Google Ads is a powerful tool for increasing conversions and generating traffic. However, manual bid management can be complex and time-consuming. That’s where automatic bidding comes in. They enable you to optimize your campaigns by automatically adjusting your bids according to your defined objectives and real-time data.
What are automatic bids in Google Ads?
Automatic bidding in Google Ads is a powerful tool that enables advertisers to automate the management of their advertising bids in real time. Unlike manual bidding, where you have to set a precise amount for each click or action, automatic bidding uses artificial intelligence and machine learning to optimize your bids based on behavioral data and marketing objectives. This allows advertisers to focus more on their overall strategy rather than constantly adjusting bids.
Google analyzes millions of data points for each auction, and this data is used to assess the chances that a given interaction will lead to a conversion. This system enables Google to maximize advertising ROI while minimizing unnecessary expenditure. As a result, automatic bidding has become a must for companies looking to improve the efficiency of their advertising campaigns, while automating the bid management process.
Definition of automatic bidding
Automatic bidding in Google Ads refers to a system in which Google automatically adjusts your ad bids based on user data and real-time behavior. Unlike manual bidding, where the advertiser defines the amount to be spent for each click, automatic bidding optimizes bids to maximize results in line with the advertiser’s predefined objectives, whether in terms of clicks, conversions or conversion value.
Google Ads relies on several real-time signals to adjust bids and achieve the best possible results:
User location : where the user is at the time of the search.
Type of device used : mobile, computer or tablet.
Time of day : Google adjusts bids according to the time of day when users are most likely to convert.
Search history : the user’s past behavior and previous searches.
Demographics : such as age, gender and other relevant criteria.
Objectives of automatic bidding
The aim of automatic bidding in Google Ads is to optimize the overall performance of advertising campaigns while maximizing the use of the advertising budget. This optimization relies on Google’s ability to analyze data in real time and adjust bids to generate the best possible results according to the specific objectives defined by the advertiser. These objectives may vary according to the strategy chosen and the type of campaign.
Cost-per-click (CPC) optimization
One of the most common objectives of automatic bidding is to minimize the cost per click while maintaining high results. CPC is a key metric, as it determines how much an advertiser pays each time a user clicks on an ad. The aim of this optimization is to reduce the cost of irrelevant clicks while maximizing those that are likely to lead to a conversion.
In this context, Google adjusts bids for specific keywords or audiences according to the likelihood that the click will result in a desired action, be it a site visit, newsletter sign-up, or other important interaction. By optimizing CPCs, advertisers can reduce the waste of their advertising budget while achieving more effective results.
Cost-per-acquisition (CPA) optimization
Cost per acquisition (CPA) is another critical metric for advertisers looking to maximize their ROI. Target CPA allows Google to adjust bids to ensure that each conversion (e.g. a purchase or lead) remains within a specific cost range defined in advance by the advertiser.
The aim here is to control expenditure while guaranteeing an optimum volume of conversions. With the CPA-based bidding strategy, Google uses user behavioral data to adjust bids to reach this target cost. For example, if a conversion usually costs €10, the algorithm will try to keep the CPA around this amount while maximizing the number of conversions.
Maximizing return on ad spend (ROAS)
Return on ad spend (ROAS) is an even more advanced strategy, where Google adjusts bids to maximize the revenue generated in relation to each euro spent on advertising. This approach is ideal for e-commerce campaigns where the value of conversions varies (for example, selling products at different prices).
Target ROAS focuses not only on the quantity of conversions, but also on their value. Google therefore analyzes the chances that each click or interaction will result in a high-value conversion, and adjusts bids accordingly. For example, if a product costs €100, the algorithm will look to generate a return of €200 or more, depending on the ROAS target defined by the advertiser.
Summary of objectives:
CPC (Cost per click) : Reduce the cost of clicks while obtaining relevant results.
CPA (Cost per Acquisition) : Maintain a stable acquisition cost for each conversion.
ROAS (Return on Ad Spend) : Maximize revenue per euro spent by adjusting bids according to the value of conversions.
These objectives enable advertisers to optimize their Google Ads campaigns according to their specific priorities, whether to generate more traffic, maximize the volume of conversions or increase the value of sales.
Automatic bidding strategies
Google Ads offers a comprehensive set of automatic bidding strategies designed to help advertisers optimize their ad campaigns according to their specific objectives. Whether your priority is to increase the number of conversions, maximize the value of those conversions, or simply generate more traffic, there’s a strategy to suit your needs. These strategies are particularly effective because they rely on machine learning algorithms, capable of analyzing numerous signals in real time, such as the user’s device, browsing behavior and even location.
The main aim of these automatic bidding strategies is to maximize advertising campaign results while minimizing the effort required to manually adjust bids. Here’s an overview of the different strategies offered by Google Ads.
Target CPA (Cost per Acquisition)
The Target CPA strategy enables Google to automatically adjust bids in order to obtain the highest number of conversions while respecting a pre-defined average cost per acquisition. The aim is to ensure that each conversion (whether it’s a purchase, a sign-up, or a quote request) costs on average the amount you’ve defined.
This strategy is ideal for companies wishing to generate leads or sales at a controlled cost, avoiding large fluctuations in the cost per conversion. It’s a perfect solution for campaigns aimed at long-term growth, where the cost of acquisition needs to remain under control while increasing conversion volumes.
Target ROAS (Return on Advertising Expenditure)
The Target ROAS strategy is designed to maximize the value of conversions, seeking to generate the best possible return on advertising spend (ROAS). With this strategy, Google automatically adjusts bids to help you achieve a predefined ROAS percentage. For example, if your target ROAS is 500%, Google will optimize your bids to generate €5 of revenue for every €1 spent on advertising.
This strategy is particularly useful for e-commerce campaigns, where the value of conversions can vary considerably from one product to another. It enables companies to optimize their spending according to the value generated by each conversion.
Maximizing conversions
The Maximize Conversions strategy automatically adjusts bids to achieve the highest possible number of conversions within your defined budget. Unlike the Target CPA strategy, this method doesn’t set a specific cost per conversion. Instead, Google allocates your budget to generate the maximum number of conversions possible, regardless of their individual cost.
This approach is particularly effective for advertisers who want to rapidly increase the volume of their conversions (sales, leads, registrations) without having to worry about a target cost per conversion. However, it can lead to higher costs per conversion if not closely monitored.
Maximize conversion value
The Maximize Conversion Value strategy is similar to the previous one, but with a focus on the total value generated rather than the number of conversions. This strategy aims to optimize bids to obtain the highest possible conversion value (i.e., the total value of sales generated by the campaign).
It’s ideal for companies wishing not only to increase the number of conversions, but also to maximize the revenue generated by these conversions. It’s a strategy commonly used in e-commerce campaigns, where some conversions may be more profitable than others, depending on the products sold.
Maximize clicks
The Maximize Clicks strategy is designed to generate as many clicks as possible within your budget. Unlike strategies that focus on conversions or the value of conversions, this strategy doesn’t concentrate on direct conversions, but rather on driving traffic to your site.
It’s ideal for campaigns whose main objective is to increase brand awareness or encourage more visitors to explore a website. This may include product launch campaigns or promotional events where the aim is to attract as many visitors as possible.
Each of these automatic bidding strategies meets specific marketing objectives and can be used to maximize the effectiveness of your advertising campaigns. Whether you’re looking to generate more conversions, maximize the value of those conversions or simply increase traffic, Google Ads automatic auctions offer optimized solutions to help you achieve your goals in an efficient, automated way.
Benefits of automatic bidding
Automatic bidding in Google Ads offers a range of significant benefits that make managing advertising campaigns more efficient and less time-consuming. By leveraging the capabilities of artificial intelligence and machine learning, these auctions enable you to optimize your ads based on real-time data, while achieving specific objectives such as ROI, maximizing clicks or increasing conversions. Here are some of the key benefits.
Time savings
One of the major advantages of automatic auctions is the time they save. Traditionally, bid management required careful analysis of campaign performance, followed by frequent manual adjustments of bid amounts for each keyword or ad group. This process could become very complex and required constant monitoring.
With automatic bidding, Google adjusts bids for you, based on available data and real-time performance. This frees you from the need to make regular manual adjustments and allows you to focus your efforts on other aspects of your marketing strategy, such as landing page optimization or content creation. By reducing the time spent on bid adjustments, you can improve the efficiency of your campaign management.
Real-time optimization
Automatic bidding in Google Ads harnesses the power of real-time data to adjust bid amounts based on multiple factors that influence the likelihood of conversion. These factors include the user’s search history, their geographic location, the type of device they’re using (computer, mobile, tablet), and even the time of day.
Real-time analysis enables Google to modify bids instantly for each user based on these signals. For example, if someone with a strong conversion history for your product performs a search on a mobile device at an opportune moment, Google can automatically increase the bid to maximize your chances of conversion. This ability to optimize bidding dynamically and reactively boosts advertising performance and improves overall ROI.
Improved return on investment (ROI)
Another key benefit of automatic bidding is its ability to improve return on investment (ROI). By intelligently adjusting bids according to conversion probability or conversion value, Google helps you spend every euro optimally. The algorithm adjusts bids to pay only for what’s needed to achieve a result, avoiding overspending on clicks or impressions that have little chance of converting into sales or leads.
This often leads to better budget management and improved campaign performance. For companies looking to maximize conversions while reducing advertising costs, this approach is particularly advantageous. Whether for strategies based on target CPA (cost per acquisition) or target ROAS (return on advertising spend), automatic bid optimization enables a better return on investment by constantly adjusting bids according to the results obtained.
This makes automatic bidding an essential solution for companies seeking to optimize their advertising campaigns while minimizing the time and effort invested in day-to-day bid management. Thanks to their ability to analyze results in real time, and their efficiency in budget management, these auctions deliver more effective results, while freeing up resources for other strategic aspects of marketing.
Disadvantages to consider
While automatic bidding in Google Ads offers many time-saving and real-time optimization benefits, it is not without its drawbacks. It’s essential to understand these limitations before adopting this strategy to ensure that it meets the needs of your advertising campaigns.
Requires sufficient data volume
Automatic bidding relies on the analysis of historical data to adjust bids effectively. Google’s algorithm needs a sufficient volume of conversions or clicks to be able to accurately predict the probability of conversion and adjust bids accordingly. If your campaign doesn’t reach a critical data threshold, Google may find it difficult to optimize your bids correctly.
This can be a problem for :
- New campaigns with no historical data.
- Campaigns with limited budgets or low traffic volumes, where the number of clicks or conversions is not high enough to feed the algorithm.
In these cases, automatic bidding is likely to be less effective, as it lacks the information needed to adjust bids appropriately. One solution is to accumulate sufficient data through initial campaigns, or to use manual bidding first before switching to an automated strategy.
Less control
Another major disadvantage of automated bidding is the loss of control you may feel over your campaigns. When you use this strategy, you leave a great deal of responsibility for adjusting bids to Google. While this can be beneficial in terms of automatic optimization, it also means that you have to trust the algorithm to make the right choices, which isn’t always aligned with your expectations or objectives.
Potential risks include:
- Overspending if the algorithm adjusts bids too aggressively to meet conversion targets.
- Under-performance if bids are not high enough to rank on the most competitive search terms.
- Difficult to react quickly to certain market trends or one-off events, as you can’t manually adjust each bid according to these variables.
So it’s essential to monitor performance and review results regularly to ensure that automatic bidding remains in line with your campaign objectives. You can also combine these strategies with manual adjustments for the most critical aspects of your campaigns.
Although automatic bids offer powerful automation and performance optimization, they are not always the ideal solution in every situation. Understanding their limitations and knowing when to use them will enable you to maximize their effectiveness while minimizing risk.
Tips for optimizing automatic bids
Although automatic bids in Google Ads can offer significant benefits, it’s important to optimize them correctly to maximize their performance. Here are a few practical tips to ensure that your ad campaigns benefit fully from this feature.
Configure conversion tracking correctly
For automatic bidding to work optimally, it’s essential that conversion tracking is correctly configured. Without it, Google’s algorithm won’t have the information it needs to adjust your bids according to the actual performance of your ads.
Poorly configured conversion tracking can lead to miscalculations, resulting in poorly adjusted bids and a reduction in the effectiveness of your campaigns. Make sure that :
- Each conversion type (sales, registrations, quote requests) is well defined and accurately tracked.
- ROI is reliably calculated for each campaign.
Precise configuration allows Google to collect the data it needs to fine-tune and maximize your results.
Set realistic objectives
Strategies such as target CPA or target ROAS need to be defined on the basis of your historical data and past performance. It’s crucial to set achievable targets, as unrealistic expectations can lead to underperformance.
For example, if you set a target CPA too low, the algorithm may underbid, reducing the visibility of your ads and resulting in low conversions. Similarly, aiming for a ROAS that’s too ambitious could limit bidding, preventing your ads from being displayed often enough to generate conversions.
Setting targets in line with your previous performance enables the algorithm to work more efficiently and deliver results in line with your expectations.
Test different bidding strategies
It’s important not to settle for just one bidding strategy. Google Ads offers a number of different automatic bidding strategies, each of which can deliver varied results depending on your specific objectives, whether to increase clicks, maximize conversions or improve ROI.
For best results:
- Test several strategies according to your campaign needs (e.g. target CPA, target ROAS, maximize conversions).
- Monitor performance closely to identify the strategy that delivers the best ROI.
By analyzing the results of your tests, you’ll be able to adjust your strategies and choose the one that best suits your objectives. And don’t forget to test these strategies on different types of campaigns (display, search, shopping) to maximize their effectiveness.
Automatic bid optimization is an ongoing process, requiring regular monitoring and adjustments to ensure that your campaigns remain aligned with your objectives. The right conversion tracking setup, realistic goals and regular testing will help you get the most out of automatic bidding and maximize your advertising results.
Conclusion
All in all, Google Ads automatic bidding is a great way to optimize your ad campaigns without having to manually adjust each bid. Whether you’re looking to maximize clicks, conversions or ROI, these automated strategies adapt to your objectives and leverage real-time data to improve campaign performance. However, to get the most out of automated bidding, it’s essential to set up conversion tracking properly, set realistic targets, and regularly analyze results to adjust settings if necessary.
Would you like us to help you set up your automatic auctions? Contact one of our Google Ads experts today.
