4 Key Benefits of Automated Bidding for Google Shopping

If you’ve set up and run ads on Google, chances are you’ve come across their automated bidding strategies. Unlike manual bidding, which allows you to manually set a bid for each product within your Google shopping campaign, automated bidding does just as the name suggests: it helps you automate your shopping campaigns and lets Google set bids for each campaign, depending on the campaign’s goals. 

According to Google, “Smart Bidding is a set of automated bidding strategies that use machine learning to optimize for conversions or conversion value.”

We’ve implemented automated bidding for many of our clients. While Google’s smart bidding doesn’t make sense for every client, we’ve seen great success with it for many.

Need help setting up your Google Shopping campaigns? Contact The Media Captain!

When Should You Use Automated Bidding?

In order for Google’s automated bidding to work effectively, you want to make sure you have data within your campaign so that Google’s algorithm can make informed decisions about your bids. A general rule of thumb is that it’s a good idea to start with manual bidding for the first 30 days of your campaign and then switch over to automated bidding, once the campaign gets some data behind it.

If you only have a few products within your Google shopping campaigns, it may make more sense to use manual bidding, as this will allow you to set specific bids on every product. With a small number of products, manual bidding is very manageable and can be advantageous, as it gives you more control. We tend to use automated bidding with clients who have a ton of products and manually making adjustments isn’t realistic.

Learn More: When to Manually Adjust Bids on Google Shopping

The Different Types of Automated Bidding Strategies

If you’re planning to use Google’s automated bidding strategies, you’ll have some choices to make. There are several different strategies to choose from. If you’re looking to increase sales or traffic to your website, Maximize Clicks, Maximize Conversions, and Target CPA are the best strategies to choose from. If you’re looking to increase profit, stick to Target ROAS or Maximize Conversion Value.

Maximize Clicks

With the maximize clicks strategy, the main goal is to increase site visits. Google is aiming to get as many clicks to your campaigns as possible. This is a great strategy to use when you’re just starting out and you want to start gathering search term data or drive a ton of traffic to your site. Make sure you’re keeping an eye on your budget and being diligent about setting negative keywords with this strategy. Driving a ton of traffic to your site is great, but you want to make sure you’re not wasting your budget on low quality traffic. If you’re seeing that a lot of garbage search terms are pulling in, this may not be the best bidding strategy for you.

Maximize Conversions

Once again, the name says it all here. With maximize conversions, Google will aim to get as many conversions for your campaigns as possible. This automated bidding strategy focuses on targeting those who are more likely to convert and is less focused on driving a lot of traffic to your site. 

Target CPA

Target CPA or cost per acquisition aims to get you as many conversions as possible at the target CPA that you set. For example, if you know the cost it’s profitable for you to acquire a new customer, you can set this as your target CPA. 

Target ROAS

Target ROAS (or target return on ad spend) tends to be one of my favorite bidding strategies and is the one that I use most often. With Target ROAS, you can choose a return on ad spend that you’re aiming to achieve and Google will work to hit that return. If you know that you need a 3 to 1 ROAS to be profitable, for example, you can set your target return on ad spend to 300%. The  issue we run into with this strategy is that if you set your target ROAS too high, you won’t end up hitting your budget. We always start this slightly lower than we’re really aiming for and slowly work our way up as the campaign continues performing well.

Learn More: How to Optimize Google Shopping Ads for a Better ROAS

Maximize Conversion Value

This bidding strategy aims to get the most conversion value at the budget you have set. With this strategy, you can also set a target ROAS.

Target Impression Share

The goal with target impression share is to increase the visibility of your website. Google will aim to show your ads on the top of the page or at the top of the search results, depending on your selections. This bidding strategy is only available for Google search campaigns, not shopping, but I still wanted to mention it here.

What are the Benefits of Automated Bidding for Google Shopping?

Saves Time

Likely the biggest advantage of automated bidding within your Google Shopping campaigns is that it will save you a ton of time. Having to go into every campaign and manually adjust bids is very time consuming, and sometimes not feasible. If you have a lot of products that you’re working with, making manual bid adjustments can get to be unmanageable and unrealistic. Google’s automated bidding strategies takes the work off of your plate and automates the entire process. While there are still adjustments you’ll need to make within the campaign, such as adding negative keywords, the bulk of the work will be done for you.

Use Google’s Advanced Machine Learning

There’s no denying how smart Google is. Why not take advantage of their machine learning and use it to your benefit? Based on their algorithms, Google will use your bidding strategy to predict how much to bid within your campaigns. Of course, at the end of the day, Google wants you to spend your budget and sometimes that can come at the cost of campaign performance. Even though the bidding strategies are automated, you’ll still want to keep a close eye on their performance. 

Ensures Changes are Constantly Taking Place in Your Account

Chances are that managing your Google shopping campaigns isn’t your only responsibility on a day to day basis and it’s easy to become inconsistent with logging in and making enhancements. With Google’s automated bidding strategies you know that changes are constantly taking place within your account and this is something you can take off your plate. This is the beauty of automation! 

Can Help Improve Campaign Performance

When you’re consistently working to improve your campaigns and Google is making regular enhancements to your campaigns based on new data coming in, the hope is that campaign performance will improve. Again, this relies on you making sure you’re regularly logging in to check performance and make your own adjustments, but using these automated bidding strategies should improve performance. If you’re seeing a decrease in performance, chances are you may be using the wrong strategy and need to re-evaluate.

Learn More: What is a Good Return on Ad Spend for eCommerce?

In Closing:

  • Automated bidding works very well when you have a lot of products that you’re managing and you have some data within your campaign already.
  • Make sure you’re choosing the smart bidding strategy that makes the most sense for your campaigns.
  • Google’s automated bidding has a lot of benefits including saving time, taking advantage of Google’s advanced machine learning, ensuring changes are always taking place within your campaign and improving campaign performance.

Stefanie Parks

Stefanie is the Co-Founder of The Media Captain. She's currently the CEO of DermWarehouse, The Media Captain's in-house eCommerce brand. Stefanie is an expert on all things eCommerce. She's grown DermWarehouse to beyond $5 million in annual revenue and has a customer base beyond 250,000. Stefanie provides helps with eCommerce strategy development for The Media Captain. She's a frequent contributor onto the TMC blog.

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