With the exponential growth in programmatic advertising, it is no wonder that marketers are trying to find ways to maximize their efforts. This is where automated bidding can come in, but there are different ways to handle this.
Let’s take a look at the benefits and limitations of using automated bidding.
What is Automated Bidding?
Automated bidding is a tool that helps you set up your bids in a cost-effective manner to achieve your campaign objectives. It automatically sets the bid prices according to the predefined strategy and adjusts them according to the changing market conditions.
Why use Automated Bidding?
The benefits of automated bidding are many:
- Increase in your ad visibility with lower costs. Automated bidding increases the number of times ads are shown without increasing the bid price, which results in higher impressions and greater ad frequency. This also allows you to focus more on other areas since you’re not spending your time setting up manual bids.
- An increase in conversion rate. Studies show that marketers who manually set their bids end up paying more for the same number of clicks, which means a lower return on ad spend (ROAS). There’s a 90% chance that automated bidding will lead to a better ROAS than manual bidding.
- Optimization across different platforms. If you choose to run different campaigns on various sites, automated bidding will allow you to have a uniform approach across all of them. It will also allow you to increase the bid prices for certain locations and optimize your bids according to seasonality or other relevant factors.
- Automated bidding is not just about setting the bid prices; you can also do other things, such as pause or stop keywords and campaigns when needed. You can also add and remove negative keywords in bulk by uploading .csv files, significantly increasing your campaign management efficiency.
- Higher ROI. You don’t have to worry about bidding too low or too high since you’re leaving the bids up to the system, which will maximize your campaign performance.
How does Automating your Bid Contribute to Success?
According to PPCexpo, Automated bidding does not necessarily mean that you have to set everything as the default bid; there are still a lot of factors that can contribute to your success. The most important thing is to create an effective strategy, which will allow your keywords to operate on their own while at the same time delivering content according to your business goals.
A smart automated bidding tool should have the following features:
Proper account segmentation.
You can quickly achieve this by dividing your accounts according to different criteria such as keywords, ad groups, campaigns, and so on. This allows you to create a custom strategy for each of them and monitor their overall performance.
Geotargeting Options.
Setting your bids according to region and language is important because it will allow you to achieve maximum clicks with minimum bid rates.
Conversion Tracking.
This allows you to monitor how your ads perform against specific keywords or page visits and optimize your campaigns accordingly.
Reporting.
There’s no point in having automated bidding if you’re not able to see what affects your overall campaign performance. You need to be able to monitor your ROI and then take the necessary action in order to maximize your results.
By using automated bidding, you’re able to achieve maximum campaign performance without having to worry about doing all the manual work. However, it’s still advisable to create custom strategies depending on your different campaigns in order to maximize your results.
What are the Benefits and Limitations of Using Automated Bidding?
Increase in Ad Visibility with Lower Costs
Automated bidding increases the number of times ads are shown without increasing the bid price, which results in higher impressions and greater ad frequency.
Increase in Conversion Rate
Studies show that marketers who manually set their bids end up paying more for the same number of clicks, which means a lower return on ad spend (ROAS). In fact, there’s a 90% chance that automated bidding will lead to a better ROAS as compared to manual bidding.
Optimization Across Different Platforms
If you choose to run different campaigns on various sites, automated bidding will allow you to have a uniform approach across all of them. It will also allow you to increase the bid prices for certain locations and optimize your bids according to seasonality or other relevant factors.
Higher ROI
You don’t have to worry about bidding too low or too high since you’re leaving the bids up to the system, which will maximize your campaign performance.
Flexibility
Automated bidding is not just about setting the bid prices; you can also do other things, such as pause or stop keywords and campaigns when needed. You can also add and remove negative keywords in bulk by uploading .csv files, significantly increasing your campaign management efficiency.
Consistent Performance Across Accounts
You can easily achieve this by dividing your accounts according to different criteria such as keywords, ad groups, campaigns, etc. This allows you to create a custom strategy for each of them and monitor their overall performance.
Greater Ad Frequency at a Lower Cost
By optimizing automated bidding platforms, you will be able to significantly reduce the costs of your campaigns while increasing their overall performance. This is because by using these tools, advertisers get access to better technology and expert advice on how they can maximize their ads and reach their target audience.
Efficiency.
Automated bidding allows you to manage multiple campaigns faster and more efficiently. This is because marketers can set bids for each campaign, ad group, location, device, time of day, etc., which means they will be able to divide their work accordingly.
Limitations of Automated Bidding.
Automated bidding sometimes can have limitations. Here are some of them:
Unintended Consequences
This can happen if you don’t know what your keywords are worth or their market. For instance, if your keyword is “brand new cars” and gets bid on by a car dealership, this might drive up the price of the click to above what’s considered normal. In this case, your conversion rate will go down because you’re bidding on clicks that don’t convert.
Limited ability to optimize
Even though automated bidding is a great tool, it’s not perfect, and it can sometimes send your campaigns in the wrong direction. For example, let’s say you want to bid more for mobile devices, so you use auto-bidding to change the maximum CPC according to device type. Unfortunately, this will not make your mobile ads perform better because the price is now higher than it should be for this particular platform.
Targeting is Difficult
Since automated bidding is based on algorithms and machine learning which is programmed by humans, it’s not always able to accurately identify unique users. This is because every individual has a unique set of interests that are impossible to predict, thus making it harder for the platform to know what’s relevant and what’s not.
Time Required to Set It Up
Since automated bidding platforms require you to enter specific data concerning your campaigns, it may take a while before you start seeing the results. In addition, marketers have also reported that these tools can run into some technical issues from time to time so they need to be well-versed in every aspect of digital advertising.
Conclusion:
Automated bidding is an excellent tool for digital marketers as it helps them manage their PPC marketing strategies more efficiently.
However, this type of algorithm isn’t perfect, and you need to know how it works before setting up your campaigns. If done correctly, automation tools can definitely improve your overall performance on all fronts.
