyword is likely to bring you leads at ~$30, that keyword won’t be served. Therefore be careful with this strategy because if the CPA target is set too low, spend can be throttled. Alternatively if it is set too high then you aren’t fully utilising this strategy at its most efficient. We recommend running your CPA target at ~30% above actual CPA [cost / conversion] if you want to maintain great efficiency but not jeopardise your spend and lead volume. Furthermore don’t change the CPA target too often as it sends the campaign into a ~week long adjustment phase where results can suffer.
eCommerce bid strategies :
While the above strategy are based on signals from conversions, Google also offers automated bid strategies based on revenue [known as “conversion value” in Google Ads]. Let’s explore these.
Maximise conversion value – similar to maximise conversions this strategy is purely chasing as much revenue as possible. Again it can result in a high cost per click but overall it is our favourite for eCommerce campaigns for eCommerce performance.
Target ROAS – Similar to target CPA, when you are chasing revenue but will only accept that purchase at an acceptable ‘advertising profit margin’ you should use Target ROAS. Eg if you only want to spend on clicks such that you will get $4 of revenue from $1 of ad spend then you set the ROAS target to 400%. Again, be wary of throttled spend when you demand a high ROAS – Google will likely deliver that ROAS but only on a select few keywords / Google Shopping products that will deliver you that ROAS. And again, don’t adjust the ROAS target often unless you are patient enough to wait for the inevitable inefficient learning phase to lapse.
A further note is that not all campaigns offer all of the above bid strategies. Particularly smart campaigns.
In summary Google’s automated bid strategies are extremely powerful but only if the right one is chosen in line with your business needs and only if monitored correctly. Auto pilot is a great thing but you always need a captain nearby! For any more questions about Google’s automated bid strategies give us a call on +61 435 639 299.