What is Automated Bidding in Search Ads 360?
Automated Bidding is the use of bid strategies, which are mechanisms that automate the process of bidding (instead of manually setting bids and bids adjustments), in order to achieve defined goals.
Search Ads 360 (previously called DoubleClick Search) is a Google’s search management platform that helps to manage search campaigns across multiple engines such as Google Ads, Bing and Yahoo.
What are the possible bid strategies?
Before choosing a bid strategy, you first need to define what is your goal, depending on your business needs. Bids strategies can help to achieve different goals:
- Conversions: bids will be adjusted to maximize the number of conversions generated while meeting a targeted cost per action (CPA) or a monthly spend.
- Revenue: bids will be adjusted to maximize the revenue generated while meeting a target effective revenue share (ERS), return on advertising spend (ROAS) or monthly spend.
- Clicks: bids will be adjusted to drive the most traffic to your site while meeting a target monthly spend.
- Position: bids will be adjusted to show your ads as close to the target position as possible.
Conversions and Revenue strategies are called Smart Bidding strategies.
On top of these strategies you can also create a custom strategy with multiple ERS, ROAS, and CPA targets. This is called Advanced Targeting.
When implementing a bid strategy, you will have the possibility to specify a minimum bid and maximum bid constraint. Keep in mind that the narrower your constraints, the less efficient the bid strategy will be.
Bid strategies can also set or recommend bid adjustments depending on:
- The device a customer searches from
- The membership in a remarketing list
- The location
How do bid strategies work?
Bid strategies use algorithmic bidding to achieve the goals. They focus on maximizing performance of the portfolio as a whole, a portfolio being a group of campaigns that share the same goal. The larger the portfolio, the better it will perform. Indeed Search Ads 360 will have more room to find opportunities in order to improve overall performance.
Some concrete examples:
- If a bid strategy observes that certain keywords are effective at driving conversions it will adjust bids for these specific keywords to maximize conversions at the optimal CPA
- If a bid strategy detects predictable trends (such as recurring patterns on certain days of the week) it will adjust bids to take advantage of it
To determine the optimal bids, bid strategies use historical data. You can find here the requirements:
The more historical data available, the more confident the bid strategy can be in making changes.
When adjusting bids, bid strategies observe the effects of the changes and then make incremental adjustments if needed. Bid strategies avoid making abrupt changes, since that makes it more difficult to predict the outcome. For that reason, once you start with bid strategies, it is recommended to let the bid strategies work and not make any major changes to the portfolio’s campaigns.
How to evaluate bid strategies performance?
When evaluating the success of a bid strategy, you should take into account the following:
- Is performance of the bid strategy better than manual bidding?
- How closely does the bid strategy performance match the goal you specified?
You should evaluate performance over a long period of time (at least several weeks) to determine if the bid strategy is effective and to see the improvement, since the bid strategy needs some time at the beginning to calibrate.
We recommend two different ways of comparing performance:
- You can compare performances before and after launching the bid strategy (pre/post). This is the easiest way to do it, but keep in mind that it cannot provide the most accurate comparison since it does not take into consideration some elements (such as seasonality for example).
- You can run an A/B test to split your campaign traffic into two different parts, with one part running under a bid strategy and the other part under manual bidding for example. This type of test will enable you to evaluate the impact of the bid strategy.
What’s the status @ Semetis?
We are all aware that automated bidding is not just a trend but is becoming the new standard and we want to take advantage of it. Some clients are already rather advanced in their strategies while others are in the process of switching to automated bidding.
Bid strategies are not too complex to implement and it has been proven to be effective. They enable you to save time but also to obtain better results in the long term, by making changes at a scale not possible through human management. If you are using Search Ads 360 we would definitely recommend you to test it yourself: set-up your bid strategy and let the algorithm work, automated bidding might bring your performances to the next level!