Over the past year or two, advertisers have mixed feelings about Google Ads’ gradual shift to automation features.
Automated bidding is a feature of Google Ads that has improved over the years, but can still be overwhelming. There are many different types of automated bidding, each with its own advantages and disadvantages. So, should you use automated bidding? And if so, which strategy should you use?
So, what is Target CPA Bidding?
Target CPA bidding sets your bids such that you have a good chance of getting the most conversions for a target cost-per-acquisition that you set as a goal.
Target CPA bidding automatically sets your CPC bid in order to find an optimal average CPA equal to your target across all of your campaigns. It does this by using historical information about your campaign and evaluating contextual signals present at auction-time.
Your cost per conversion through Google Ads will stay close to your target CPA, even though individual conversions may cost more or less. Your actual CPA may be affected by things like changes to your website or ads, or more competition in ad auctions. Additionally, your actual conversion rate could be different than what was predicted.
For example, if it costs $3750 to acquire a deal by generating 15 leads through Google Ads, you might be willing to set your target CPA at $250.
You are willing to pay $250 per lead to get 15 leads from Google. Google will work to optimize your bids to reach that goal.
Google Ads will use past data to try and identify potential customers who may be interested in your product or service. Factors such as what kind of device they are using, the time of day, and their location will be taken into account. Additionally, ads will be targeted towards people who have visited your site before or who seem to fit the profile of your ideal customer.
Sounds great right?
Not so fast. Let’s keep going.
There are a few items that you must know.
You will not be able to accurately track your conversions or Cost-per-Acquisition without properly setting up conversion tracking. Google Ads uses conversion tracking to track the number of conversions (lead form submissions) an ad generates and how much revenue it has generated based on your target CPA. Once your ads start running, your total average Cost-per-Acquisition will be reported as the Effective Target CPA.
After that, you’ll be less free. Google will be able to pay more than the regular click rate if it sees that a keyword search matches its data. Within campaigns to get sellers who are motivated, there is no guarantee that you’ll even get a lead if the data points to that.
If you’re asking those questions, you’re in the right place! In this guide, you’ll learn:
- The difference between manual, automated, and Smart bidding in Google Ads.
- How each of the nine bidding strategies in Google Ads works.
- When to use which strategy, plus cautions to take for each.
But first, let’s nail down the basics:
What is automated bidding?
When you create a Google Ads campaign, you need to specify how much you’re willing to spend on each ad view. This is called your bid, and you can either set it manually or let Google automatically adjust it based on real-time conditions.
With manual bidding, you can tell Google the maximum amount you are willing to spend per click on your ad. You can make adjustments to your bid based on how your ad is performing, as determined by the metrics available in your reports.
Google will automatically adjust your bids for you based on how likely your ad is to get clicked on or to result in a conversion, using automated rules. Automated bidding may take into account additional data points that you wouldn’t be able to see in reporting metrics.
There are eight types of automated bidding options in Google Ads:
- Enhanced cost per click (ECPC)
- Maximize Clicks
- Maximize Conversions
- Maximize Conversion Value
- Target Cost Per Action ( tCPA)
- Target Return on Ad Spend (tROAS)
- Viewable CPM (vCPM)
- Cost Per View (CPV)
Is Smart bidding the same as automated bidding?
While they may share some similarities, smart bidding and automated bidding are not the same thing. Smart bidding is a system that uses machine learning to automatically adjust your bids based on real-time auction insights. Automated bidding, on the other hand, is a system that allows you to set pre-determined bid rules. These include:
- Enhanced CPC
- Maximize Conversions
- Maximize Conversion value
- Target CPA
- Target ROAS
There are different types of automated bidding strategies, but not all of them are classified as “Smart Bidding” strategies.
How do I set my bid strategy?
After you have decided which option is best for you, how do you choose it?
When creating a campaign in Google, an automated bidding strategy will be selected for you based on your goals.
You do not have to use this strategy!
The other automated bidding strategies are Target search page location, Target outranking share, Target cost-per-acquisition (CPA), and Maximize clicks. You can also choose to bid manually.
and then pick your poison To change your bid strategy, select the blue text at the bottom that says “Select a bid strategy directly (not recommended)” and then select the desired option.
1. Manual CPC
Manual bidding is the simplest bid strategy on the Google Ads platform. Advertisers set their bids for each keyword individually, and the bids remain unchanged until the advertiser changes them.
This is the best place to start for people who are starting out in PPC or who are using their spare time to manage their account. However, there are some drawbacks.
Cautions with Manual CPC
Manual bidding has two drawbacks:
Prepare to invest time
It takes time to manually bid on keywords, including performance review, bid changes, and making the changes.
You could be underinformed
We can only see the performance metrics that Google allows us to when we review our campaign’s progress. With automated bidding strategies, Google can consider data points that we don’t even know exist.
There are two disadvantages to automation that should be considered when choosing a bid strategy. However, this does not mean that all automation is bad or that manual bidding is always the best solution.
2. Enhanced CPC
With Enhanced CPC bidding, you set a manual bid for each keyword, and then the Google Ads algorithm will make small adjustments to the bids if it believes that doing so will result in more conversions.
If you’re doing well with manual bidding, it’s a good first step to try automation. You can enable Enhanced CPC by just checking the box below the manual bidding setting, or by choosing Enhanced CPC from the drop-down menu.