Is Google AdWords Automated Bidding for everyone?

Paid search marketing expert, Pamela Lund, shares her opinion about Google AdWords automated bidding features.

Google recently announced the removal of Target Search Page Location and Outranking Share as part of their automated bidding functionality in AdWords. They are replacing it with Target Impression Share. I reached out to a paid search expert, Pamela Lund, to get her impression about these changes. Instead of a brief quote about the change, she sent me some detailed thoughts about AdWords’ automated bidding in general. What she sent me was so good that I wanted to share everything she wrote with you.

I can’t see any case in which I would use absolute top impression share as a bid strategy for the mid-sized businesses I manage ads for. Absolute Top as a bidding strategy brings back memories of the old ad auctions in which we were all bidding $100 a click to get our clients’ ads in the top position, hoping we had enough budget to outlast the competition so they’ve given up or run out of money before the month was over. It wasn’t sustainable, profitable, or the best result for the end user.

If Google is really in the business of presenting the best result for the user, as they claim to be, letting advertisers target by position won’t achieve that goal. Just because a brand has the largest budget and can bid the most to have their ads shown in the top slot more than everyone else doesn’t mean they are the best result for that search. I also don’t think this is the best thing for advertisers since the only ones that would bid for absolute top rather than to meet their KPIs are big brands that have the budget to force out their competition or ones that don’t know what they are doing and think being shown at the top more often than not is a good thing.

I look at impression share and average position as just two of many indicators of how much room I have to scale a strategy, not as optimization metrics themselves. If a keyword or campaign is meeting the goals I have set for it and I want to scale, I’ll use impression share to determine if I can simply by bidding or budgeting more or if I need to launch new strategies. Average position served a similar purpose and both metrics need to be taken in context with performance. If I’m only getting 20% impression share on a keyword and I’m not getting the ROAS that I need from that keyword, I’m not going to bid more just to get greater impression share because that traffic isn’t converting profitably anyway. So, I can’t imagine optimizing for absolute top unless I had a client who converted at such a high rate that I needed to get every single possible click, not just those that are most likely to take action.

As for automated bidding in general, I love it when it works. The problem is that it works for high volume, high conversion rate accounts which are typically big brands. I have household name clients and their Shopping campaigns have done exceptionally well since we shifted to using Smart Shopping campaigns. However, for all small- to mid-sized businesses that I manage Shopping campaigns for, Smart Shopping has either performed the same as manually managed Shopping campaigns or significantly worse. This isn’t a flaw in Google’s Smart Shopping campaigns, it’s just a matter of data and right now the system needs more data than most accounts offer. So, if Google forces us into automated bidding before the system can run off smaller datasets that will harm smaller businesses.

My main complaint about Google’s move to more automation is that they are removing some basic controls that we have as advertisers, such as geo-targeting controls and negative keywords in Smart Shopping. We are unable to exclude locations where ads serve when using Smart Shopping campaigns so I have US-based clients that have spent more budget than I’m comfortable with on clicks from outside the US and I have no way to prevent it. I actually gave a client $350 back from my own fees to cover the cost of non-US traffic in one campaign because it was such a high percentage of the overall spend.

Beyond Smart Shopping campaigns, automated bidding strategies such as target ROAS and Max Conversions, typically don’t work on new campaigns. You have to run campaigns with manual bidding strategies for long enough to teach the system what works and what doesn’t. Pushing businesses who may not know any better into using automated bidding strategies in campaigns that are not ready for it will either cause the campaigns to stop serving or to spend too much on traffic that doesn’t meet the KPIs while the system learns.

Automated bidding strategies also seem to have trouble understanding seasonality and market changes. I have a client in the travel space for which I use Dynamic Search Ads optimized for max conversions and it’s quite successful for the majority of the year. But, during off-peak seasons, when weather affects travel, or when there are other things that temporarily affect performance the campaigns take much longer to recover than they would if I was manually changing bids. So, I have to have a hybrid strategy in which I manually manage bids in non-automated campaigns during those times so the automated campaigns aren’t negatively affected when conversion rate and volume return to normal.

Overall I think that automated bidding strategies will be the only option, for better or worse, in the near future but the systems aren’t good enough yet. Google needs to listen to feedback from more than big brands and they need to work with smaller agencies and campaign managers who are seeing the effects of automation firsthand rather than treating us like we’re adversaries who don’t want automation. We don’t want to have to manage bids every day but we need automation to deliver better results than we can in order to champion it.


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