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Automation and machine learning in Google Ads is a hot topic these days in the PPC industry. Many digital marketers have some legitimate concerns about how machine learning will affect their paid advertising.
It can be especially challenging for those of us who run low-volume accounts. Ad accounts are typically low volume either because of having less budget at their disposal or because they target a niche product where there isn’t a lot of search volume.
These accounts are particularly vulnerable to poor performance due to machine learning and smart bidding from Google because of one simple fact. Machine learning draws inferences from patterns in data; low volume accounts have fewer data to draw from. Therefore, the likelihood of the algorithm making less-informed inferences based on random series of events is higher.
There are many ways that automation and machine learning are used in Google Ads. Smart bidding has been around longer than most. While the types of bidding strategies available have shifted throughout the years, the majority of bid strategies available now rely on some form of machine learning.
Understanding Smart Bidding
We’re looking at smart bidding with a specific focus on search campaigns. The current options for smart bidding on the platform at the time of writing are:
- Manual Bidding
- Manual with Enhanced CPC
- Maximize Clicks
- Maximize Conversions
- Maximize Conversion Value
- Target Cost-Per-Acquisition (CPA)
- Target Return on Ad Spend (ROAS)
- Target Impression Share
Target CPA and Target ROAS are being integrated into the Maximize Conversions strategy soon, but for now, they are still individual options on this list.
Manual bidding used to be every PPC advertiser’s go-to and can make sense in uncertain periods or with the launch of a new campaign. However, there are a lot of benefits to using smart bidding. It takes into account the auction-time signals that we cannot possibly calculate when using manual bidding. While manual bidding gives you more control, the insights from machine learning can work in your favor if you have the volume and the data to support these strategies.
Many low-volume accounts don’t have enough data to make smart bidding strategies work intuitively. If you have a low-volume account, it is important to focus on what you can control, ensure account structure is working in your favor, and get curious about the relationship between your specific account and Google’s smart bidding strategies.
Garbage In, Garbage Out
Like any machine learning initiative, smart bidding is only as good as the data that is fed to it. Half of the smart bidding strategies are conversion-based, which means that if you are choosing to use them, you have to be positive that you have set up your conversion tracking properly.
You may want to cross-reference the conversions in-platform with the conversions that are being received on the back end. With the introduction of iOS 14.5, it is normal to have some data loss, as users are now able to opt-out of being tracked on Apple devices. However, you want to be sure you’re not over-tracking and that the conversion tracking isn’t broken.
We have worked with clients where there are known issues with conversion settings that for whatever reason are beyond their control. If you know that your data isn’t correct, don’t optimize for it with a smart bidding strategy that relies on conversion data.
The same goes for the quality of your leads. If you have insights that your call or conversion quality is poor, why would you optimize for it? Why point smart bidding at getting more of what is not helping your business progress?
Sometimes, in low-volume accounts, there can be issues getting enough conversions to feel comfortable using smart bidding at all. Google says that it can optimize based on data from all your campaigns and that even campaigns without historical data may see a performance improvement. However, that can take a while, and low volume businesses may not have the time to support Google’s learning period.
A general rule of thumb we use for implementing these strategies is to have 30 conversions in a month, although that threshold has shifted throughout time and depends on which Google rep you ask.
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Account Structure
Account structure is where you have the most control when it comes to helping smart bidding work best for low-volume accounts. While important for any size of the account, the structure is often underestimated. Because the algorithms need a certain amount of data to maximize their learning potential, we need to set up our accounts in a way that balances that need for volume with the best interests of the business.
Here’s an example. Let’s say you have five campaigns, all set up as single keyword ad groups. Each has a budget of $6 a day, which is translating to one to two clicks. This equates to 30 to 60 clicks a month, and with a conversion rate of 12%, only results in about seven leads. There are a few reasons why a different structure would be beneficial if this account wants to use smart bidding.
Why not take search query data from the last 120 days and consolidate commonly-used search terms into one campaign, simultaneously reducing account geography to the best performing locations. Instead of having $6 across five campaigns, you can have $25 a day which leads to more than enough volume for smart bidding to work effectively.
Since smart bidding uses multiple signals from a variety of sources according to Google, we do not need to do the separating for it on a campaign level. Ask yourself if you need multiple campaigns if they’re targeting similar intent keywords, or if you’d be better served by consolidating them for additional volume and data.
Which Smart Bidding Strategy Should You Use?
Enter our favorite marketing phrase: “It depends.”
My rule of thumb when it comes to smart bidding and low volume accounts is to use caution with the strategies that are aiming to ‘maximize’, as they are likely to spend out of your budget and compromise profitability.
In general, Target CPA and Target Return on Ad Spend offer more control, as you can set a target. And manual bidding offers the most control for new accounts, letting you gather enough data before switching to an automated bidding strategy.
Ultimately, you need to do what is best for your business. Low volume accounts can benefit from a revised account structure, using manual bidding when there isn’t enough volume, and ensuring that the smart bidding strategy selected is driving towards the best possible outcome.