Automatic Bidding

Automatic bidding is a feature offered by many online ad platforms that allows advertisers to set up their campaigns so they will automatically adjust bids to maximise their chances of winning ad space. The advertiser sets a maximum bid value, and the platform will then automatically adjust the bids up or down based on a variety of factors, including the competitiveness of the auction and the likelihood the ad will convert. 

How Automatic Bidding Works 

When an advertiser sets up an automatic bid, they first need to select a bid strategy. There are many different types of bid strategies and each has its own advantages and disadvantages: 

• Target CPA: Target cost-per-acquisition is a strategy that sets your bid to achieve an average cost-per-conversion that is equal to the target CPA you set. 
• Target ROAS: Target return-on-ad-spend is a strategy that sets your bid to achieve an average return-on-investment from your ad spend that is equal to the target ROAS you set. 
• Maximise Conversions: The maximise conversions bid strategy automatically sets bids to help get as many conversions as possible at the lowest possible cost. 
• Enhanced CPC: Enhanced cost-per-click is a strategy that automatically adjusts your bids based on factors that affect conversion rates, such as time of day and location. 

The Benefits of Automatic Bidding 

There are many benefits of using automatic bidding: 

• You can save time: Manual bidding can be very time-consuming, especially if you are running multiple campaigns. Automatic bidding can free up your time so you can focus on other aspects of your business. 
• You can reduce your costs: Automatic bidding can help you reduce your costs by making sure you are only paying the minimum amount necessary to win ad space. 
• You can increase your chances of winning ad space: The platform will automatically adjust your bids based on the competitiveness of the auction, so you have a better chance of winning ad space. 
• You can increase your conversion rates: The platform will also adjust your bids based on the likelihood the ad will result in a conversion, so you can increase your chances of getting leads or sales. 

The Risks of Automatic Bidding 

There are some risks associated with automatic bidding: 

• You could overspend: If you are not careful, you could end up spending more than you intended on your campaigns. It is important to set a maximum bid amount you are comfortable with and to monitor your campaign closely to make sure you are not overspending. 
• Your ads could be less effective: If the platform is not able to accurately predict which ads are more likely to result in a conversion, then your ads may not be as effective as they could be. 
• You could lose control of your campaigns: If you rely too heavily on automatic bidding, you could lose some control over your campaigns. It is important to understand how the bid strategy works and to monitor your campaign closely to make sure it is performing the way you want it to. 

How to Set Up Automatic Bidding 

If you decide you want to use automatic bidding for your Google Ads campaigns, there are a few things you need to do: 

• Select a bid strategy: The first thing you need to do is select a bid strategy. There are many different types of bid strategies, so it is important to choose the one that is right for your business. 
• Set a maximum bid amount: Once you have selected a bid strategy, you need to set a maximum bid amount. This is the most you are willing to pay for a conversion. 
• Monitor your campaign: Once you’ve set up automatic bidding, it is important to monitor your campaign closely to make sure it is performing the way you want it to. This includes monitoring your costs and your conversion rates.