If you are in the world of digital marketing, no doubt you have heard terms like smart bidding, automated bidding, machine learning, + artificial intelligence a lot lately. In today’s climate of constantly changing technology, computers are getting smarter by the day. Tech giants, + Google in particular, are working hard to create algorithms that work smarter, not harder. As such, they are pushing the use of automated + smart bidding whenever possible, backing it up with claims of increased ROI. It seems like a no-brainer; give computers the tedious work of constantly adjusting bids while leaving the humans to do more creative + engaging work.
But it’s not all good news. If not implemented correctly, automated bidding can lead to big spikes in cost without much to show for it. Our team of digital advertising professionals have been testing this out, seeing what works + what doesn’t, listening to industry experts, + reading up on how to use automated bidding for our clients’ advantage. That’s why we’ve put together this list of Do’s + Don’ts to help you navigate the complex world of automation.
DO: Stay in line with overall business goals
Seems obvious, right? But oftentimes, this crucial step is overlooked. Ask yourself or your team what you are trying to accomplish with your digital advertising. If you have multiple goals, make sure you organize + prioritize them.
For example, if you are a housewares company that sells products on your website + you know you get more sales from your newsletter mailing list, you will want to set up goals for both newsletter sign-ups + purchases, but they won’t be tracked equally. Ideally, you would want to know how often your newsletter audience makes a purchase + the average purchase value from this audience. You can then assign that value to your newsletter goal. On top of that, ensure you have dynamic purchase tracking in place so you can get reports on exactly how much revenue you are generating from sales. These signals will all help the algorithm optimize for the highest value.
You can also set up goals without including them as part of the automation signals. By de-selecting the default “include in conversions” setting in Google Ads, you can still see data for the goal, but it will not be included in the data used by the system when automating bids.
DON’T: Set unrealistic goals
According to Search Engine Land: “The reality is that automation works best when you start off with targets that are similar to recent performance. From there, automation can drive incremental improvements, but they won’t typically deliver mind-blowing improvements. Mind-blowing improvements still require changes to the offer, the landing page, the price, the service level + all the other factors that make some businesses more successful than others.”
If you start a campaign off on a bidding strategy such as target cost per acquisition (target CPA) or target return on ad spend (target ROAS) + set the bar much higher than your recent results have shown, the most likely outcome will be that the system spends lots of money trying to get you those results, but it may just not be possible with the current settings.
DO: Know how each one works
No tool is useful unless you know how it works. Imagine trying to operate a complicated piece of manufacturing equipment without knowing exactly what it does or how. How would you know what to put into the machine? What are you hoping the machine produces? What happens on the inside to produce that desired result? If something goes wrong, where do you start looking to solve it? Using automated bidding is no different. Before starting any automated strategy, do the research to get a basic understanding of how it optimizes for the results you want + what you need to put into it.
DON’T: Expect magical performance changes overnight
In most cases, there is a learning period for the machine. After putting in the results you want to achieve + having the advertising pieces in place, the machine will start to deliver the ads slowly, seeing what types of users take the desired action. After gathering some data, it will then try to replicate the results for the most productive users. On the one hand, this is useful since the person managing the account doesn’t need to constantly make adjustments based on the endless array of signals like time of day, age, gender, income, purchase history, + so on. However, that loss of control for the marketer can mean that it is hard to pivot when needed.
When to Use
DO: Stable markets & products
As mentioned above, machine learning + the automated bidding strategies that it informs, use recent data history to adjust bids in real-time, hunting for the best performance from the most highly qualified audience. This is best achieved when results + markets are largely stable.
DON’T: Big sales + market disruptions
Conversely, automated bidding does NOT do well when there are major fluctuations in the market. For example, you are having a promotion, the system will likely take so long to adjust to the change that you will miss out on a good chunk of sales at the start, + it would be just as slow to adapt again after the promotion, costing you money.
Here at epower at home, we turned off much of the automated bidding we were using after the true weight of COVID-19 hit the US economy. The sudden + drastic changes to the market meant we needed to take back control of bids + budgets so we could make more granular adjustments as we all navigated the new landscape.
DO: Pick the strategy that is right for the campaign + goals
Campaigns that are run for the purpose of brand awareness are naturally not going to achieve the same results as a sales-focused campaign, so why have the same bidding strategy for each one? As you are exploring your bidding strategy options, make sure you understand what you are trying to get out of each campaign, then pick the strategy that is aligned with each goal.
DON’T: Choose “vanity goals”
There are bidding strategies that are designed to get your ads shown as often as possible or as high on the search page as possible, no matter what. Understandably, these strategies tend to catch the eye of many business owners. It seems to make sense, right? Show on top of the search page or as often as possible + you are bound to attract lots of attention. But what does that really get you? Chances are, you are going to be paying a lot for each click without knowing how valuable those clicks are. It is better to show less often for a higher quality audience than to show more often for users less likely to take action.
DO: Make sure budgets are sufficient
You want to make sure that you are getting the most out of your ads program, so you need to make sure that you are investing the right amount. If you are working with a limited budget, automated bidding strategies may not be the right choice as you will need to keep a close eye out for wasted spend, shift dollars away from those efforts + toward profitable campaigns, audiences, + segments for a more agile strategy. If your budgets are a bit larger + more flexible, it may be worth trying out some automated strategies to help you focus on bigger-picture metrics + leave the individual adjustments to the computers.
DON’T: Use budgets that restrict the ability for the system to run
For bidding strategies that are optimized for a particular cost per action, you will need to ensure you are not setting limits on your daily budgets that restrict your ads from running. For example, if you tell the system you want to pay $10 on average for a newsletter sign-up, but set your campaign’s daily budget at $6, you will experience low ad delivery since you haven’t given it enough budget to even achieve 1 sign up in a day.
Level of Attention
DO: Test it out, check in often
One highly useful feature in Google Ads is the ability to set up experiments. Experiments allow you to test out different pieces of a campaign + directly compare the results. Any time I have wanted to try out an automated bidding strategy, I test it first. I keep all of the settings the same, + change the experiment to the bidding strategy I want to test out. At the end of the experiment, I look at the results + make a decision about whether or not to keep that strategy based on the data from the experiment. If you try this, follow the do’s + don’ts in this article, making sure to account for the learning phase of the bidding strategy. If the learning phase is 2 weeks, look at data from weeks 3 + on when comparing results. Even after making the decision, it is important to check in often + make sure that it is still achieving the results you expect.
DON’T: Set it + forget it
It is easy to make the change to the campaign, then sit back, waiting to see how it has affected the results. But there have been times that I have changed to a bidding strategy that seems to be effective at first, but over time, results take a hit. Oftentimes, when looking for the root cause, it is due to a gradual increase in cost-per-click. Remember, that automated bidding is adjusting your bids for you in real-time, trying to find valuable audiences. If the audience has changed habits, if the market changes, another competitor enters the market, or any number of other factors disrupts the system, it puts your ad in more auctions at a higher cost, trying to find the right users again. It is important to keep on eye on month-over-month, quarter-over-quarter, + year-over-year changes to spot costly trends before they use up your money!
DO: Contact epower at home to set up a free consultation
This can all be overwhelming if you are not living + breathing digital marketing. If you need assistance making your marketing dollars work for you instead of the other way around, we’d love to hear from you!
DON’T: Make costly mistakes with your online advertising
Our dedicated online advertising professionals treat your money like our own. We carefully consider how each decision we make for our clients will affect their bottom line. If a strategy is not working, we not only inform our clients, we make sure to present them with solutions + alternatives. Take the next step for your business today by seeing how a results-focused strategy can help you achieve your goals.