Automatic Bid Strategies

Automatic Bid Strategies Contextual advertising

Contextual advertising systems are increasingly using machine learning algorithms, preparing us for the fact that soon the main task of a specialist will not be manual tracking of bids, but the determination of the most effective promotion strategies.

Automatic Bid Strategies is a feature that allows you to keep your bids at the desired level in an ever-changing trading environment without wasting time. The main difference between this tool and manual control is that the system does everything for you according to its own algorithm.

How does Google’s automated strategies work?

Google Ads automatic strategies save advertiser resources. You just need to set goals, after which the algorithm will independently begin to manage the campaign, adjust bids and select target audience to achieve the required KPI.

Important! The system is able to take into account such a volume of information that no contextologist can handle.

Some do not trust automation, considering it inefficient. Most likely, the advertisers’ negative attitude towards the tool is caused by not quite logical results during the system training period. After all, the service needs time to collect statistical information and adapt.

At the end of the training period, the algorithm is able to accurately determine your audience and knows when it is more appropriate to show your ad to them. To fulfill KPI, the system takes into account all possible criteria right in the bidding process and instantly optimizes rates.

It turns out that you have to waste time and money on training artificial intelligence? Not at all. Professionals recommend turning on the manual management mode for new campaigns, and after a sufficient amount of statistical data has been accumulated, switch to automatic strategies. The algorithm will still adapt for some time. But it will happen much faster.

Advice! During this period, you should not change the settings of the RK, otherwise the system will be forced to start the learning process from scratch.

When do auto-bid strategies fail?

Auto-bidding strategies work correctly if the algorithm has enough information to make an adequate decision. If you doubt that you can ensure the collection of the required amount of data, then most likely auto strategies will not be able to please you with a good result.

Let’s consider examples of such situations:

  • A seasonal offer that can only be used during the month. It can be, for example, New Year’s accessories or Halloween decorations. The system simply won’t have time to learn how to manage bids correctly.
  • Exclusive or expensive product. Decisions to purchase, for example, highly specialized equipment take a long time. It is rarely bought, so it will not be possible to collect enough data.
  • Not all information is available to the system. When you measure lead quality using your internal CRM, it gives more power to the analyst, but Google doesn’t have access to that data.

The smart strategies tool is suitable for large and medium-sized companies that sell goods and services that are in regular demand among a fairly wide audience. For any other business, individual analysis is required. Probably, manual control mode will show the best result.

What automated bidding strategies does Google Ads offer?

  1. Target CPA. The system provides the largest number of targeted actions, while the cost of a lead does not exceed a fixed level. To launch the strategy, you need to set goals in the Analytics service. The strategy is used to achieve a given ROI when it is necessary to fix the cost of the desired action in parallel.
  2. Targeted return on ad spend. It works similarly to the previous strategy, while the conversion value for each search query remains floating. It is used when the semantics contains queries with significantly different competition, and allows you to keep the overall profitability of the RK at a given level.
  3. Target impression share. The algorithm helps to make the site more visible by placing the ad as high as possible on the Google search results page in accordance with the budget limits. It is used when there is a small number of competitors or the need to “beat” one or two of the most significant participants.
  4. Maximum conversions. The algorithm is designed to get the largest number of leads, while their price does not matter. Only the total budget of the Republic of Kazakhstan is limited. Used to promote a product during the high season, when the main goal is to get the most leads in a limited amount of time.
  5. Target CPM in the visible portion of the screen. Based on the Active View methodology, the algorithm adjusts bids so that ads are displayed in blocks that are most likely to be seen by a potential client without scrolling the screen.
  6. Maximum conversion value. The system, within a limited budget, provides leads that are most likely to reach the moment of closing the deal. It is used if it is important for the advertiser to attract the hottest audience ready to buy here and now.
  7. The maximum number of clicks. Suitable for those who want to increase the number of site visits by spending a fixed amount of money on this. The strategy is usually chosen by information resources.

You can select almost any type of automatic Google Ads bidding strategy for multiple search queries, ad groups, or campaigns at once. Go to the shared library to see the strategies created in batch mode. From here you can also edit and view the current settings.

How to set up automatic strategies in Google Ads?

The choice of an automated strategy is carried out through the “Bids” module in your AdWords account:

Google Ads auto-bidding strategies

The following options are available for search ads:

  • Target impression share.
  • Maximum conversions.
  • Target cost per conversion.
  • Maximum conversion value.
  • Target ROAS
  • Maximum number of clicks.

For CCM, any of the listed smart strategies is relevant, with the exception of the first one in the list. Instead, the option “Cost per 1000 impressions in the visible area of the screen” is available. The same auto-strategy works for the video format as well. In addition to the already mentioned “Maximum conversions” and “Target CPA” for videos, you can choose the following options:

  • Max CPM.
  • Target CPM.
  • Maximum cost per view.

Tips for setting up auto strategies

Setting up auto strategies in AdWords

The use of artificial intelligence does not guarantee a perfect result. But the following guidelines will help you reduce the chance of error and get the best effect from using Google Ads auto strategies:

  1. It is mandatory to connect analytics to your AdWords account. If you additionally ensure the integration of the advertising account with your CRM system, then the algorithm will be able to build a clear relationship between effective leads, ads, search queries and other parameters, which will allow you to make reasoned decisions about adjusting the advertising campaign and turning off ineffective channels.
  2. Don’t jump to conclusions. Only after collecting a sufficient amount of statistical data on transitions and leads, it becomes appropriate to evaluate the use of auto strategies. Start the optimization procedure in advance or manage bids manually at the initial stage. This will help to minimize the training time of the algorithm.
  3. Use an adequate budget. According to the opinion of professionals, the amount allocated for advertising should not be less than ten times the cost of the target action. And here it is important to understand what type of conversion corresponds to the limits. With a small budget, it is more profitable to focus on micro conversions, the chances of which to become a lead exceed 50%. In this situation, the funds allocated for the day will be enough for a significantly larger number of requests than when choosing the application as the ultimate goal in CRM.
  4. Define target values. Even before the launch of an advertising campaign, at the planning stage, the profitability and cost of a lead should be calculated. This will help in the future to develop hypotheses and choose the best strategies, as well as increase the predictability of marketing activities.
  5. Use a sales funnel. Going from loading a site page to a target action, the visitor must take simple and obvious steps, which can be subgoals when setting up auto strategies. The contextologist only needs to determine the one that is most correlated with the global goal.
  6. Remember that smart strategies are not always effective. Adaptation of autostrategy algorithms works best when users generate targeted actions at least once a day. A wider time interval does not allow using the tool with the highest return. A long decision-making cycle, for example, in the B2B segment, is an excuse to stay in manual bid management mode.
  7. Make responsive creatives. Auto strategies in conjunction with them work much better. The system analyzes the performance of each word combination from the ad, targeting, audience and platform and identifies the most effective combinations.
  8. Choose the right landing pages. Use the rule: one ad group – one landing page. Adding additional landing pages to the group significantly complicates the learning process, making the strategy less effective.

What mistakes do advertisers make?

Among the most common mistakes made by advertisers, which reduce the efficiency of the algorithm, are the following:

  • Set inadequate ROAS or CPA targets. Using the required cost of a lead at the level of 500 hryvnias, while the recommended one is 700 hryvnias, you will make the solution of the task set by the algorithm unrealistic. The forecast always takes into account the specific situation in the market, so it is more correct to set the recommended value and then lower it in stages.
  • Make decisions before the end of the onboarding process. It makes no sense to draw conclusions about the effectiveness of an autostrategy while the system is learning.
  • Don’t take into account the fact that conversion information is received late. If in your niche the decision to make a transaction is not taken immediately, then there will be a delay in obtaining relevant information. It is illogical to evaluate results several days after the launch, when, for example, it takes a week to make a sale.
  • Change campaign settings regularly. After each change, the system starts to learn from scratch. Algorithms will not be able to work stably, and the learning process will not complete correctly.
  • Too much focus on CPC metrics, positions, and impressions. When choosing, for example, the Target CPA strategy, it is important to evaluate only the cost, the cost of conversions, and their number. Don’t focus on other metrics.
Сергей Шевченко
Сергей Шевченко
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