When Should You Use Google Ads Automated Bidding?

Introduction

I’m just going to come out and say this Smart Bidding (aka auto bidding, automated bidding – for the purposes of this article I will stick to Smart Bidding for consistency) can deliver better performance than manual bidding.

The key word (pun intended) though is can

Bad Reputation

Let’s dial back for a moment, Smart Bidding doesn’t have the best reputation and to some extent, I can see why. 

Scenario: You’re going about your day checking in on your shiniest, best campaign in Google Ads and you see a notification saying you could improve performance by using Smart Bidding (i.e. maximise conversions). 


Great! You enable the strategy and put your feet up ready to see the results roll in.

After a few days, you check in to see how close you are to becoming employee of the month…uh-oh, A LOT of money has been spent and there are little to no results to show for it…EEK.

Sound familiar? This is usually the type of experience people have encountered when it comes to Smart Bidding.

Through the accounts I’ve managed and audits I’ve carried out over the past 12 months, a few similar themes have cropped up as to why this is the case and it’s usually due to account setup and timing, more so than the strategies themselves not being effective. 

The good stuff

Let’s take a look at why you would want to use Smart Bidding. 

Smart Bidding strategies are effective because they are able to utilise more signals than manual bidding and do it all in auction-time. This means that you can take advantage of having your bids tailored for each individual ad auction based on multiple data points. 

This is an important distinction as it means not only is Smart Bidding going to bid more for the right users, it will also bid less for the wrong users, each and every time an ad is able to show.

Of course, you can get somewhere towards this kind of setup with bid adjustments and scripts, but those adjustments are more of a blanket approach and there will always be a degree of inaccuracy, even if you’re updating them regularly. 

Control

You might feel like you have more control by sticking to manual bidding and that’s fine if you’re getting great results, more power to you! 

The biggest push-back on automation when it comes to bidding, in particular, is usually the handover of control. It can be a daunting prospect to allow the beneficiary of your ad spend to have control over how much you bid.

The reality is though, with all of the extra signals available and the ability to adjust bids in auction-time, that you actually have more control over bidding for the right people with Smart Bidding – you just need to be open-minded to the change. 

If you are thinking of venturing into the world of automation, here are our 3 steps to ensure you can be successful with Google Ads Smart Bidding;

1. Correct conversion setup 

In order for Smart Bidding strategies to work correctly, you will need to have conversions in your account for them to optimise for. 

It might sound obvious but this is the first step. 

An automated strategy is only going to be as good as the conversion data it has to optimise for. As the saying goes, garbage in, garbage out.

If you don’t have conversions set up or you have them set up but your campaigns haven’t converted yet, automated strategies aren’t for you right now (more on this later). 

The important bit: If you have multiple conversions in your account, the strategies will optimise for any of which are set to ‘Yes’, ‘Include in ‘Conversions’. This is the default setting for conversions in the account, so, more than likely all of your conversions will be set to yes.

This can cause issues if your main KPI is a transaction (e-commerce) or an enquiry (lead generation) but you also have multiple other conversions such as; 

  • Call from ads 
  • Brochure downloads
  • Time on page
  • Key page views 

Set up in your account, Smart Bidding strategies will optimise for any of these conversions and adjust bids equally without understanding the difference in value to your business.

I.e. if you enable maximise conversions and you have a page view as a conversion, you might get a whole lot of page views and no more sales. 

We split out these actions into categories of macro and micro conversions. 

A macro conversion is the most valuable action a user can take on the website. Types of macro conversions include a transaction for e-commerce or an enquiry for lead generation. 

Micro conversions are other valuable actions which usually appear in the funnel before the macro conversion event. Types of micro conversions are things such as brochure downloads and newsletter sign-ups. 

It is worth tracking both macro and micro conversions within your Google Ads account, to see the full picture of the value your traffic is adding. 

For example, if you only have macro conversions in the account, you may decide to pause a particular keyword/campaign thinking it is not adding any value. If that keyword or campaign was driving brochure downloads and as a result was creating more business, you would want the visibility.

Therefore anything you want to track, but not optimise for, should be unticked on ‘Yes’, ‘Include in ‘Conversions’, within the conversion settings. 

You’ll still be able to see reporting data for these actions the same as before in your campaign dashboard but it will be bucketed under ‘All conv.’ as opposed to ‘Conversions’. 

2. Picking the right strategy at the right time

There are a number of Smart Bidding strategies available. The one you select should depend on where the campaign is currently in terms of performance, along with the business’ wider strategy. 

The workflow below shows how a campaign should progress through various bidding strategies to get the most out of Smart Bidding. It’s a continual process, not a case of set it and forget it.

How long a campaign spends within each strategy and how far it progresses through the workflow will depend on the amount of conversion data in the campaign, alongside the growth strategy of the business. 

For businesses focussed on aggressive growth, campaigns are likely going to perform best on maximise conversions, whereas, for those who are more ROI focussed, Target CPA or Target ROAS would be preferable once they are able to be implemented.


We always start new campaigns on manual bidding, as this allows for more direct control to test and see how various areas of the campaign perform without any outside influence on bids or cost. 

Once the campaign has started to convert, you can use that conversion data to increase/decrease bids based on the likelihood for conversion, whilst retaining some manual control with Enhanced CPC. Although not a fully automated strategy, ECPC technically counts as Smart Bidding. 

From ECPC your next step will likely be maximise conversions, this will work to get the most conversions possible for your daily budget. Pre-warning, this strategy will try to spend your daily budget every day, so, if your campaign has been historically underspending, you could be in for a shock – make sure you check before enabling and also check your conversions actions as mentioned earlier in the post. 

If your goal is to get as many conversions as possible, your campaign might stay on this strategy and that’s completely fine.

If the business is more ROI focussed, it’s at this point (now you’ve got stacks of conversion data) you would be better moving to Target CPA or Target ROAS.

Be mindful with Target CPA and Target ROAS, you need to set your targets in line with your actual performance. 

If your current CPA is £15 and you put in a Target CPA of £1 – it won’t work. Start with your current CPA and scale down gradually once you are hitting the target. The same thing applies for tROAS, start with your current ROAS and look to work the target up in line with your actual performance. 

In order to work most effectively, Smart Bidding strategies need data. You can help out here.

3. Data Inputs

Attribution

Google says: 

“The average person clicks on about four different search ads before converting.”

Last click attribution is the default setting for conversions in Google Ads, which therefore means, a number of touch points in the conversion journey are ignored.

Try using a non-last click attribution such as time decay or position based – ideally data-driven when it is available.

Audiences

Whether you’re linking via Google Analytics or using the Google Ads tag, adding audiences as ‘Observation’ to your campaigns gives the bidding strategies more data to work with and more of an opportunity to optimise for the right users.

Smart creative

Smart Bidding strategies work really well in conjunction with Smart Creatives such as Responsive Search Ads and Dynamic Search Ad campaigns. 

Make sure you have 1 RSA ad as well as your standard ETAs in each ad group for the best results. 

Having multiple headlines and descriptions available within in RSA ads means that bidding strategies have a wider data set of creative signals to use to influence the bid when it comes time for an auction. 

Summary

In summary, Smart Bidding isn’t something you can just turn on and leave (sorry!), but with the right setup and implementation, you can see some really great results.

It’s not a case of manual vs automated, we still use both and both have their pros and cons, as well as particular uses for certain things. 

I’ll end with a couple of key points to remember:

  • The Smart Bidding strategies mentioned are conversion-focussed. By using these strategies you are saying conversions are what is most important to you, so, don’t be surprised if you see some scary Avg CPCs from time to time – it shouldn’t matter as long as you’re getting more conversions/business for the same budget on a monthly basis;
  • You can use the drafts and experiments tool in your account to test a Smart Bidding strategy on a percentage of your traffic before you commit to fully enabling it;
  • Make sure your conversions are set up correctly and set realistic targets if you’re using tCPA or tROAS;
  • You should be monitoring the performance of your campaigns all of the time, to get the best results.

Struggling to get the paid search results you’re looking for from Google Ads? Contact us to find out what’s possible. 

 

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