What are the pros and cons of using automated bidding strategies for display ads? (2023)

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The benefits of automated bidding

One of the main advantages of automated bidding is that it can save you time and effort. You don't have to manually monitor and adjust your bids for each ad group, keyword, or placement. Instead, you can let the system do the work for you, based on your chosen strategy and target. This can also help you avoid human errors and biases, and focus on other aspects of your campaign, such as creative and messaging.

Another benefit of automated bidding is that it can improve your performance and efficiency. Automated bidding can leverage historical and real-time data, as well as advanced algorithms, to find the optimal bid for each auction. This can help you maximize your conversions, clicks, impressions, or revenue, depending on your objective. It can also help you reduce your cost per action (CPA), cost per click (CPC), or cost per thousand impressions (CPM), by avoiding overbidding or underbidding.

The drawbacks of automated bidding

However, automated bidding also has some limitations and challenges. One of them is that it requires a sufficient amount of data and conversions to work effectively. If your campaign is new, low-volume, or seasonal, you may not have enough data for the system to learn from and optimize your bids. This can lead to poor results or wasted budget. Therefore, you may need to run your campaign for a while, or use a manual or enhanced bidding strategy, before switching to automated bidding.

Another drawback of automated bidding is that it can reduce your control and transparency. You may not be able to see or adjust how the system is bidding for each ad group, keyword, or placement. You may also not be able to set specific bid adjustments or limits for certain criteria, such as device, location, or time of day. This can make it harder to test and optimize your campaign, or to align it with your business goals and priorities.

How to choose the right automated bidding strategy

Deciding which strategy to use for your display ads depends on a variety of factors, such as your campaign goal, budget, audience, and competition. Target CPA is a strategy that focuses on getting as many conversions as possible while keeping a target cost per action. This can be used if you have a specific conversion goal and a fixed budget. Target ROAS is another option that focuses on getting as much revenue as possible while maintaining a target return on ad spend. This is best for those with a specific revenue goal and a variable budget. Maximize conversions is ideal for those with a flexible conversion goal and a fixed budget, while maximize conversion value is better for those with a flexible revenue goal and fixed budget. Maximize clicks is designed to get as many clicks as possible within your budget, and vCPM is best for those with brand awareness goals and fixed budgets.

How to monitor and optimize your automated bidding

Once you have chosen an automated bidding strategy for your display ads, it's essential to monitor and optimize its performance. You should track key performance indicators (KPIs), such as conversions, revenue, CPA, ROAS, CTR, CPM, and viewability. You can use Google Analytics or Google Ads reports to analyze your data and identify trends and insights. It's also important to review and adjust your campaign settings, such as budget, target, audience, creative, and frequency. Additionally, you can test different automated bidding strategies, ad groups, keywords, and placements with the draft and experiment feature in Google Ads. Furthermore, you can use the bid simulator tool in Google Ads to compare your automated bidding performance with other bidding options. Automated bidding strategies can be a great way to optimize your display ads performance if used correctly. Understanding the pros and cons of these strategies and how to choose the right one for your campaign is key to making the most of your display advertising efforts.

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