What is bidding and why is it important for PPC?

PPC (pay-per-click) is a common marketing strategy used to generate brand awareness, increase conversion rates and boost sales for many brands. To reach these goals through PPC, businesses have to ‘bid’ on certain keywords within a Google Ad campaign.

Bidding is usually seen as an auction, where businesses are competing for the highest-ranking position in the search results. This means that the amount you bid on a keyword affects where you rank in the search results, and you want to be as close to the top as possible. But it’s not just the amount you bid that impacts your position in the search engines. When you run Google Ads, you’re bidding in an auction. This auction determines the position of your ad based on your bid and your Quality Score. If your ads have a low Quality Score, its going to cost you a lot more and there’s still no guarantee you’re going to appear at the top of the search results. 

The key to a successful PPC campaign is bidding on relevant keywords and ensuring that your ad copy and the landing page you’re sending visitors to match. Ideally, over time, you want to increase your conversion rate and boost your return on ad spend (ROAS). 

So, because bidding significantly influences the success of your paid ad campaigns, we’ve compiled everything you need to know about the bidding strategies available to you. 

What is automated bidding?

Automated bidding uses Google’s AI tool to set bids on your ads without your intervention. It automatically sets the bid amount by using information about a bid’s past performance to inform future bids. It also changes the ad spend depending on how well the ad is performing. This is why it’s such an effective and efficient way to produce results.

It can also help you achieve specific goals, such as maximising clicks, increasing visibility in search results, and boosting conversions. Plus, you don’t have to manually update bids for specific keywords or ad groups because it’s automatically generated.

Advantages of automated bidding

• You don’t need in-depth PPC knowledge

Automated bidding is a simple tool to maintain a PPC strategy without needing in-depth prior knowledge of digital marketing. Anyone can set it up and ensure its maintenance.

• Efficient and effective 

Because everything about this bidding strategy is automated, it’s efficient because results are AI-generated, and it’s effective because it frees up time and resources to focus on other marketing strategies. 

• Can work with manual bidding

Despite automated bidding doing what it says in the name, it can work in tandem with manual bidding. For example, you may not have a lot of conversions for swimwear in the winter, so the automation will decrease your bids. Then in July, swimwear becomes a popular search term again. Instead of waiting for the algorithm to detect this increase in sales, if you anticipate a change, you should manually adapt your ads and keywords accordingly. If you can see a change that needs making before Google does, make that change!

Disadvantages of automated bidding

• Not an instant set up

To begin using automated bidding, you need your Google Ads to have already been running at a rate you are happy with. This is so the algorithm has bid performance to work from. Unfortunately, you can’t just make a new Google Ads account and then put it on automated bidding; some manual effort must go into it.

• Delays

Even though it’s AI-generated, changes to your ads don’t happen immediately. There is a grace period between the keyword or ad group performing differently and the algorithm recognising it. 

• Less control 

Google is responsible for setting your ad spend. You can dictate what you want the algorithm to target, such as a higher click-through rate, but you can’t set the bids yourself. If you’re inexperienced in PPC, it may be beneficial to watch how the algorithm handles bid performance and bid adjustments before you manage it yourself.

What is manual bidding?

Manual bidding involves setting your own minimum and maximum CPC for your ads, whereas automated bidding sets the amount for you. With a manual approach, you determine exactly how much you pay for each click per ad. It also allows you to control each level of ads: ad campaigns, ad groups, and keywords.

This type of bidding is so useful for PPC because, with the right experience and knowledge, you can completely customise and tailor your paid search campaigns to meet your goals. For instance, if you’re aiming for your paid ads to maximise conversions, you can bid on keywords that would place your business in front of customers wanting to buy your product.

Advantages of manual bidding

• You're in control

You decide exactly how much you spend on each ad campaign and how much you pay per click. It also allows you to bid on the specific keywords and phrases you want, so that your ads are specifically targeting keywords that have shown to be more profitable. It encourages a unique, tailored digital marketing strategy.

• Easily adjustable

Using manual bidding means that you manually adjust ads and keywords when you notice a drop in performance. It’s easy to change, and it can be more effective than automated bidding if you think ahead of time.

• Immediate changes

Unlike automatic bidding, once you make changes to your Google Ads account, they are effective immediately. This means that your ads are constantly manageable and updated!

Disadvantages of manual bidding

• Human error

The manual aspect of this type of bidding, unfortunately means that human error is a given. Things can and will, go wrong. But this doesn’t mean that it’s the end of the world or your ad campaign. As long as you can assess the damage and construct a plan going forward, it will likely be resolved.

• Time-consuming 

You are responsible for the set-up of your CPC, ad campaigns, and keywords. You also have to manage these different ad levels and adapt your ad strategy when you notice an increase or decrease in ad performance. It is a time-consuming process and therefore requires time and effort for it to have recognisable effects.

What is the difference between automated bidding and manual bidding?

The obvious difference is that you have to manually set up, manage, and maintain your own Google Ads account with manual bidding. This reaps the benefit of retaining control over your ads, but it’s time-consuming, especially compared to automated bidding, which takes care of ad performance automatically. 

Another difference is that manual bidding has the ability to make your ads more tailored towards your specific business goals. Although automated bidding can work towards increasing clicks and conversions, manual bidding allows you to bid specific amounts on specific keywords and phrases. Having the flexibility to change your ad campaigns and keywords depending on what’s trending or performing well is an incredibly crucial aspect of successful PPC campaigns.

Nevertheless, automated bidding is a great beginner’s tool and is easy to use. It requires maintenance but significantly less than manual bidding does.

How is smart bidding different from automated and manual bidding?

People regularly assume that smart bidding is the same as automated bidding, but it’s not. You should remember that smart bidding strategies are automated, but not all automated bidding strategies are smart bidding strategies.

Smart bidding refers to the sort of bidding that uses the automated Google AI to optimise conversions or conversion value in every single auction. This essentially means that you can set your bid for a particular time of day or day of the week so you can target a specific audience with a specific goal in mind. Compared to automated and manual bidding, it has the capacity for higher optimisation.

It also has a higher chance of increasing your return on investment (ROI) and the value of conversions.

Automated bidding vs manual bidding - which is the best?

If you have a lot of time and a lot of PPC experience, manual bidding might be the best choice. You’ll be able to stay in control of your Google Ads account while customising your bids to your business’ needs.

However, if you want to save time and resources, automated bidding is also a great option. You can trust in the AI to reach your specified ad targets. 

Also, bear in mind that you don’t have to use just one bidding strategy, since they can be used interchangeably. If you want more information about bidding strategies, or would like to enquire about beginning a PPC campaign, email our team on hello@logica-digital.co.uk. 

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