Pros and Cons of PPC Automation

PPC automation with Google Ads
PPC automation with Google Ads

It’s no secret: we’re big advocates of manual bidding around here. It offers more control, which can pay off in the form of more conversions at a lower price when it’s done right.

Google, of course, recommends automated strategies like ROAS or Target CPA, stating that these methods are designed to save you time and deliver better insights than making the adjustments yourself. However, PPC automation is far from a set-it-and-forget-it strategy.

When used correctly, it can help you get more from your manual efforts. However, left unattended, automated PPC can mean overspending on terms that aren’t exactly profitable. 

Keep reading to learn more about when it makes sense to relinquish some control, and when to be careful with Google’s recommendations.

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Manual Bidding vs. Automated–Which is Better?

Overall, automated bidding is a solution that delivers a real mixed bag when it comes to ROI. In most cases, manual bidding is your best bet, as it offers the most control over your ad spend.

However, answering the question of whether one method is better than the other isn’t so cut and dry. 

Search Engine Land breaks down Google’s automated bidding strategies into two categories: Smart Bidding and Vanity Bidding. Vanity bidding focuses on outcomes that are difficult to link to the impact on conversions, whereas Smart Bidding aims to help you maximize your ad spend. 

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With that said, Google just pulled the plug on the Target Location and Target Outrank options, replacing them with a Smart strategy known as Target Impression Share. According to Google, Location (aimed at securing top SERP position) and Outrank (aimed at outranking a competitor domain) were too focused on position, rather than on impact.

Instead, this strategy aims to get advertisers to think more about how page placement affects ad performance. Still, it’s worth pointing out that impression share still falls within that vanity space, as impressions are hard to link directly to ROI.

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Manual Bidding

Manual bidding is the most straightforward bidding strategy within the Google Ads universe. The process allows advertisers to set bids at the keyword level, with any changes performed by a human who has log-in credentials. 

The most obvious benefit of sticking with the manual approach is control. Automatic bidding doesn’t allow advertisers to edit bids or tier match types, and often, the algorithm does whatever it takes to get that click or conversion, even when it’s not profitable.

Manual PPC Cons

With manual bidding, the main drawback is that this process takes time. Manual bidding, of course, requires an actual human to go in and make judgment calls about specific keywords and ad groups. 

While setting up manual bidding is relatively straightforward, execution requires some expertise. Successful advertisers need to invest some time and effort into learning which strategies are most profitable for their brand.

The other thing to think about is that manual bidding doesn’t always reveal every insight. With automated bidding strategies, Google can pull in new data that you can use to inform future campaigns. 

Enhanced CPC 

Enhanced CPC is a lot like Manual Bidding, but with one significant difference: you’ll set the bids, but sign over control to the Google algorithm so that it can make adjustments on your behalf. They even add a disclaimer that manual bidding can lower performance results. 

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The smart bidding process allows Google to increase or decrease bid amounts based on the likelihood of driving sales. The aim is to average out the bids so that they still fall within your maximum cost per click limit. 

If a search is too competitive, Google will lower the bid, so you don’t show up for a specific term unlikely to lead to a conversion. On the flip side, Google will also increase bids automatically if there’s an opportunity to swoop in for the sale. 

Where Things Can Go Wrong

Before you can get started with Enhanced CPC, you’ll need to put some mileage on your Google Ads account. 

Google needs to have enough data to make adjustments to your bid, based on what they know about how your audience responds to specific search terms. 

Otherwise, they’ll apply performance data from other accounts, which may or may not be relevant to your audience.

Enhanced CPC can quickly eat into your budget if you’re not careful. Last year, Google announced that ECPC would start adjusting bids with no caps in place. In the past, the strategy could only increase bids by a 30% maximum. 

The Google algorithm is set-up to drive conversions. But it’s vital to understand auto-bids may not net you the most profitable conversions. With no limits in place, the algorithm may end up bidding too much on a low-value click.

You’ll want to keep a close eye on your CTR and CVR to ensure that the bidding strategy is working according to plan. Additionally, reviewing your CPC and CPA performance will help you make sure that your ads are profitable.

Target CPA

This strategy is 100% automated. Advertisers get started by setting a target cost per conversion; then Google adjusts bids to generate as many conversions as possible. Like Enhanced CPC, Google aims to balance out your bids so that the average amount spent per conversion matches your target bid. 

To get started with Target CPA, you’ll need to enable conversion tracking, as this will let you know if you’re driving conversions or not. Again, you’ll need to make sure that your Google account has enough data so that it can deliver results that drive conversions. 

Google recommends that a campaign should have a minimum of 15 conversions within the past 30 days before applying this bidding strategy; notice that Google will let you know when you hit this number.

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What to Watch Out For

If you’re having trouble reaching the 15-conversion minimum at the campaign level, see where you stand at the portfolio level. If you’re still not seeing many conversions, it’s probably not the best time to add this strategy to your campaign.

The other thing you’ll need to be careful about is how you go about setting goals. For example, look back at the average CPA for this campaign. If you’ve been spending $35 per conversion thus far, a $20 target CPA isn’t realistic.

Low-balling your bids will limit Google’s ability to enter auctions and learn from experience. 

And finally, if you do decide to give Target CPA a try, don’t give up after a week or so. Instead, plan on testing it out for a couple of weeks, setting a bid slightly above your historical average. 

The idea is that you want Google to start learning about what works and what doesn’t—then you can slowly begin to bring down your target bid. 

Maximize Clicks

Maximize Clicks is an automated bidding strategy best used for brands aiming to increase traffic to their website. When you select this option, Google Ads bids to increase the number of clicks generated by your campaigns, while sticking within a target amount. 

The key benefit of using Maximize Clicks is to increase clicks on low-traffic terms without breaking the bank. You can opt not to set a daily budget and let Google do its thing, but this approach can quickly lead to overspending if you’re not careful.

What to Watch Out for with Maximize Clicks

Always set a maximum cost per click. Google’s algorithm is programmed to get as many clicks as possible for your campaign. Meaning, it will spend your money fast if you’re not careful. As we’ve mentioned before, Maximize Clicks is best-suited for awareness campaigns, as clicks don’t always add up to conversions, and poorly-targeted campaigns can increase bounce rates and lower your quality score. 

Target ROAS

This strategy is similar to Target CPA but focuses on return on ad spend (ROAS) instead. Here, Google makes predictions based on past account performance to determine the cost per conversion, but also the value of each conversion.

It will adjust bids in real-time to maximize conversion value while trying to achieve the Target ROAS goal you’ve set at the ad group, campaign, or portfolio level. Selecting from the following list, you’ll also choose which conversion metrics come into play here. 

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Similar to what you see happening with Target CPA, individual conversions might cost more or less than the amount indicated during set-up. Again, the algorithm aims to strike a balance between high and low, to keep that average as close as possible to your target bid.

Advertisers can set minimum and maximum bids at both the campaign and portfolio levels to keep automated spending in check. 

However, Google advises against this practice, as it hinders the machine-learning algorithm’s ability to learn more about what drives results for your account. 

Target Impression Share

Target Search Impression Share is an automated strategy set at the campaign level. The goal is to maximize the number of impressions generated by your ad as compared to your competitors. Google automatically sets bids to achieve your share goal (represented as a percentage). 

You’ll set it up by choosing one of three placement options: first position, top of the page, or anywhere on the first page. Bidding on first position could help you outbid competitors who are bidding on your branded terms, and any of the three options could help new e-commerce sellers increase brand visibility.

Downsides of Using Target Impression Share

As mentioned above, Target Impression share is designed to increase the reach of your campaign. You’re bidding based on impressions, which means that it’s difficult to definitively link your campaign to conversions or new leads. 

Additionally, you’ll want to be careful about how much you spend on this strategy. If you set your bids too low, you might not get the placement you were hoping for. Alternatively, if you set it too high, you could end up paying too much per click. 

Wrapping Up

As we’ve often mentioned, the best results come from tightly-controlled PPC campaigns. 

But, we understand that manual bidding is a time-consuming strategy that the average e-commerce seller doesn’t have room to add to their busy schedule. 

Automated bidding presents a solution, but it’s an imperfect one. To get the most out of this approach, you’ll need to have already seen some success with Google Ads, as your historical data plays heavily into machine-learning performance. 

Automated bidding presents a solution, but it's an imperfect one. Click To Tweet

Building that history takes time, time that you may not have. At Key PPC, our sole focus is e-commerce PPC. This allows us to design well-researched campaigns using proven strategies to drive clicks and conversions, and ultimately to grow your profits. 

Contact us today to learn more about our approach to managing your account. 

Free Download: When to Use Automation and When to Skip it