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How Good Is AdWords Automated Bidding?

Over the past 8 months or so, Google had been pushing the benefits of their automated bidding systems in AdWords, confident that their machine learning tools are now advanced enough to provide advertisers with better results. In turn, this should give marketers more time to focus on their campaign strategy while the system provides the best volume of traffic at the ideal cost. But how good are the systems and should you be using it?

There are a range of automated bidding options available to AdWords advertisers, from the default ‘maximise clicks’ to ones that can maintain your ads in selected positions, or more importantly target your best conversions, through enhanced CPC (which is an addition to manual bidding) to maximise conversions to target CPA. These automated bid management systems will all use the various signals available to provide the best results determined by the advertisers input criteria. But how well do they work?

The answer is mixed. The conversion focused systems do increase conversions and lower the cost per conversion in most cases, but this tends to be done through an increased focus on brand name activity and less on more generic terms, which means that impressions and clicks can be reduced and coverage of the target market is lower. Of course the system will target the better converting keywords which can also be brand related, which is fine for some advertisers, but others who may want to grow their market may not see the best results.

The other main issue is that automated bidding puts all the control into Google’s system so that bid level control at keyword level is lost. Therefore some of the priority keywords that an advertiser wants to rank high may be too low, and therefore to achieve a higher ranking the overall bid settings may need to be changed which then impacts all keywords. In addition, it’s harder to know which keywords may be below first page bid when using automated bidding and although impression shares can often be improved, this may not be true for some terms that are core for the advertiser’s strategy.

The other main consideration is that conversions, or more likely conversion cost, needs to be the primary metric for most advertisers, and so an automated bid system used on this metric could be used, but is dependent on historical conversion data. Therefore the campaign needs to have a good history of conversions (at least 100 in a month is recommended) and these would all ideally need to be conversions of a similar value. As Google’s system ‘learns’ the bid data for an automated system, it can mean that results can deteriorate for several weeks before you start to see the benefits of the system, even if it does work well.

So the best advice is to test. If you have enough conversions over the past month or so, run a split test with an experiment in AdWords so that you compare manual v automated bidding as a 50/50 split (or 70/30, whichever feels more comfortable) and see how the metrics perform over the next month. You can then decide whether to increase the % of the test allocation or switch the whole campaign to auto bidding, or back to manual, depending on the results and what works best for your campaign.

If you’d like to know more, or to discuss automated bidding for your AdWords campaigns, please get in touch.