Manual vs Automatic Bidding in Google Ads - Google Ads Training Series 2020

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Now, how do we control how much we are willing to spend on a particular keyword or set of keywords? Our Bidding strategy in our campaigns. Here's the thing about auctions though. If you go to an auction for high end art, but you are only willing to bid $100 for a piece of art, I promise you won't ever win an auction. That's just the nature of auctions. The real price of that piece of art will be paid based on spot demand on the basis of 1 supply. Now value is subjective in art, as it is in digital advertising. One site may convert 45% of their visitors while another might only convert 4. Which then means that a click is 11.25x more valuable to the first site over the second. Thus, the first company SHOULD be willing to pay more for the traffic.

Bidding for your campaign can be done by allowing Google to choose (which is recommended by Google), or by setting your own bid via bid selection. If you choose to allow Google to do this, simply tell Google what to focus on and if you'd like give them a target cost per action and they will do everything in their power to make it happen for you. If you like to live life on the wild side or are just a complete control freak like me... click on Or, select a bid strategy directly!

Google gives you the options of: Target CPA, Target ROAS, Maximize Clicks, Maximize Conversions, Maximize Conversion Value, Target impression Share, and Manual CPC.

Now, the only true control at the bid level you have is inside of Maximize clicks or Manual CPC. These allow you to set the maximum CPC you are willing to spend to receive a placement on the SERP. These two options allow you to take your campaign by the reins and ride! The problem? You will be playing often with the proper maximum to see the best cost per click balanced by the most effective click price to get the desired action on your website. Even though I am a control freak, if you are just starting out and don't have hours a day dedicated to analyzing results, my suggest is to stick to allowing Google to maximize conversions or conversion value.

Once you have established what your company is capable of doing for a Return on Ad Spend, or ROAS, you can switch to target ROAS or target CPA (as you can get your cost per action throug knowing ROAS, they aren't very different statistics. They use the same variables for calculation).

If you insist on adjusting CPCs, here is the method that I used to measure the efficacy of your changes. Run your advertising campaign until you have 5 conversions and measure the CPC required to acquire those 5 conversions. Once you know your CPC and the CPA for a conversion, adjust your bid by 10% higher or lower. At the new maximum, repeat this process. Eventually you will see that your changes in CPC will help you find a new equilibrium. If you notice that you aren't having any changes in your CPC or CPA for a conversion, then you are above your maximum required CPC and you must lower your CPC more to find when your actual bid starts to be impacted. From a far enough distance, this will look like a parabola, but on the shorter term it looks more like steps. Sometimes those steps are at 1-2 cent increments, other times they are dollars at a time.

Not all clicks are the same! Some clicks are useless and expensive, some are cheap and effective. You won't know for certain how valuable a certain CPC level is until you've tested it out thoroughly. If you let Google do this, you won't ever really know the best CPC for your campaigns, but Google will do its best to find it for you and keep you there.