What is Automated Bidding and Who Should Use It?

Editor’s Note: This is a guest post by Corey Braccialini of HubSpot. Read more about Corey in his biography at the end of the post. Happy reading! hubspot logo

The days of making an educated guess on how much to bid on your keywords and manually adjusting are behind us. With the help of machine learning, advertisers can take advantage of the wealth of knowledge that exists within the Google universe and use it to drive a stronger return on your paid ads investment. 

But let’s be honest – there are a lot of different automated bidding types to choose from. And choosing the wrong one can seriously hurt your advertising performance. Let’s explore what automated bidding is and how to use it to maximize your paid ads on Google. 

The insights included in this article are taken from HubSpot Academy’s free course on Paid Media Strategy, created in partnership with ZATO. 

Manual bidding vs. automated bidding

Before we dive into the different automated bidding types, let’s define what manual bidding and automated bidding actually is. 

Manual bidding is a bidding method that lets you set your own maximum cost-per-click (CPC) for your ads. This is the method that most of us advertisers will use when getting started with paid ads for the first time. While manual bidding can certainly be effective, as your business scales and you invest more budget into your paid advertising efforts, expanding your Google advertising strategy will demand a lot of maintenance. This is where automated bidding comes in. 

Automated bidding, on the other hand, uses machine learning to maximize results based on your campaign goals. Rather than manually selecting your maximum CPC for all of your ads, you rely on Google to adjust your bid in real-time to yield the highest return based on the goals you set. 

How to use the 6 automated bidding strategies

To be successful with automated bidding, you’ll need a solid understanding of what you want to achieve to select the right automated bidding strategy. Let’s take a look at the 6 available automated bidding strategies and discuss who should use them. 

  1. Maximize Clicks: If you care most about driving more traffic to your website, then the Maximize Clicks strategy might be for you. While this strategy is optimized for volume, it doesn’t take quality into consideration. For example, a news website could see success with this bidding strategy to drive traffic to their latest story. 
  2. Target Impression Share: This bidding strategy is all about visibility. It allocates bids to position your ad where you want it to appear, either as the first result, the second result, or elsewhere in the SERPs (search engine results pages). If you want to increase the brand awareness of your company and can do so effectively within the character restraints of your ad, then this could be an effective strategy. For example, if you’re an established financial software company and want to get more brand awareness over your competition, this bidding strategy could work for you. 
  3. Target CPA: If you prioritize driving leads for your business and have a set cost to do so, the Target CPA (cost-per-acquisition) strategy could be effective. This strategy uses machine learning to drive leads for a set target cost. For example, this strategy could work for an online retailer that already has a low CPA and is interested in building up their email list.
  4. Target ROAS: This bidding strategy adjusts your bids in an effort to yield the highest long-term value for your business. Target ROAS (return-on-ad-spend) maximizes the revenue driven from your paid ads. For example, a SaaS business can see success using this bidding strategy since purchases typically have a high price tag and are contract-based. 
  5. Maximize Conversions: If you don’t always spend your full daily budget, this strategy might be for you. The Maximize Conversions strategy will drive the greatest number of conversions and will adjust your bids accordingly. For example, this strategy could work for a nonprofit that consistently has a budget remaining at the end of the day and wants to build up its newsletter database. 
  6. Maximize Conversion Value: This bidding strategy sit somewhere between Maximize Conversions and Target ROAS. Maximize Conversion Value adjusts bids to optimize for conversions based on things that your business values most, like profit margin and sales revenue. For example, if you are a sales organization who is using ads to schedule exploratory calls, this bidding strategy can optimize for leads that are likely to generate revenue. 

Considerations when using bidding automation

There are a lot of benefits to using the different automated bidding strategies in your Google Ads campaigns. But one question you might be asking yourself is “How do I keep Google from just spending all of my daily budgets on a few high-cost keywords?”

The good news is that you are still able to cap your maximum bids. However, there is an element of trust between you and Google in order to effectively use automated bidding strategies. If you put too many guardrails in place, Google’s machine learning may not be able to deliver the best results. Be sure to keep this in mind when getting started with automated bidding to find a balance between giving Google full reigns of your budget and restricting the power of machine learning. 

If you want to learn more about how to build an effective paid media strategy, check out HubSpot Academy’s Free Paid Media Course, featuring industry experts from ZATO. 

About the Author
Corey Braccialini is a content creator at HubSpot Academy who is passionate about teaching people how to do complicated things in simple ways. Corey received an M.S. in Digital Marketing Strategy from Trinity College Dublin and is inspired by using new technologies to solve timeless problems. On the weekends, you can find Corey drinking a pint of local craft beer while thinking of ways to reduce flywheel friction.

 

Did you know: ZATO can manage just Shopping Ads for your Brand or company alongside your in-house/agency Paid Search team?  Learn more about this offering here: Google Shopping Agency.