Automated Bidding Strategies By The Numbers

By Danielle Gonzales | @DGonzoPPC | Account Manager at Hanapin Marketing

When you think about automated bidding, or any machine-learning algorithm, it’s useful to envision a physical machine with lots of gears and belts in need of plenty of oil to stay running smoothly. Not to mention, useful human stewards to keep it all functioning. Even though the machines we’re working with in the digital marketing sphere are less tangible, there’s a lot we can do to proverbially “grease the wheels.” In this post, I’m going to lay out specific numbers that will be useful in determining which automated bidding strategy aligns with your goals and the necessary data needed to get that strategy off the ground.

Did you know that Google’s machine learning algorithms can process 70 million signals within 100 milliseconds? That’s insane, right? These data rich signals are informed by Google’s access to 7 different properties, each with a 1+ billion users. These include Google, Gmail, YouTube, analytics, android, Google Maps, and Chrome. All this to say, the machine is fed by an incomprehensible amount of data being processed in microseconds and to get it to work optimally, we need to steer it in the right direction.

Here is a break-out of automated bidding strategies, the business solutions they provide, and data needed to get them to perform seamlessly:

Enhanced CPC

Use if your goal is to drive a high volume of site traffic at low cost while still optimizing for conversions.

  • On average, leads to 10% more conversions than manual bidding
  • Lets marketers retain some manual control, like setting CPCs, but can adjust bids in real-time if an auction is likely to lead to a conversion.
  • Hot take: don’t employ new campaigns with this strategy. Start out with manual bidding and wait for data to be generated then switch to eCPC so that the machine can optimize off the data collected.

Target CPA

Use if your goal is to scale campaigns at your current CPA goal or maintain consistent CPA.

  • On average leads to 20% more conversions than manual bidding
  • Only employ this in campaigns that have received 30 conversions in the last 30 days, otherwise there’s not enough historical data for the machine to “learn” from.
  • Do not set bid limits with this strategy as it can prevent the necessary bid adjustment that best meets your target CPA
  • If you’re trying to drastically reduce CPA, do this in phases. Reduce 10%, then 20%, 30%… over the course of several weeks

Maximize Conversions

Use if your goal is to get the most conversions from your existing budget.

  • On average leads to 20% more conversions
  • This works best in campaigns limited by budget
  • For optimal performance, the campaign must have received at least 15 conversions over the past 30 days and have less than 90% impression share.
  • Cannot use in campaigns that have a shared budget

Target ROAS

Use if your goal is to grow conversion value. It considers both the likelihood to convert in an auction as well as the conversion value associated. This one takes a bit more “greasing.”

  • On average leads to 30% more conversion value vs. manual bidding
  • To employ, must have a minimum of 15 conversions over the past 30 days.
  • Google recommends 100+ conversions over that past 30 days for best performance.

Target Outranking Share

Use if your goal is to outrank ads from a competitor.

  • Works only in the search network
  • This strategy will not necessarily improve your ad rank, except in comparison to the selected domain’s ads
  • You can only target one domain to outrank for each bid strategy
  • For Low quality keywords – leave the setting on “don’t raise bids.” It will cost more to raise bids for these keywords

Target Search Page Location

Use if your goal is to appear on the first page of search results or in the top positions.

  • Works only in the search network
  • Bids will be updated multiple times a day and can fluctuate based on real-time auction competition so CPC can fluctuate
  • You can set a CPC bid limit to cap spend if that becomes an issue
  • It is not guaranteed that you will get your goal placement as this strategy still depends on quality score and advertiser competition

Closing Thoughts

When selecting a bidding strategy, keep these numbers in your back pocket. They may also help diagnose why a new strategy is not working.  Knowing when to deploy a new strategy can be difficult, but you can always run an AdWords Experiment for many of the bidding strategies so you can get an idea of what performance will be like before you fully commit.

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