Google Automated Bidding Vs. Third Party Automated Bidding

Whether or not an AdWords advertiser should let Google handle the bidding of their keywords is a question that has been asked since the beginning of time. Or at least, since it became an option. As with most approaches to AdWords management, there’s no clear-cut right or wrong answer but that doesn’t mean there’s a shortage of opinion.

If you choose automatic bidding inside AdWords, you’ll set a max CPC on the campaign level. Doing this is simple, you just enter a number, but setting a max CPC for an entire campaign can hinder your performance. Using examples makes this easier to explain, so let’s say you’ve set your max CPC at $2 and you’re getting good conversions and clicks at position four on one of your keywords while paying an average of $1.93 per click. However, on another one of your keywords, you’re paying between $1.99-2.10 to average being at position eight and aren’t getting very many clicks. Let’s also say those are your top performing keywords conversion-wise, the rest of the terms in the group are getting clicks at under $2 but not resulting in many sales.

I want to focus on that keyword that’s ranked eighth, not getting many clicks, but has a high conversion rate. There’s a good chance that if you were able to boost the CPC for that term, you’d rank higher, get more clicks, and if the conversion rate holds, you’d be sitting pretty.

Therein lies my biggest problem with allowing Google to run bidding for you, any PPC expert will tell you that they adjust bids on the keyword level on a consistent basis, so it’s poor practice to set one common bid and let things fly. The alternative within Google-automated bidding is to forfeit a max CPC and let Google maximize your budget with the bids they think will get you the most clicks.

I can’t say one way or another that the second option is good or bad, all I know is that Google’s end-goal is to have you spend as much money as possible on advertising, that’s how they get paid after all.

What Makes Third Party Software Different?

Third party software, such as WordWatch, works within your budget to try and reduce the cost of your campaigns while still getting you the most clicks possible. For instance, we might find that although your Max CPC nets you position two for a given keyword, you’ll actually get more clicks and conversions at position four, at a lower CPC. We’re also able to let customers set a max CPC on the ad group level, giving you more control of your budget, though we do recommend not setting a max CPC to give the app the freedom to find the optimal price point for your keywords. That, of course, is completely up to the advertiser.

When it comes down to choosing an AdWords bid manager, the deciding factor is trust. Do you trust a company that makes more money when you spend more money, or do you prefer the third parties, who only make money if you’re happy with the way they’ve improved your performance?

Or think of it like this: If you were at a silent auction, would you let the auctioneer sell you the item and bid on your behalf?

Posted in: Google Adwords tips, PPC, Tagged: , , ,
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One Response to Google Automated Bidding Vs. Third Party Automated Bidding

  1. Pingback: How Small Businesses Can Keep Up with Big Brands in AdWords | Top Marketing Tips - Web Design, SEO Strategy, Content Development

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