7 Automated Bidding Pitfalls To Avoid

Like it or not, Google’s smart bidding feature is here to stay. Having dabbled with the smart bidding feature with my fair amount of successes and failures, I had the pleasure of being invited to Google’s Automation Summit in October 2019.

Google Summit

So, I’m not going to bore you with all the details of smart bidding, how each one works and best practices for implementing. (that is maybe for another post with some real-world examples – nice idea!) Instead, I’m sharing a nice table to outline when, how & why to implement the four main automated strategies. In a nutshell, if you are collecting revenue stats then its max conversion value followed by target ROAS. If you’re doing lead generation, then it is advised to go with maximise conversions and then getting yourself to target CPA.

Smart Bidding Guide

So, once you’ve decided and gone “all in” – you sit and wait (for 72 hours) expecting to see an avalanche of sales or enquires, however, this does not happen. After a week or two, you lose patience and quit. This makes it quite hard for automation to “do it’s thing” as it needs more time and also the correct setup. Therefore the main takeaway from the automation summit was these six common pitfalls that are guaranteed to lead you to failure in your good intentions of welcoming smart bidding into your arms.


The Seven Pitfalls

1. Using Too Aggressive of CPA or ROAS Goal

Remember, you need to be realistic with your automated bid targets. If your account has been converting consistently at £10 per conversion and you set a target CPA of £5, this will surely kill the campaign as you are asking the robot to do something that it doesn’t know how to do. Instead, make sure the Target CPA or ROAS is realistic! Use the Google Ads-UI recommended CPA/ROAS goal to start. Once this is performing consistently, then look to move your bids to squeeze better performance.

2. Analyzing performance when the strategy is still in the learning period

Let’s now forget that this is a machine learning algorithm, so the more stable, long-term data points it has, the better it can form predictions and optimize for conversions. It cannot do this overnight and will be learning and experimenting with bids on your behalf. So, in this learning phase, it really is pointless looking at the performance during this period.

Keep an eye on the bid strategy report to see how the bidding is performing and starting to fall in line.

Target ROAS Bid Strategy Report

3. Overlooking high conversion delay when analyzing the performance

Ever looked at your conversion delay/lag reports? Especially if you are in the lead gen field this can sometimes be quite a long delay of days even weeks.

Long conversion delays can make it seem like Smart Bidding is performing poorly when measuring a recent time frame. Factor in this conversion delay when you finally get down to measuring the performance.

I like to segment my data within the main table by conversion delay to give me a good idea and from there get a % of conversions that take place after the first 24 hours. This helps me to determine the best time frame to be looking at once smart bidding is enabled.

4. Looking at the wrong metrics

Google Ads is full of metrics that you can look at and analyse until there is no more oil left in your lantern. When considering automation it is quite easy to get sidetracked and start looking at the wrong metrics and start to make panic adjustments, and the road from there only spirals downwards.

If a campaign is using Smart Bidding, you should look at conversion-based metrics to determine success. Forget about looking at CTR, impression share, etc. Instead look at conversions, cost per conversion, conversion value, conversion value/cost, etc.

I like to create a set of conversion based columns in my reports and only determine success or failure from these stats.

5. Making constant changes to campaigns

This is one pitfall that many PPC marketers tend to fall right into. Your reasons may be legitimate as the board are needing answers right now and can’t comprehend why performance has deteriorated. This is where your experience should kick in and you have to assure your board that the strategy is learning. If you have done your maths correctly then this is something that the board would have expected anyway, hence no dramas!

Major changes may set the Smart Bidding strategy into the learning period and you will never see the light of day from the bidding strategy.

So, control your emotions and DON’T MAKE ANY RASH CHANGES

6. Hoping to achieve a high impression share

This one kind of ties in with point number 4 where you may be looking at impression share stats and getting puzzled as to why your impression share has gone down!

The reason is simple. The automated bidding will be looking to maximise your conversion metrics and not your impression metrics. Your ad will be showing in auctions where Google predicts that a conversion may be likely.

Given enough time you will not even be looking at impression share as you are achieving your desired CPA or ROAS goals!

7. Budget is not 5-10x the Target CPA

This is one that gets overlooked time and time again. Many advertisers don’t leave enough headroom in the budget for the AI to learn. Not having this headroom will not allow the algorithm to bid high enough when a conversion is extremely likely due to constraints on the budget. When setting up make sure that your campaign budget is ten times the target CPA.

And there you have it, follow the above guidelines and you will be well on your way to automation success. Remember that automation in PPC is here to stay and should be embraced. I certainly don’t want to spend all my time on bidding, there are so many other facets to look at within PPC like ad testing, audiences, conversion optimisation, search term refinement.

Happy bidding!