Manual Bidding vs. Automated Bidding: Essential Knowledge

Google Ads is moving with the times, which means advertisers have the option of letting artificial intelligence (AI) take the lead with their pay-per-click (PPC) campaigns. For some people, the idea of handing the reins to the robots is a little worrying, especially if you’re already watching your budget plummet.

In this article, we’ll pit manual bidding vs. automated bidding to discover the key differences, benefits, and drawbacks of both.

Why You Should Know More About Manual Bidding vs. Automated Bidding Strategies

Google prefers higher quality ads, but getting in the good books of the search and advertising giant requires some intelligent investment and smart bidding strategies!

Before you consider your strategy, think about your goals. Typical PPC campaign goals include the following:

• Increase brand awareness/online visibility.
• Improve lead generation.
• Increase conversion rates/sales volumes.

Regardless of what your goals are, you’ll need to have a good strategy to make the best use of your PPC budget. Ultimately, that will help you generate a better return on advertising spend (ROAS), and get that much closer to your goals.

In the Google Ads auctions, your Ad Rank is determined by your bid and your Quality Score. Ads that have a low Quality Score will invariably cost more, as you’ll need to make higher bids to get your ads in front of viewers.

If you notice your budget is draining fast, and your ads aren’t showing up in the search engine results pages (SERPs), then you have a problem.

So, with that being said, it’s time to learn all about manual bidding vs. automated bidding strategies.

What is Manual Bidding?

Manual bidding is when an advertiser manages their keyword bids on the Google Ads platform, making decisions and taking action on their PPC account without any AI assistance or smart solutions.

Usually, advertisers rely on experience, intuition, and analysis of past keyword performance data to guide their decision-making. This process is very involved and requires a high degree of patience, time, and PPC knowledge to drive a good return on investment (ROI).

Manual bidding is best if:

• You have a limited budget.
• You have a small amount of consumer data (e.g., less than 30 days’ worth).
• You want more control over your campaigns and ads, and to have the ability to make quick changes.
• You have a lot of time for campaign monitoring.

Quite often, people who are new to Google Ads will use manual bidding before they are ready to embrace more advanced solutions.

3 Benefits of Manual Bidding

So, manual bidding is best if you like to pilot your own plane. With that, you can expect a few benefits:

I. Control

You can bid at the keyword level, using your discretion to get aggressive to win bids on the specific terms and phrases you want.

II. No delay in changes

Whereas automated bidding can take a little time to implement, any changes you make with manual bidding will take effect immediately.

III. Quick reactions

Imagine you are running an account with manual bidding when you notice a sudden slump in performance. You run a quick Auctions Insights report and deduce that some new competitors have driven the cost-per-click (CPC) rate up. In response, you change your keyword bids on the lowest performers, effectively limiting the damage to your budget.

Learn More: How To Manually Decrease Max CPC

4 Disadvantages Of Manual Bidding

Of course, it’s not all sunshine and roses with manual bidding. Let’s take a look at some of the significant disadvantages:

I. Challenging at scale

As your PPC account grows, so too does the challenge of managing it. You may find manual bidding on multiple campaigns, ads, and keyword lists can become a gargantuan task that’s too big for one person.

II. Prone to human error

Even the best PPC managers make mistakes. This probability for inefficiencies grows with larger accounts, and your marketing team may miss out on the bigger picture if they stick with manual bidding.

III. Time-consuming

Manual bidding can quickly become a full-time job. You’ll need to determine if the ROI is worth it.

IV. Limited segmentation options

When you compare manual bidding vs. automated bidding, the former doesn’t have as much flexibility regarding how you structure your account.

What is Automated Bidding?

Automated bidding, also known as smart bidding, is an AI-led keyword bidding strategy that uses algorithms to optimize bids according to your PPC campaign goals.

Smart bidding is best if:

• You have large PPC accounts.
• You have a lot of historical data.
• You want to reduce the time you spend on campaign monitoring.
• You have specific goals.
• You lack the expertise for manual bidding.

In essence, if you have more money but less time, automated bidding may be a good choice to let Google’s AI take charge of your account.

4 Benefits of Automated Bidding

When you compare manual bidding vs. automated bidding, the benefits of AI technology in advertising become clear. Let’s take a look at the main advantages of using a smart bidding strategy:

I. Versatile segmentation

Audience segmentation is crucial as it enables you to create custom subsections of your broader target audience, based on their shared interests and behaviors. You can bid for keywords for each segment, and create specialist campaigns and ads for them.

II. Efficiency gains

By using automation, you can free up time and resources to focus on other important tasks like growth strategy.

Even as you scale, you can use automation to efficiently manage thousands of keywords and hundreds of ad groups within large, complex accounts.

III. Accurate prediction models

The advanced machine learning algorithms help you make accurate projections about your campaigns, which gives you a solid foundation for smart decision-making.

IV. Contextual signals

Smart bidding leverages identifiable attributes — signals — about online users, which can benefit your account.

Such examples of these signals include:

• User Behaviour – the time of day, day of the week, interests, previous sites visits, cross-device usage
• Demographics – age, gender, device type, physical location, language, browser or operating system
• Ad Characteristics – ad format and ad performance
• Onsite Behaviour – how many pages did a user view, when a user left your site, the value of the products a user has viewed on your website

Learn More: How Analytics Improves Google Ads Device Targeting

4 Disadvantages of Automated Bidding

While the pros of automated bidding are good, there are also some cons you should think about before getting started:

I. Traffic and conversion requirements

If you’re going to make the most of smart bidding, you should wait until your PPC account already has a good flow of traffic and decent conversion volume.

II. Automation shouldn’t be left alone

AI is smart, but don’t leave your account to run itself entirely. Advertisers must keep tabs on the changes, and continue to fine-tune the account where required.

III. Potential delays

When you make changes in the Google Ads platform, it may not sync for a while. Typically, the platform syncs a few times a day. You’ll need to manually sync if you want your changes to take effect immediately.

IV. Be wary of aggressive changes

Algorithms need time to build data history and learn from it. So, if you make overly-aggressive bids and dramatic changes, it can negatively impact your account performance until the AI catches up.

5 Automated Bidding Strategies Worth Knowing

By now, you have plenty to weigh up when considering manual bidding vs. automated bidding. However, to get the full picture, you should learn more about the potential common smart bidding strategies you can use in Google Ads:

1. Maximize Conversions

The maximize conversions strategy automatically sets keyword bids to get the most conversions possible with your budget. While it drives conversions, it doesn’t worry about the cost of conversions. As such, you run a high risk of blowing your budget.

How it works

You must enable conversion tracking for this smart bidding strategy, and then Google will optimize this budget to get the most conversions possible. For instance, if you have a daily budget of $50, and a single conversion costs $50, Google won’t make a bid for it.

The AI checks your daily budget and determines how best to use it. Note that you should assign a standalone budget for this type of campaign of its own. If included in a shared budget, it may consume the daily budget of the entire shared group.

2. Target Cost Per Acquisition (tCPA)

The Target Cost Per Acquisition (tCPA) strategy aims to get as many conversions within your CPA goal as it possibly can. However, there is no overall target for conversion volume.

As such, this strategy focuses more on the cost of acquiring one customer. This makes it a good choice if you want to generate cost-effective leads, or if you don’t want to pay for clicks until after the conversion has happened.

How it works

Whenever you create a new PPC campaign, Google Ads recommends a target CPA based on the historical conversion data in your account. You can set the following parameters:

• Bid Limit for tCPA – Bid limits are only used in Search Network auctions. Also, they are only available for portfolio Target CPA bid strategies.
• Max. Bid limit – The highest cost per click (CPC) bid that you permit Google Ads to set for any keyword, ad group, or campaign using tCPA bidding.
• Min. Bid limit – The lowest cost per click (CPC) bid that you permit Google Ads to set for any keyword, ad group, or campaign using tCPA bidding.

Another consideration is device bid adjustments for Target CPA, as these allow you to prioritize conversions by the device.

Let’s say your target CPA is $10, and you set a bid adjustment of +50% for mobile. This adjustment will increase your target CPA to $15 on mobile devices.

If you wish to prevent your ads from displaying on any mobile devices, you can set a mobile bid adjustment of -100%.

3. Target ROAS (tROAS)

The return on ad spend (ROAS) is a percentage value that you can calculate by dividing ad revenue by ad cost. A value of 100% represents break-even point, while any value over 100% is a profit, and anything less is a loss.

The Target ROAS bidding strategy will aim to hit a specific value that you set in your campaign, so it’s good to use if your priority is to get a higher return for your spending on ads.

How it works

You must enable conversion tracking and set up conversion values. Also, you should have at least 15 conversions within the last 30 days to use this strategy in a Search Campaign.

Google Ads sets the max. CPC bids to help you maximize your conversion value, while also attempting to generate an average return on ad spend (ROAS) that is equal to your target.

4. Maximize Clicks

The maximize clicks smart bidding strategy will get the most clicks possible from your PPC budget.

If your top priority is getting ad clicks, and you aren’t concerned with using specific bid amounts, this is a good strategy.

How it works

Google’s AI will automatically set bids based on how likely it is your ad will earn a click or conversion. When determining this probability, the platform considers the following user data:

• Device
• Operating system
• Demographics
• Location
• Time of day

If you want more control, you can set bid limits. Be aware that overly-tight limits may restrict your ad clicks and position.

5. Target Impression Share

The Target Impression Share strategy aims to get your ad higher in Google SERPs, preferably at the absolute top of the page. This bidding strategy is only available on the Search Network, either as a standard strategy in a single PPC campaign or as a portfolio bid strategy across multiple campaigns.

How it works

You have three options when using the Target impression share strategy, which depends on where you want your ads to display:

• absolute top of the page
• top of the page
• anywhere in Google SERPs

Your placement settings impact how Google Ads automatically sets your bids.

Imagine you set an Impression Share target of 65% for the absolute top of the page. In this case, Google Ads automatically sets your CPC bids to show your ads on the absolute top of the page 65% of the total possible amount of times they could appear there.

Another thing to be aware of is the Max CPC bid limit, which is a cap on automatic bids set by this smart bidding strategy. Take care not to set this too low, as it will restrict the AI from helping you reach your Impression Share goals.

Wrap Up

So, as you can see, manual bidding vs. automated bidding isn’t a straightforward comparison. There is a lot to consider, namely your PPC budget, your goals, your experience, and your resources.

In any case, you need to determine what works best for your specific situation. That demands some time and perseverance with manual bidding first.

Smart bidding strategies can help you optimize your campaigns and achieve your goals, but they aren’t totally hands-off. Furthermore, it’s best to wait until you have enough data before moving to automated bidding.

Once you have that, there is a lot you can do with smart bidding strategies. Which will you use first?

Learn More: Your Guide to Google Ads ROAS Bidding Strategy