Should You Use AdWords Smart Bidding?
If you are managing a paid search campaign in Google AdWords, chances are you’ve come across one of several automated bidding options in your account. These bidding options allow you to set your campaigns to adjust bids based on trends and predictions. Automated bidding looks at how your ads have performed in the past, and tries to show more successful ads more often. This can reduce significant amounts of wasted ad spend by bidding less on riskier, low performing ads.
Most sophisticated AdWords accounts will utilize one or several forms of these “smart” bidding strategies because of increased efficiency. Bid strategies that use this form of advanced machine learning allows more time to be spent on strategy, and improving performance. Paid search management can now spend less time on easily automated tasks, like manually making changes to bids, with better results. There’s a a few catches though…
Implement Smart Bidding The Right Way
First, before you begin taking advantage of a bidding strategy like this, you will need solid conversion tracking in place. Solid conversion tracking will track all of the conversions in which you will need to judge the success of your campaign. For example, let’s say that you are a lawyer running a campaign to generate more client leads. The website that your ads will point to includes a form, as well as your phone number. If you usually get prospective clients contacting you with either a form submission or phone call, you’ll want to set up conversion tracking in your AdWords account to track these two types of conversions. Tracking only one over another (just form submissions, for example) means that your bidding strategy is missing out on critical information to decide which bids get increased or decreased. Ad clicks that resulted in a phone call to your office won’t be able to tracked. Just like your bidding strategy, at the end of the month, you won’t understand the full picture of what’s working for you (and not working for you) in ppc. If you are an online store, you’ll want to successfully integrate ecommerce tracking in your analytics account, and import the conversion data into AdWords. Irregardless of what kind of business you are, you’ll want to consider all the most important conversion types that you need to track, and get conversion tracking set up for all of them before you begin.
Second, most bidding strategies that you use advanced machine learning need time to become smart. Plan on deploying this to a campaign that has already had enough conversions occur, for the type of conversion you want to optimize on.
Okay, now that that’s out of the way, let’s look at a few of the bid strategies like this that might work for you!
Different Kinds Of AdWord Smart Bid Types
This bidding strategy automatically adjusts your manual bids up or down to get you more conversions (like a sale, lead, or subscriber.) This is a great option if you don’t have a set dollar amount established for what you want to spend acquiring a particular conversion. It allows you to place some initial bids, and then over time, the algorithem will begin to get smarter and smarter with each new conversion you get.
Using this strategy will try to get you the most conversions at a pre-established cost per acquisition (CPA.) This will require you to figure out what each conversion type is worth to you. This is a popular bidding strategy with people who sell a single priced product or service. They know that each sale will only be worth x, so they are only willing to spend y (the CPA) to acquire it. Using this bidding stategy can help you focus your budget on the most profitable targeted searches.
A favorite amount for e-commerce stores, this bidding strategy uses a pre-determined target return on ad spend (ROAS) to optimize your bids. Let’s say that for every dollar you spend acquiring a sale, you’d like at least a $2 conversion value to result (in most cases, this is the amount of the sale.) You’d set a target ROAS of 200% in AdWords. The algorithm will work to spend as much of your budget on ads that can meet this profitability indicator. Over time, your bids will become smart enough to run your best performing ads. Shopping ads that display in shopping results, have especially been shown to benefit from this strategy.
In the end, your success at using an automated “smart” bidding strategy will depend on how well your conversion tracking is set up, and the amount of time bidding strategy has to become efficient at showing results. If you put in the time to set up your conversion tracking, as well as have patience, it will pay off in the long run.
What bidding strategies do you use now? Do you find better results with one over another?