PPC Bid Automation: A Must In 2017

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Seems like every year, I write a post on PPC bid automation and bid management. Manually managing bids used to be practically a full-time job when I started doing PPC in 2002; now, it’s almost an afterthought due to automation.

Two years ago, I was asking if PPC bid management was still a thing. Adwords Scripts, automated bid rules, and bid management solutions were my alternatives to manual bid management at that point, and they’re still good suggestions. Last year, I talked about the best times to use automated vs. manual bidding. This year, I find myself wondering if anyone should be using manual bidding at this point. I’m thinking the answer is no.

10 years ago, the only way to use PPC bid automation was through a tool, like Marin, Kenshoo, or Acquisio. Today, with free tools like Adwords Scripts and bid automation rules in both Google and Bing, even smaller advertisers can take advantage of bid automation.

Google was the first PPC engine to launch bid automation within the interface. Several options are available, including:

•    Maximize clicks
•    Target page location
•    Target CPA
•    Target ROAS

Most strategies are available both as individual campaign strategies, and as portfolio strategies across multiple campaigns. Portfolio bidding is a useful strategy that helps advertisers maximize profits across campaigns or sets of keywords. I used a homegrown type of portfolio bidding back in 2005 when I worked in-house; we created a spreadsheet that calculated our profitability on every product we sold, and cranked out the right PPC bids for each product. It was a manual process, but very successful for us. Read more on portfolio bidding in Adwords at Search Engine Land.

Not to be outdone, Bing Ads rolled out with PPC bid automation shortly after Google did. The rules are essentially the same as Google’s.

If you’re going to use scripts or engine automation, you’ll want to do some homework first. Frederick Vallaeys has a great article on Search Engine Land with an overview of setting up bid management rules. If you’re using scripts, or Frederick’s tool Optmyzr, you’ll need to think about things like lookback windows, ROAS, and target CPA. These metrics are important to understand, even if you’re using a paid tool that does some of the calculations for you.

Automating bids in the engines seems easy – and it is. But you’re giving up some control to the engines, which is a little like the fox guarding the hen house. Not all experts are in favor of using PPC bid automation through the engines. Wordstream has a thought-provoking post on why you should never use Adwords automated bidding. It’s from 2014, but I still tend to agree with most of the article. We’ve often seen automated bidding hurt client performance, either by limiting impressions or click volume, or by inflating click cost to where campaigns become unprofitable.

We’ve had the best luck with paid bid management tools. The benefit of a paid tool is that it’s a third party, so there is no vested interest in gaming the system or inflating CPC. Paid tools tend to have algorithms built in that reduce the number of manual calculations PPC managers have to make. The tools learn quickly, yielding performance improvements within a couple of weeks. Here’s a typical example of results seen before and after implementing a paid bid management solution:


Bid management was implemented in April 2014; immediately the client saw an increase in clicks and a large decrease in CPC. All else equal, this is a win for any client.

Bid management solutions can also optimize mobile bid adjustments. We use Acquisio, and here’s an example of how mobile performance improved with their Bid and Budget Manager tool:

Prior to implementing the bid management solution, mobile performance was erratic. With bid management, cost per conversion stabilized, and total conversions increased significantly.

There are many paid bid management solutions out there – here’s one list, although I don’t agree with their rankings. For instance, they list Marchex, which is a call tracking software, not a bid management solution.

Most bid management software providers offer a free trial. I’ve found that the time I save in calculating targets and setting up rules more than pays for the software.

Paid PPC bid automation tools aren’t for everyone. With all the great free options out there, there’s really no reason to be manually managing bids these days.

Can you think of a situation where manual bid management makes sense or where automation has gone wrong? Or is automation the only way to go? Share in the comments!

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Comments

  1. Good post, Mel. For larger or general accounts I agree with most of the points here, but for some SMBs or some unique campaigns where data is the goal (like a test campaign), or even new accounts, manual biddign has it’s place. Not only does it give you more control for these small or unique situations, but it gives you a better feel for the account and the reaction to your adjustments. But other than that, automation saves you time, which there is never enough 🙂

    • Melissa Mackey says:

      Thanks! I was hoping someone from the SMB world would chime in – that’s the one area where I was thinking manual bidding might make more sense and actually help, in fact.

  2. In regards to Google’s bid automation, we’ve actually seen a lot of success with Target CPA bidding helping to lowering CPA’s overall. We like to run “experiments” on Target CPA bidding and a majority of the time they outperform our manual. Now, are we just not optimizing as well as we could? Maybe. Or does Google just have a better understanding of when certain times in the auctions our client’s ads will convert and where? I don’t know. We’ve just had more success using it lately.

    • Melissa Mackey says:

      That’s great to hear! I know that several of Google’s optimization algos seem to work better, and more in the advertiser’s favor, than in the past.

  3. David Szetela says:

    Great thoughts, Melissa! A few points:

    1. All flavors of bid management work best when there is a lot of conversion data per month. This is a good reason for SMBs and others to track “micro conversions.” This is especially true for ROAS bidding – scant conversion data means lousy results.

    2. CPA bidding has always worked best for us. The algorithms keep CPA in line and maximize conversions – just as advertised!

    • Melissa Mackey says:

      100% agree – the more data, the better. Low-volume campaigns make it hard for algorithms to learn, so automation is little better, and sometimes worse, than manual bidding. I’m a big fan of CPA bidding if you have enough conversions to make it work.

  4. Arianne says:

    Great debate! We’re testing Google’s Target ROAS strategy across a few campaigns at the moment (using a number of different portfolio strategies with different targets) and it seems to be working well. However, we are also using Data-Driven attribution in Adwords, fed in from goal data in GA, which perhaps gives us a slightly better data-set to work from as by it’s nature it’ll be using a non-Adwords-centric dataset.

    If it continues to work, we may expand the approach to more campaigns, but I think it’d be critical to use more than just one portfolio strategy, as some of our top Generics may need more flexibility on ROAS compared to our other Generics. Competitors needs a different target set compared to Destinations, and so on.

    Usually though, I’d keep top volume terms out of any sort of automation and manage those manually for ultimate control.

    In the long run, I think we’ll have no choice but to use automation as there’ll be too many factors to consider for manual optimisation. There’s need to be some sort of AI element to process all the user signals and audience data to help us make the decisions – but we’re still a way off that yet 🙂

    • Melissa Mackey says:

      Yes, automation is going to become standard soon, I think, with the advent of AI and other data signals. I like your hybrid approach, which makes a lot of sense to me.

  5. Hey Melissa, good stuff as always. I look after a few accounts and have taken over an account recently from an ‘Agency’ and all are using manual bids. I’ve realised I need to get smarter about this, but where do I start? Am thinking of 1 account where there’s a reasonable amount of conversions and setting up an experiment on, say, 50% of the traffic using an automated strategy (which one?) – does that sound like a plan? Thanks, Dan

    • Melissa Mackey says:

      Sure, an experiment within Adwords is a great idea. Which automated strategy depends on your campaign goals. If you have a target ROAS in mind, use Target ROAS; if you just want traffic, use Maximize Clicks, etc. Good luck!

  6. Andy Taylor says:

    I think manual can make sense for an advertiser’s own brand keywords – there usually aren’t too many variations and it’s easy to manage. Usually these terms convert at really high rates as well so typically require less changes to hit efficiency goals.

    • Melissa Mackey says:

      I disagree. I’ve seen amazing results by automating bids on brand terms, using a CPA bid strategy. The system, whether Adwords or a third party, is usually much more efficient than I am at optimizing bids for CPA. Just my experience!

  7. Love the article, great POV. Like you, I’ve been manually editing bids since AdWords rolled out and I still defer to it being part of our workflows. For me, it’s not much effort to aggregate keywords, product groups, remarketing groups, etc. into one excel file and apply boosts based on various filters. With bulk capabilities, the entire exercise only takes 1/2 hour at best and with enterprise-level accounts.

    I’m not against automated bidding, it can have its time and place (newly acquired accounts, scale needs at an agency, etc.), I just don’t fully trust it. I’ve used BM solutions from Adobe, Marin, and the publishers, all with mediocre results, at best.

    What I’ve found is that the time it takes to monitor results, pull levers, understand the intricacies of each setting and sub-setting, QA with support, and more, is the same amount of time, if not more, than manual bidding and with comparable results. I’ve set up position above rules in AdWords that resulted in a massive loss in traffic and a large credit due to missing context around how it actually works. I’ve experienced a large drop in traffic and orders through the other tools’ portfolios given that it needed to ‘learn’ first. The list is a healthy one…

    The nod manual bidding has over automated bidding is that of control and budgeting. Automation will never know what humans do. They’ll never be able to anticipate seasonality (intra-week/month, holidays, other) like people can. Automation also cannot turn budget up/down on a dime as effectively as manual bidding. These are and continue to be the major pain points in my experiences. There is a ‘feel’ that is developed to an account after being involved in it for so long.

    Automation can work, it has just been my experience that it requires a very keen eye, a lot of questions, and hand holding from those closest to the tool. I wouldn’t advise it as a ‘must have’ and/or one that is adopted at-large but more so a tool that can be used with caution.

  8. Great post, really insightful.

    I have recently started running tests on Google’s new Smart Display campaign and the results have been very promising. This utilises the target CPA approach, as well as a daily budget.

    Our target CPA after 3 weeks was where we needed it to be and conversion rate has been sitting at around 15-25% depending on geo. We’ve seen conversions on placements we would never really want to pursue, but due to machine learning and automation, Google picked these up.

    So far so good…I’d highly recommend people run a test if this suits your products/services.

    One thing to remember is the first two weeks it will likely be high cost per con due to Google optimising on your behalf and finding the best placements/positions.

    Thanks,
    Ben

  9. I was very interested in the link to the list of automation tools. But I found it was hosted at TopSEOs and my opinion of them is very, very low – don’t get me started.

    So I could use to recommendations based on the personal experience of others. The two charts in the post including the one from Acquisio are something I would like to duplicate for my clients.

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