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Bid Adjustments vs. Auto Bidding in Google Ads

Bid adjustments in Google Ads have been available for some years and provide a key management tool to help advertisers control their ad rankings and target spend around the better performing elements of a campaign. However, with the increased use of auto bidding strategies (which incorporates smart bidding), the role of manual bid adjustments has been largely superseded by Google’s system, so what are the pros and cons?

Bid Adjustments

As part of a manual bid strategy, the use of bid adjustments enable ads to be shown more or less frequently based on where, when and how people search. For example, sometimes a click is more valuable to a business if it comes from a smartphone, at a certain time of day or from a specific location.

Bid adjustments are set by percentages within the campaign settings menu. For example, if a campaign performs well on mobile devices with a maximum CPC (cost per click) bid of $1, then to show ads to more customers on mobile devices, a bid can be increased by 20%, resulting in a final bid amount of $1.20. This will potentially improve the ranking position and visibility for the ads, as well as increase the average CPC. Likewise, if the bid is to be decreased to 80c, it would be lowered by 20% and so the ad rank and the CPC would usually be reduced on a mobile device search.

The main types of bid adjustment that are available to advertisers are by device, location and ad schedule (time of day / day of week). There are also more advanced options to adjust bids by top content, phone call clicks, audience / remarketing lists and demographics,

It’s possible to set up multiple bid adjustments between the different options, but combined bid adjustments cannot exceed a 900% bid increase. Therefore a $1 bid with a max device increase of 900% combined with a location increase of 900% will result in a bid of only $10. The lowest possible bid adjustment when combining multiple bid adjustments is -90%.

Automated Bidding

We have covered automated bid strategies in previous posts, and these options help advertisers take the heavy lifting and guesswork out of setting bids to meet performance goals. They reduce the time spent on managing bids at the keyword level, plus Google’s confidence in their system should allow Google Ads to automatically optimise bids using advanced machine learning to get better performance for specific business goals.

The 6 types of automated bid strategies currently available are:

  • Maximise clicks – used to increase site visits.
  • Target impression share – used to increase ad visibility (Search Network only).
  • Maximise conversions – used to get more conversions while spending the allocated budget.
  • Maximise Conversion Value – used to get more conversion value while spending the allocated budget.
  • Target CPA (Smart Bidding) – used to get more conversions for a specified target CPA (Cost-Per-Action)
  • Target ROAS (Smart Bidding) – used to meet a target return on ad spend (ROAS) when each conversion is valued differently.

There is also the option of using Enhanced CPC (ECPC) which is a mid-level setting that aims to help maximise conversions or conversion value by combining manual bidding with a Smart Bidding strategy (like Target CPA or Target ROAS), that uses advanced machine learning to help tailor the right bid to each and every auction.

With Smart (goal-optimised) campaigns (including Smart Shopping) and App campaigns, Google’s machine learning automatically adjusts bids to maximise performance based on advertising goals. This uses historical data and trends to adjust bids levels to achieve the desired results for the advertiser and should continually learn and improve the best way to focus spend in a campaign.

Using Bid Adjustments with Automated Bidding

The main role of automated bidding is to remove the need for the advertiser to control bids, so manual adjustments at the keyword level are no longer possible. For some advertisers this can be a significant change in approach and a big reliance on Google’s system to get the same or better results than from a manual bidding campaign.

Of course, these bid strategies need to be set up appropriately and tested to compare the before and after trends, having given the auto strategy time to ‘learn’ from past data and make the necessary adjustments. Advertisers need to monitor how CPC change, if clicks and impressions grow or decline, and most importantly, do conversions and conversion cost improve!

If advertisers were previously using bid adjustments as part of their campaign management, these are no longer relevant with an automated bid strategy, other than with Maximise Clicks or Enhanced CPC. That’s because Google’s system should now be using the various signals in the campaign to adjust bids automatically.

It’s also worth noting that with a Target CPA campaign, device bid adjustments change the CPA target, rather than the bid. Also in a Target ROAS campaign, the only device bid adjustment that can be used is -100%.

As more advertisers move to automated bidding, the role of bid adjustments within a campaign’s settings is becoming less important, so that advertisers have to adjust their management approach away from bid management and more into keyword focus and advert performance.

If you want to know more about how your business can benefit from the various bid strategies in Google Ads, please get in touch.