Automated bidding works. It saves time while delivering more-specific bids for each auction you enter in AdWords.
There are an incredible number of moving pieces in the AdWords auction. Automated bidding sets the price that you’re willing to pay based on the most pertinent details of all of that information.
In order to bring some visibility to everything that happens during that process, I got together with the product managers of AdWords automated bidding and answered some frequently asked questions. (You guys seemed to like this approach with my last post about keywords, so I figured I’d start 2015 with another Q&A bonanza.)
1. If I’ve never automated my bidding before, what’s an ideal campaign to start testing with?
This seems like a good place to start since not everyone uses automation. The system works with as few as 15 conversions across your entire account in the last 30 days. More data is better, though, so try to find campaigns with 100 conversions in the last month or so.
You’ll also want to find a campaign that you don’t need to constantly update or tweak. With automation, it’s a good idea to minimize changes (we’ll talk about this more in a little bit). If you know you can’t do that, find somewhere else to test.
2. How does the structure of my account affect automated bidding?
This is going to depend on volume. Like many things in life, the more information you have, the better decisions you can make. If your keyword has a lot of performance data to predict future performance, your structure isn’t going to be a big deal. That keyword is free to fly all on its own.
If there isn’t a lot of data, though, plan on structuring keywords and campaigns by similar conversion rates, while continuing to structure according to relevance as well, of course. (Account structures by conversion rates, value or product lines are all good ideas in general — it stands to reason that it would benefit your automated bidding.) When the system encounters a keyword with scarce performance data, the algorithm will check the conversion rates of your ad groups, then your campaigns.
On a basic level, it’s really just a matter of data. If a keyword has enough on its own, that’s what we’ll use to set the bid. After that, structure will play a part in determining the best way to set that bid.
3. How does the system deal with seasonality?
While automated bidding learns from your account’s history, it doesn’t tie that history to very specific seasonal occurrences (like the Super Bowl or Valentine’s Day). The algorithm that we use has a natural time decay: conversions and data from more recent time periods are more heavily weighted than performance that’s farther back in the past.
The algorithm responds to broader seasonal changes in conversion rate, like the lead-up to the holidays, but automated bidding doesn’t respond to one day spikes in traffic. If you’re offering Valentine’s-Day-only sales, you might want to make your targets more aggressive to accommodate extra traffic and expected increases in conversion rate (higher Target CPA or lower ROAS), or you could even temporarily change to enhanced CPC bidding if the one-day period is expected to vary significantly from baseline performance levels.
4. I’ve heard we should avoid making frequent changes on automated bidding campaigns. Is that for real?
It’s for real. Since the bidding algorithm is responding to a broad array of signals (including things like ad text), each campaign change means that the bidding models will have a period where they need to re-learn. This is true for pretty much any algorithm. One great piece of news on this front is the bid strategy status column that was released last year. You can check that column after any of your changes to know when to expect performance to stabilize.
This doesn’t mean you shouldn’t touch your campaigns that use automated bidding. It merely means you should be thoughtful with your optimizations. Expect about one week for the strategies to stabilize between changes, but that timing can change based on traffic volume and potential conversion delays in your account.
5. How does automated bidding account for my RLSA audience lists?
The system will evaluate each list that is active in a campaign where your automated bidding is active. Adjustments to your bids will be made based on the expected conversion rates for each list, so it’s pretty much like the other factors that our bid strategies take into account (like time of day and device).
One important thing to consider with automated bidding and RLSA is list overlap (the same user appearing on multiple audience lists). Avoid overlap as much as possible. Either just use one RLSA list per ad group or set up mutually exclusive lists that don’t overlap across individual users.
6. How does automated bidding respond to budget limits? If I’m limited, what delivery method should I use?
We don’t recommend having campaigns constricted by their daily budgets if you’re using a target-based strategy (CPA or ROAS). I know many advertisers have a monthly budget and need to stick to it, but with automated bidding you should control spending by changing your bids, not your budget. If you’re on Target CPA, reduce the target. If you’re on Target ROAS, increase the target. Your daily spend should come down as your targets become more restrictive.
When you set a daily bid limit, the algorithm will still calculate the optimal bid to reach your CPA or ROAS target. If you’re bumping up against that daily budget limit, it means you could have potentially received more conversions with a slightly less aggressive target.
And with all that being said, use standard delivery. Ideally, your budget limit (and delivery method) won’t ever come into play; but if you are budget limited, standard delivery will spread your spend out throughout the day.
7. Should I set my CPA/ROAS targets at the campaign or ad group level?
This is going to depend on how you think about your business whether or not you have different goals within a campaign. If you have one type of conversion and that conversion has a single value, set the same target CPA for everything. You should see better performance in the long run. This approach also has the added benefit of making a bidding test easy and straightforward.
If each of your ad groups within a campaign is a different product and those products have different values, though, that ad group level targets are fine.
If you’re already using automated bidding, hopefully this post can make your account’s performance that much better. If you’ve never tried it before, hopefully this can inspire you to give it a shot. As always, please let me know if you have any questions in the comments below.
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