This document summarizes a presentation on automated bidding strategies for pay-per-click (PPC) accounts. It discusses the implications for account managers, whether substantial performance increases justify using automated strategies, and how to successfully implement them. Case studies are presented that show how strategies like target ROAS can drastically increase spending, shift traffic to certain products, or increase CPCs but decrease traffic. The document recommends evaluating strategies for each account, allowing time for learning, and monitoring the right metrics like conversions rather than clicks. It warns against assuming strategies will solve all problems and highlights the need for careful framework and evaluation.

1. Why You Should (Not) be Using Automated
Bidding Strategies
Sven O. Wilhelm | SEM Manager

2. Why am I standing here today?
● Extensive experience with different 3P bidding solutions as well as Google´s
Smart Bidding and other strategies in different environments
● Interesting challenges came up in those years
● Information available online is not always helpful

3. Session Outcomes (1)
I will answer the following questions:
● What are the implications for account managers in general?
● Is there a substantial increase in performance that would make it
imperative to use automated bidding strategies?
● Which framework is required to use automated bidding strategies
successfully and how to measure success?
● How to avoid common pitfalls?

4. Session Outcomes (2)
I will not answer:
● How machine learning works for PPC accounts
● How to use Adwords Scripts for bidding
● Which 3P software works best

5. First encounters (1)
● Marin Search used for account management
● Me: (designated) super user
● My colleague Livia implemented a bid strategy for position bidding for her
most important keywords
● No max cpc limitations suggested for bid strategies by Marin Account
Managers
● So, what happened next...?

6. First encounters (2)
● Learning phase: bids pushed up to ~15$ max CPC
● Livia freaked out and switched back to manual bidding after a couple of days
Why did she freak out?
● She completely lost control over her most important keywords
● Actions performed by strategy were counter-intuitive
● The initial performance was horrible (It was working well later on.)

7. Changes in the competitive landscape
● Pressure on advertisers increases to move away from manual bidding
● Choice of strategies is extensive: target CPA*, target ROAS*, maximise
clicks, viewable CPM, maximise conversions, target search page location,
target outranking share, enhanced CPC, monthly spend (in addition, you can
create your own strategies)
*Smart Bidding entails optimization for conversions/revenue

8. What are the implications for account management? (1)
Interesting questions in this context:
● Will automated bidding solutions redefine the role of PPC account managers?
● Are there actually scenarios where automation doesn´t make sense?

9. What are the implications for account management? (2)
Will automated bidding solutions redefine the role of PPC account managers?
Yes...
● 3P bidding solutions as well as Google´s internal bidding solutions, Adwords
Express, Dynamic Search Campaigns, Responsive Search Ads, “optimize” ad
rotation settings, etc. are changing how account managers work
● General shift from micro-management towards higher-level strategy
● Time spent on bid management can be used in a better way
...but
● Smaller accounts or low conversion campaigns will still
require skilled manual work for good performance
● Strategy, set-up, copywriting, etc. still essential

10. What are the implications for account management? (3)
Are there actually scenarios where automated bidding won´t make sense?
Business Goals vs. Bid Strategies
● Leads differ in value, so there is a general conflict between good performance
(through high conversion numbers) and differentiation by business goals
● Segments of your portfolio are too small to run tROAS or tCPA strategies.
● Automated bidding strategies need time to learn. This means that ad-hoc
requests from management to “push these products now” will need to run
outside of the Smart Bidding strategy set-up

11. What about performance uplift?
Yes, there is a performace uplift, but...
● It makes a difference, if you optimise for tROAS or tCPA
● Biggest performance up-lift in campaigns with high conversion-volume
● Results differed a lot based on campaign type, volume and how portfolios
were put together
● Results also differ based on the amount of care the accounts received in the
past
● If performance remains stable, you still gain valuable time

12. Case studies
● Case Study #1 – (tROAS) Drastic increase in spending
● Case Study #2 – (tROAS) Shift to certain products in Google Shopping
● Case Study #3 – (tROAS) Increased CPC, decreased traffic

13. Case Study #1 – (tROAS) Drastic increase in spending (1)
● Target ROAS: 400%
● Great performance for last couple of months
● Accidentally huge sale of 16.6k
● Spending increased dramatically without corresponding
increase in revenue

14. Case Study #1 – (tROAS) Drastic increase in spending (2)
ERS differs a lot between campaigns in same portfolio strategy

15. Case Study #1 – (tROAS) Drastic increase in spending (3)
Take aways:
● Outliers in revenue may impact your kpis significantly
● Set budgets tightly to decrease chances for significant and sudden increases
in spending
● Your portfolio strategy balances cost effectively among campaigns
● This could potentially collide with other business goals

16. Case Study #2 – (tROAS) Shift to certain produtcs in
Google Shopping (1)
Body Text Here

17. Case Study #2 – (tROAS) Shift to certain produtcs in
Google Shopping (2)
Body Text Here

18. Case Study #2 – (tROAS) Shift to certain produtcs in
Google Shopping (3)
Body Text Here

19. Case Study #2 – (tROAS) Shift to certain produtcs in
Google Shopping (4)
Take aways:
● Google will distribute traffic differently between biddable items
● This traffic shift will usually benefit you
● If you need to sell off certain products: Doing it manually might be better
● In the above example: Shift to different products led to more revenue and
lower cost (Other pool tables filled the gap)

20. Case Study #3 – (tROAS) increased CPC, decreased traffic (1)
Smart Bidding tROAS in a longer-running portfolio:
● clicks: -23%
● avg. CPC: + 48%
● avg. Position: - 8% (lower position)
● revenue: +36%
● cost: +14%
● mobile CVR: +47%

21. Case Study #3 – (tROAS) increased CPC, decreased traffic (2)
Take aways:
● It is important to look at the right metrics
● Mobile performance may improve
● If you report on traffic figures, make sure to manage expectations before
launching Smart Bidding

22. Which framework is required to use automated bidding
strategies successfully and how to measure success? (1)
● Do not choose a “one solution fits all“ approach
● Keep in mind: large portfolios allow for better trade-offs
● Split your campaigns by business goals. Do not put campaigns or ad groups
in one strategy that have different CPA or ROAS targets
● Set appropriate target CPA or target ROAS goals, based on historical
performance (usually last 30 days)
● Do not let bid strategies run with budget limitations
● Allow enough time for evaluation of results

23. Which framework is required to use automated bidding
strategies successfully and how to measure success? (2)
● For Smart Bidding, look at the right metrics (only conversion metrics)
● Keep in mind that some KPIs may go down (like clicks, impressions)
● Consider which attribution model you are using
(Using a last-click attribution model means you are optimizing for last click
performance.)
● Keep an eye on keywords with strong seasonal fluctuation and low volume
(Look-back modeling, clustering, etc. are supposed to solve this.)
● Enrich your campaigns with audiences to provide additional data points for
Smart Bidding strategies (e.g. regular remarketing lists & in-market audiences)

24. A great pitfall to avoid...
When you switch back from Google´s Smart Bidding to manual bidding, check
your bids J

25. Action Items
● Leverage automated bidding strategies to achieve better results or save time
● Do not assume that automated bidding strategies will solve all your problems
● Let account managers evaluate and decide which solution works best for their
accounts
● The landscape is changing fast – try out new solutions from time to time
● Start small experiments, especially with Google internal solutions (no
additional cost involved)
● Test 3P providers and let them help you with their knowledge and technology

26. Thank you J