Smart Bidding & Campaign Suggestions by Google: Accept or Deny?

Google nowadays offers various bidding strategies in Google Ads to help you save time and improve performance. There are specific pros and cons of each automated bidding strategy. In advance, Google also offers a smart campaign that controls all types of ads & optimization options including where to serve ads to attract customers and increase sales based on business types. 

While I am optimizing the ads manually, one or another way Google and their support team is pushing every advertiser to go with automated bidding options. 

Google is aggressively promoting its automated algorithms for PPC to Marketers. For almost every client of ours, at least once in the last 12 months, we have had a call with Google where they have suggested us to upgrade our campaigns to ROAS bids or Smart Campaigns or both. And they don’t stop there. They’ve suggested this option in many ways.

1. Google Ads Recommendation:

Google rolled out an optimization score feature a long time back that shows recommendations for campaign optimization and suggests various changes to improve the campaign score. One of the major recommendations among others is to change the bidding strategy to automated. If any campaign run on automated bidding for some time then that automated bid is pushed into recommendations. As shown in the screenshot below.

Google ads also suggest automated bidding options in notifications. 

2. Google Support Team Call: 

Google appoints a dedicated account manager for every account and partner account. So Google’s support team frequently calls you to help optimize your campaigns and suggest various changes to improve the conversion. I noticed that the support team suggested adopting the smart bidding and smart campaign during those conversions. 

3. Google Partner Guidelines

Recently, Google has also revised the new google advertising partner guidelines and added that partners are not required to apply all recommendations of the system but a minimum 70% optimization score is required for the Google Partner badge. And guess what? You have to accept their recommendations to reach that score and maintain a partner badge. 

Google stats on Smart bidding:

Smart bidding is a subset of automated bidding strategies that use machine learning that works for small to large businesses. To understand the business nature, Google recommended that the system required a minimum of 30 conversions recorded in the system in the past one month for targeted CPA strategy. Whereas targeted ROAS required at least 50 conversions in the past one month for better performance.

If your account didn’t have enough conversions, the smart bidding is not going to work for your business. 

Our Experiment

We, Biztech, are a Google advertising partner company and manage campaigns for our overseas clients from across the world. 

Many of our clients managed their campaigns themselves and adopted Google smart bidding. When we connected with them, unanimously they said that Google smart bidding option increases cost by double or triple without any major change in conversions or revenue. 

We have tried A/B testing for various clients from different industries. In the majority of the cases, the automated bidding process not only failed us but also increased the clients’ costs.

1. Run Manual and Automate AdsParallely (Shopping Campaign): 

We thought to copy an existing campaign and run parallel ads for one of our clients and check the results of manual vs automated bidding. 

We chose our top-performing product campaign and ran it for 15 days in parallel mode whereas one campaign was running with manual bidding and another in the Maximum conversion model.

The results were horrible as shown in the screenshot above. We were getting double impressions and clicks at the same cost. The average CPC went down ~50% in smart bidding but the conversion values were ~3X down compared to manual bidding. 

2. A/B Testing via Campaign Experiments (Search Campaign):

For another client, we set up a campaign splitting it into 50% automated and 50% manual bidding and ran the experiment for several days. 

As a result, we got an increase in clicks by ~50% whereas the cost also increased by ~4X during this period. The smart bidding increased the average CPC for getting impressions but did not generate any conversion.

3. Target ROAS

We created a campaign with the target ROAS strategy to check if the campaign actually gives an ROI that we set in a campaign or not? 

It is bid based on a target return on ad spend (ROAS) that we need to set while setting up the campaign. We had set it up at 200% (2X) and ran the experiment for 2 months. 

As a result, the campaign generated $2696.15 revenue at a cost of $3881.35. It means the campaign did not generate conversion value as we’d set. 

It means if your campaign is running with any automated bidding strategy, you will be charged for every click not based one the bidding strategy you choose.

Reasons to not Choose Google Ads Automatic Bidding

1. Increase in impressions without an increase in conversions
2. Not getting continue good ads position
3. No direct control on Keywords match type
4. Increases the cost
5. No cost/impression convert on converted keywords

Let’s think with a practical scenario:

Three businesses (A, B and C) are running on the same vertical and also have80% the same product catalog. Let’s imagine that they all started Google paid marketing with smart bidding/campaigns.

What could be the result? 

1. All ads are at first position: practically it’s not possible
2. The ads are placed at first position turn by turn: They all will get the same impressions but revenue & clicks share gets distributed.
3. In case, If A is the popular brand: Even with lower ad positions, it’s generating good sales.

To have control is a human need. More so, as an apt marketing expert, you would like to have the same kind of control while running your campaigns. You lose that "control" while running the bids on auto-mode. Moreover, if multiple brands are running ads through automated triggers, it is an obvious scenario that the average bid per click is going to increase and your cost-effectiveness goes for a toss. 

Most importantly, no matter how many brands sell the same products, not all have the upper hand for all. As a product expert for your brand, you are a better judge to decide which product or which keyword you should go for higher bids and where you settle for the second position. Only through manual bidding, you can have this level of control.  

Recommendations:

1. Don’t blindly follow Google Ads recommendations.
2. Run automated bidding on the brand campaign only
3. Works for less competitive businesses
4. Say no to the Google support team, if you feel, it could not work.
5. You will be charged for every click whatever automated bidding strategy you choose.
6. Run A/B testing automated vs manual bidding.

Use Smart Campaigns and Bidding, but in a Smart Manner.

Don’t take all the above insights in a negative manner. Automated bidding strategy is one of the effective methods to generate good returns with fewer efforts, but you need to be thorough about the business model and marketing strategy. If you expect the unexpected ROI from smart bidding, it will never happen. 

It’s just trial and error stuff for various verticals and marketing strategies. I personally recommend doing A/B testing with various options for better ROI.

We have several accounts that are running fully with smart bidding and smart campaigns, generating more than 4X revenues.

If you decided to go with the automated bidding, no worries, just try it out. You need to monitor it closely in a day to day manner. I have had campaigns with automatic bid strategies that performed very well initially but after 3 months the performance changed and ROI decreased up to 50%.

If you are also running a campaign with automated bidding and not getting good ROI, and want to try various marketing options, feel free to contact or PM me over LinkedIn. 

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