What Should My Budget for Automated Bidding Strategies Be?

When people in the paid ads world hear terms like “automated bidding strategy”, their eyes light up like those of a kid in a candy store. 

I get it – when you’re working, anything that can be automated is a big win. However, as with most things in paid ads, I would advise you against hastily making this decision. This isn’t to say that automated bidding strategies are bad – but they just aren’t for everyone. 

Don’t worry, since I’m her to help you with this. I’m going to be sharing a few key things you need to know about automated bidding strategies, including what exactly these strategies are, and how much ad spend you need to spend to be able to use these strategies. And just in case you were wondering . . . I do run my own paid ads agency, so yeah, I do know what I’m talking about. 

What is automated bidding?

Google uses AI algorithms when it comes to paid ads. After all, you’re not deciding which individuals to show your ads to – you give Google information about who you want to target, and trust it to show your ads to those people. 

However, there generally is still a large amount of human involvement when it comes to certain aspects of Google Ads. You need to tell it which keywords you want, who your target audience is, how much you want to pay, which areas you want to target, and which bidding strategy you want to implement.

Because Google works with an auction system, where you are essentially bidding on a click, your bid strategy plays a big role in how effective your ad campaigns are. Therefore, many people like to manually manage this to ensure that they have as much control as possible.

Automated bidding, on the other hand, claims to lift one of these burdens off your shoulders. As you’ve probably guessed by the name, an automated bid strategy is when Google’s AI sets bids for your ads in an attempt to help you reach your goals. 

Unlike other bidding strategies such as Manual CPC where you need to go in and update your bids, this strategy does it all for you. It considers things like average CPC, competitors’ bids, cost per conversion, and more, and makes an educated bid, without you having to lift a finger. Automated bidding strategies continuously learn as they go on, which helps to improve their abilities to set accurate bids for your campaigns.

What are your options?

From what you’ve just heard, it may seem like it’s a no-brainer to use automated bidding strategies when running Google Ads. But there are multiple bidding strategies, and in order to decide whether automating it is really the best option for you, you first need to know what all your options are. 

  1. Maximise clicks: this is a bid strategy where your only aim is to get as many clicks as possible. This is great if your overall goal is to improve your brand visibility. 
  2. Target impression share: this bid strategy aims to get you as many impressions as possible – in other words, it tries to show your ads to as many people as possible, regardless of whether people click on your ad or not. 
  3. Target CPA: within Google Ads, you can set a target cost per action, and this bid strategy aims to help you get as many conversions as possible within that CPA. 
  4. Target ROAS: you can also set a desired return on ad spend. Google will then use AI to estimate what the ROAS will be for a certain conversion and then try to convert users who meet your target ROAS. 
  5. Maximise conversion value: I don’t need to tell you that bigger conversions are better than smaller ones. With this bidding strategy, Google aims to get you high-value conversions rather than just focusing on the overall quantity of conversions. 
  6. Maximise conversions: differing from a maximise conversions strategy, this bidding strategy simply tries to get as many conversions as possible, regardless of their value. 

From the above, it should be quite clear by now that the bidding strategy you choose should very much align with your goal. Some of the abovementioned strategies are manual, and others rely heavily on Google’s algorithm to do the heavy lifting.

Automated bidding strategies aren’t automatically better than manual ones, nor are they worse. You need to figure out what you want to achieve with your ads, and then figure out which bidding strategy will help you make your goals a reality. 

Some more things you need to know . . .

There’s a lot more to learn about bidding strategies, so I highly recommend you do some more research or testing if you’re curious. 

There are a few more things that I think could help you determine whether you have the ad spend for Google’s automated bidding. My top tip, of course, would be to hire a Google Ads agency to manage your ads for you, but I might be biased, which is why I’ve added some other tips down below. 

What is the minimum you need to spend to use this bidding strategy?

I can’t spew out a number and tell you that you need to spend this much to use automated bidding strategies, as it depends massively on your cost-per-click, which is heavily impacted by the industry you’re in.

That being said, I always recommend a minimum ad spend of £ 2,000 per month to make your ads work for you, and I would say that the same rule goes for automated bidding strategies.

You can use keyword planner

Luckily, Google has a bunch of tools that you can use to make running your ads easier. The keyword explorer, for example, will help you figure out more or less how much your desired keywords will cost you on average. This will help you determine a more realistic expectation of your ad spend. 

You can run an explorer campaign

If you really have a small ad spend but you want to run ads, you need to run explorer campaigns. These are campaigns that aim to find keywords to see which ones have high volume and could lead to good conversions for your business.

Unlike other campaigns, where you already know which keywords you want and you’re ready to invest in them, these campaigns are kind of like trial runs, so you don’t want to spend too much money on them since a bunch of the keywords will likely fail.

However, this is a short-term solution, since you will eventually want to move these keywords into proper campaigns.

In conclusion

Are automated bidding strategies the best option? I’m going to give you an infuriating answer: sometimes. 

Okay, next question: how much do you need to spend on ads in order to use automated bidding? Here comes an even more infuriating answer: it depends. 

The truth is that paid advertising is so nuanced and complicated due to all the factors that affect it, which means that there isn’t just one answer that works for everyone. However, if you are interested in a more accurate and personalised overview of your ads, fill in the form below to get a free audit of your ads from my paid ads agency. 

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