Limitations of Automatic CPC Bidding

When creating a B2B PPC account for the first time, one might be drawn to the idea of putting all the work on Google’s plate. The allure of spending less time managing the account along with Google’s language promoting their automatic bidding tools can make you question the need for manual touches. While time management is important, driving results and achieving higher lead quality are more important, and those come from industry expertise and control.

Knowing the Value of Specific Keywords & Exercising Control

If you are creating an AdWords account, or managing one, it would be safe to assume that you know your business better than Google. This knowledge base is not something to push to the side in favor of Google’s automated bidding.

When creating a new campaign, there are a few questions that only you can answer: what is the end goal of this campaign? What is the value of your individual keywords, or ad groups? For example, if I was creating a campaign for a company that specializes in enterprise address verification, the end goal would be increasing the quality of leads and the number of leads. As for the value of my keywords, I would place a higher bid on ‘address verification software’ than I would ‘verify address’.

However, with Automatic CPC Bidding, Google takes away the control of setting bids. This focuses your account on getting the highest amount of clicks, regardless of how valuable that click is to your end goal. If ‘verify address’ has a $0.45 bid, the automatic bidding algorithm will focus more budget on this lower relevance keyword than on ‘address verification software’ with the $3.00 bid.

There is also the possibility that your end goal is to be in first position every time for your core keywords. In which case you would bid higher regardless of the conversions or cost because you know the traffic coming from those specific keywords is valuable on an awareness level.  With automatic bidding, you could end up losing out on traffic and positioning on your core terms.

In theory, Automatic CPC sounds like a great auto-pilot, but looking more closely you might want to keep your hands on the control stick.

Automatic CPC Bidding for E-commerce

Outside the realm of B2B, there are times when Automatic CPC could be useful. However, even in the field of B2C, you might want to be cautious of the algorithm. Even in e-commerce, there is a lot to be said for control over your account leading to better results. For example, if you sell different items with a wide range of profit margins, you might want to manually set a higher bid for keywords leading to a higher profit margin, even if it is a higher CPC. For example, if jewelry line A gives you a 50% profit margin, and jewelry line B results in a 30% profit margin, then even if the CPC’s are more expensive for A, you would want to bid higher to account for the increased profitability of a conversion.

Switching from Automatic CPC

If you decide that manual CPC bidding is the way to go, the next question might what are the immediate effects of switching from Auto to Manual CPC? If you have only run campaigns on Automatic CPC, finding a bid for every keyword could be daunting.

In this case there are two main areas where you can look to guide your bids. The first is to take the campaign-wide average CPC, and then add 10% to account for the difference between an Average CPC and the Max CPC. This will give you a bid baseline. Keep in mind that you will want to keep bids tiered; with Exact match keyword bids being $0.05-$0.10 above Phrase match, and Phrase match bid $0.10-$0.20 above Broad match. Second, you could use the Google Keyword Planner to see what Google suggests for the bid.

Once you have set the new manual bids, it is important that you continue to monitor overall traffic for swings. If the traffic jumps quickly, leading to a large increase in spend and traffic, the bids may have been set too high and need to be brought down. Vice versa, if traffic plummets, increasing bids is in order.

Although there aren’t many instances where Automatic CPC Bidding should be used in a B2B setting, this doesn’t mean that a Google algorithm is never useful. If you are currently using Automatic CPC and are happy with your results, then there might be no need for you to switch over to manual bidding.

On the other hand, if you feel that the traffic you are acquiring isn’t matched to your best interest, it might be time to value your own search terms based on their importance to your business. After all, Google does not see the quality level of the leads you are driving. And while Google may not see lead quality, that is something you should be actively monitoring on the back-end, and you should be adjusting bids accordingly.  This is incredibly important and we work with our B2B clients to optimize their PPC accounts based on back-end lead tracking and lead quality.

Overall, although Google’s algorithms might have a time and place where they could be useful, it is important and valuable to hold control over your own campaigns. Whether your account is in-house or you work with an agency that takes the time to know your business, use your industry expertise to set meaningful bids to get the best results. Happy bidding!