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How Google’s Automated Bidding Works

How Google's Automated Bidding Works

Automated Bidding vs. Manual Bidding

 Have you ever wondered how Google’s Automated Bidding works? When it comes to serving ads on Google ads, there are two ways that you can approach it. You can either manually place your CPC bids or you can allow Google to automate your bids for you based on your budget. Manually bidding allows you to set the maximum price you are willing to pay for a click.

On the other hand, Google’s automated bidding will pay different prices for clicks depending on multiple factors using auction-time bidding. This means that there is a different bid for every query. So while manual bidding gives you more control over your bids, automated bidding typically brings more success to advertisers based on their goals.


Auction-Time Bidding

Also known as smart bidding, auction-time bidding takes multiple factors into consideration when adjusting bids to serve your ads. The factors that this bidding method takes into account are the exact wording of the query, the match type, the device and browser that the consumer is on, the language, and the time of day.

Taking all of these factors into consideration, smart bidding will place a bid that makes sense for your goals, attempting to get a click at the time of an impression.

Smart bidding saves time by saving you from having to optimize your bids across the hundreds or thousands of keywords that you have in your account. By saving time here, you are able to spend time optimizing other areas of your account.

Types of Automated Bidding Strategies

There are six strategies that Google offers based on the goals of your campaign. One of these strategies is to Maximize Clicks. This strategy is used when your goal is to increase traffic to your website. Maximize Clicks will get as many clicks on your ad as it can within the given budget. Another strategy is Target Impression Share. Target Impression Share is a good bid strategy to use if your goal is to increase the visibility of your ad or your brand on Google.

With this strategy, your bids will be set to get as many impressions as possible at the absolute top of the results page, top of the results page, or anywhere on the results page, depending on what you select during the campaign setup. A third strategy is Target CPA. With the Target CPA bid strategy, you set a target cost per conversion, and Google will get as many conversions while staying in the range of the target that you set.

Conversions may end up costing more or less than the exact target. This strategy is good to use if you are trying to get as many conversions as possible with a certain cost for each conversion. Another bid strategy that Google offers is Target ROAS. Similar to Target CPA, you set a target, and Google tries to optimize to meet that target as much as possible.

Unlike Target CPA, for Target ROAS, you set a specific return on advertising spend that you would like to get, and Google will try to get as much conversion value as possible to reach your target. This is a good bid strategy to use when you are trying to get a particular return on your advertising spend, and your products have different values. The fifth bid strategy that is offered by Google is Maximize Conversions.

Google will attempt to get as many conversions as possible given the budget provided. There is an option with this bid strategy to set a Target CPA if you would like, but it is not a requirement. Unlike Target CPA, Google will just attempt to get as many conversions as possible without worrying about how much each of those conversions costs.

Lastly, the sixth bid strategy that is offered is to Maximize Conversion Value. This bid strategy will attempt to get as much conversion value as possible with the given budget. Maximize Conversion Value allows you to set a target return on advertising spend if you would like, but this is also not a requirement. 


Key Takeaways

When it comes to Google Ads, there are two ways to go about bidding for your ads, manual bidding or automated bidding. Manual bidding gives you more control as you get to set each cost-per-click bid for all of your ads, while automated bidding uses smart bidding to set the most effective bids given the bid strategy. With smart bidding, Google is able to take multiple factors into consideration for every bid, which makes this bidding process typically more efficient.

With automated bidding, there are six different bid strategies that you can choose from based on your goals. The six strategies are Maximize Clicks, Target Impression Share, Target CPA, Target ROAS, Maximize Conversions, and Maximize Conversion Value. It is important to make sure you have clear goals so that you can choose the best bid strategy that lines up with what you are trying to accomplish.

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