Beat the Algorithm with Automated Bidding Strategies on Google Adwords. Different Bidding Strategies to Help With Your Search Engine Marketing Performance.

1. BEAT THE
ALGORITHMWITH AUTOMATED BIDDING STRATEGIES
ROHIT MULANI

2. WORDS TO LIVE BY

3. CAVEAT

4. BEFORE WE START…
▪ Much of what will be covered is only applicable for accounts that already ‘work’.
▪ This means :
- You have definitively concluded that paid search ads are a viable acquisition
channel for your business - at least for some of your products
- Your existing campaigns are converting ( >30 conversions in last 30 days)
- You have completed basic tests like pricing of product, which landing page works
best, which languages & locations to target

5. SIGNALS

6. CONTEXTUAL SIGNALS
▪ 2D view : user’s search query  ad delivered  click  conversion
▪ Multi-dimensional view : every single search is different. A combination of
variables deliver a set of contextual signals about the search.
- Device
- Browser
- Location
- Time of Day
- Day of Week
- Season
- Weather
- New User
- Keyword Match Type
- Demographic Profile

7. BID ADJUSTMENTS

8. BID ADJUSTMENTS
▪ Increase or decrease bids for a keyword by a % when a specific variable is met
▪ Variables : Device, Location, Schedule, Remarketing List
▪ Device : Desktop, Mobile, Tablet
▪ Schedules : 6 schedules a day x 7 days a week
▪ Greater control on when, where and how ads are displayed & allows to optimize
bids to ensure you bid the right max. CPC for each auction
▪ Some clicks are worth more than others
▪ Starting bid : $1
Mobile Adjustment : +50%
Resulting Bid : $1.50

9. LAYERING BID ADJUSTMENTS
▪ Multiple bid adjustments layer on top of each other.
▪ Starting bid : $1
Mobile Adjustment : +20%
Location (Downtown Core) Adjustment : + 20%
Schedule (Tue 9am – 12nn) Adjustment : +10%
RLSA (All users within 14 days) Adjustment : +30%
▪ For a user sitting in an office in downtown on his mobile on a Tuesday at 10am
that recently came to your site, your resulting bid would be $2.06 – 2.06x your
starting bid.

10. BIDDING
STRATEGIES

11. BIDDING STRATEGIES
▪ 3 Types : Manual, Assisted & Automated
▪ Manual : Set bids manually
▪ Assisted : Rules , scripts & 3rd party software
▪ Automated : Machine decides what to bid

12. ASSISTED BIDDING

13. AUTOMATE THE ASSIST

14. RULES

15. FOLLOW THE RULES
▪ Pretty easy to set up.
▪ Literally, just follow the rules.
Things to watch out for :
▪ Which keywords to apply to
▪ % increase/decrease
▪ Max bid
▪ Requirements can be used creatively
▪ Frequency for rule to run
▪ Get emails to know what’s going on

16. FOLLOW THE RULES - PREVIEW
▪ Before implementing the rule, you can preview the results if the rule ran now.

17. COMMON RULES
FOR BID OPTIMIZATION

18. ADJUSTING BIDS TO MAX. OPPORTUNITY

19. TARGETING DESIRED POSITION

20. TARGETING FIRST PAGE

21. TARGETING TOP OF PAGE

22. MAXIMISE IMPRESSION SHARE

23. MANAGE THE RULES

24. SCRIPTS

25. SCRIPTS
▪ Adwords lets you add JS to your account to do a wide range of activities
programmatically.
▪ Scripts allow you to do some amazing stuff within Adwords
- Optimize bids based on live weather data
Increase bids by 10% when weather = cloudy
Increase bids by 20% when weather = raining
- Live inventory data in your ad copy
- Automatic A/B testing ad copy
- Automatically spotting keyword opportunities from your search term report and
adding the keywords into your campaign

26. BUCKETS
▪ Scripts broadly fall into 9 buckets
- Bid Optimisation
- Keyword Optimisation
- Keyword Mining
- Maintenance
- 3rd Party Data
- Budgets
- Ad Copy
- Alerts
- Reports

27. POWER OF SCRIPTS

28. 5 SCRIPTS
FOR BID OPTIMIZATION

29. WEATHER BASED BIDDING
▪ Demand for certain products fluctuate according with weather patterns.
▪ It’s possible to use a script to reference live weather data and programmatically adjust your
bids based on the weather.
▪ A bid modifier is applied to bids to optimize bids.
▪ Type of weather data available : condition, temperature, rainfall, wind speed & more
Example
▪ Uber is bidding on keywords like +call +taxi
▪ On rainy days, it’s hard to get taxis in Singapore
▪ Simplistically, Uber could run a script to increase its bids to ensure top position
▪ Additionally, they could also pull data like surge in that locale, probability of booking, user
status (existing?), and generate a maximum allowable CPC for every single auction.
You can find the script here

30. BID TESTING
▪ How do you determine the best base bid for each keyword?
▪ This script tests different levels of bidding systematically using multipliers and
reports on the performance indicators.
▪ Data available : keyword bids, impressions, clicks, CTR etc.
Example
▪ Agoda has just onboarded a new hotel in Bali
▪ It sets the base max CPC as top page CPC
▪ It runs the above script to settle on the sweet spot between CTR & being ROI
positive.
You can find the script here

31. 24H BIDDING SCHEDULE
▪ Remember the maximum 6 ad schedules per day for schedule bid adjustments?
▪ This script lets you adjust your bids 24 times a day, 7 days a week via Google
spreadsheet.
▪ This allows you to tweak bid adjustments every hour of every day so you can place
your ads in the best ad positions for converting.
Example
▪ McDonald’s uses the 24h script to optimize bids for every hour of every day
▪ They sets different bids for early breakfast, late breakfast, brunch, lunch, late
lunch, tea, early dinner, late dinner, supper, midnight snacks, late night binging &
hungry clubbers.
You can find the script here

32. FIGURE OUT BID MODIFIERS
▪ There’s a science to setting bid modifiers but doing the math is a little bit of a pain in
the ass – if you have to do it for every single campaign.
▪ This script will calculate and sets a mobile bid modifier to bring your mobile
performance in line with your desktop/tablet campaigns.
Example
▪ Dropbox notices that its overall account CTR & avg pos on mobile is lower than on
desktop/tablet.
▪ Instead of going through each of their hundreds of campaigns and adding a manual
mobile bid adjustment to each one, they use this script to figure out what mobile
bid modifiers should be.
You can find the script here

33. AIRPORT DELAYS
▪ This script enables and pauses ads when there is a delay at the airport.
▪ Minimum length of delay is built into the script.
Example
▪ Crowne Plaza Hotel at Changi Airport uses this script to enable a contextually
relevant ad when people search for “airport hotel” when there is a > 6 hour delay
after 10pm.
You can find the script here

34. MORE AWESOME SCRIPTS
▪ BrainLabs Digital
▪ RankHammer
▪ Optmyzer Scripts
▪ FreeAdWords Scripts
▪ Google Developers – AdWords Scripts
▪ or…write your own

35. BID MANAGEMENT TOOLS
3RD PARTY

36. SUPER ASSISTED
▪ Allow 3rd party algorithms to control bids
▪ They offer more functionality than the Adwords UI and intelligence like :
- identifying gaps between competitive bids
- calculating tradeoffs between lower positions, costs & achieving key metrics
- allocating budget based on traffic
▪ Automates stuff like : targeting desired position & bid adjustments
▪ Provide recommended actions to “automate” Adwords as well as give you access to
dashboards that help you see what’s happening.
▪ Further functionality built in like : A/B testing ad copy, optimize placements for display, fix
structural issues and help with keyword mining.

37. SHOULD YOU USE ONE?
▪ There’s an upfront time investment (learning curve) and cost involved but if it works
for you, it will pay off over time.
▪ Note that you still need oversight on your account – it’s still not a set and forget
model. Left alone, it can have the opposite impact on your account.
▪ It does help in controlling various parameters and saves time and some tedious
work.
▪ Almost all of them offer free trials so give it a shot and see how it works for you.
Tread carefully though as changes made are not easily reversible.

38. 3RD PARTY BID MANAGEMENT TOOLS

39. SMART BIDDING
BY GOOGLE

40. AUCTION TIME BIDDING
▪ Auction time bidding is a move away from traditional keyword bidding
▪ Adjust bids for each individual auction based on the signals we discussed
▪ Machine learning algorithms evaluates real time contextual signals at auction
time
▪ Signals like device, browser, physical location, location intent, time of day, day of
week, remarketing list, weather, interface language, operating system,
demographics, actual search query.
▪ It even takes into account ad characteristics which version of ads it will show,
user’s non interface language preferences, search history and more.

41. PREDICTIVE ALGORITHMS
▪ Using the contextual signals, the algorithms seek trends and patterns based on
historical data to predict how much each auction is worth to your business.
▪ Predicts how bids will impact conversions or conversion value.
▪ Find an optimal bid for each time the ad is eligible to appear.

42. GOOGLE’S AUTOMATED BID STRATEGIES
▪ There are 6 automated bid strategies available within the Adwords UI.
▪ Bid strategies can be edited within each campaign’s settings page.

43. IGNORE THE STUPID ONES
▪ Of these 6, 3 of these bid strategies fall within the subset of Adwords Smart Bidding.
▪ Target CPA & Target ROAS are fully automated bidding strategies.
▪ Enhanced CPC is an assisted bidding strategy.

44. ENHANCED CPC

45. ENHANCED CPC
▪ Enhanced CPC is an assisted bid strategy.
▪ Enhances your manual CPC bids by automatically adjusting them for auctions that
are more likely to lead to a conversion.
▪ Constrained by manual bids.
▪ Raises your bids by up to 30% when conversions are more likely.
▪ Lowers your bids by up to 100% (opt out of auction) when conversions are less likely.

46. POINTS TO NOTE
▪ Enhanced CPC is in a perpetual state of testing : it doesn’t optimize bids for part of
the auctions it participates in.
▪ It compares the results and continually adjusts accordingly.
▪ It uses auction-time signals and tailors bids unique to each searcher’s context, but
not to the full extent of other Smart Bidding strategies.
▪ Bid adjustments are active with ECPC. So bids can be up to 30% higher than the
adjusted bid.

47. PROS & CONS
Pros
▪ Auction time bidding = superior results in terms of # of conversions & CPA
▪ Maintains the flexibility & control of manual CPC
▪ Adjusts to changes and spikes quickly
Cons
▪ Perpetual A/B test - not all searches exposed to this
▪ Constrained to +30% of manual CPC bid – less effective than other Smart Bidding
▪ Still takes more work than other Smart Bidding strategies

48. TARGET CPA

49. TARGET CPA
▪ As the name suggests, Target CPA targets a cost per acquisition i.e. a target cost per
conversion in Adwords terms
▪ CPA is targeted on average i.e. some conversions may cost more than others
▪ It gives the Google machine learning algorithm close to full control over bids
▪ When you first implement Target CPA on a campaign, it takes up 7 - 14 days for the
algorithm to “learn”. Results may be sub-optimal during this learning period.

50. LEARNING
$25 $18 $19.70 $1,000

51. POINTS TO NOTE
▪ Setting too low a target CPA may result in low impression share – you may not end
up driving enough conversions.
▪ You can set different target CPAs within a campaign – for each ad group.
▪ You can now set CPA adjustments for device
Campaign target CPA: $10
Mobile Adjustment : +20%
Mobile target CPA : $12
▪ You’ll see a blended effective target CPA in your account at the campaign level.

52. TARGET CPA - ELIGIBILITY
▪ Not all campaigns are eligible for Target CPA bidding.
▪ Campaigns must have >30 conversions in the last 30 days.
▪ When setting the bid strategy, Adwords will suggest a recommended target CPA.
Start with that.
$25

53. PROS & CONS
Pros
▪ A lot less manual work
▪ Auction time bidding = superior results in terms of # of conversions & CPA
▪ Algorithm adjusts to minor changes over time automatically
▪ Not constrained by manual bids
Cons
▪ Unable to respond to spikes – eg. Florist on 13th February
▪ Frequent changes to anything across the funnel = time to re-learn.
▪ Competitor attacks = potential for cost to skyrocket as algorithm takes time to adjust
▪ Less control

54. TARGET ROAS

55. TARGET ROAS
▪ As the name suggests, Target ROAS gives the algorithm the goal of maximizing your
Conversion Value / Cost.
▪ Conversions are not all treated equally, unlike Target CPA.
▪ For websites that sell multiple, variably priced products, ceteris paribus, bids will be
higher for higher priced items.
▪ Values used are in %.
▪ $62 sale for every $1 ad spend = 620% target ROAS

56. POINTS TO NOTE
▪ Setting too high a ROAS will limit your bids for lower value products on your site,
even if they drive volume.
▪ Not all campaigns are eligible for Target ROAS bidding.
▪ Campaigns must have >50 conversions in the last 30 days.
▪ Like Target CPA, a recommended value is presented in the Adwords UI when setting
up the bid strategy.
▪ Bid adjustments are ignored with the exception of -100% mobile bid adjustment.
▪ You can set different target ROAS within a campaign – for each ad group.
▪ You’ll see a blended effective target ROAS in your account at the campaign level.
▪ Target ROAS may take >14 days to learn

57. PROS & CONS
Pros
▪ One step beyond CPA = not all conversions are equal
▪ Auction time bidding = superior results in terms of ROAS & by effect, ROI
▪ Built for eCommerce – with large numbers of product pages
Cons
▪ Unable to respond to anomalies – spike in demand for lower priced product
▪ Frequent changes to anything across the funnel = time to re-learn.
▪ Algorithm is much more sophisticated – might not be right for every business

58. SUMMARY
▪ 3 types of bid strategies – manual, assisted & automated.
▪ Watch out for bid adjustments – they layer on top of these strategies in most cases.
▪ Personally, always prefer to start with a manual strategy as this gives the greatest
level of control.
▪ Once you have a feel of the campaign, completed the basic tests and made the
campaign work, then consider assisted & automated bidding strategies.
▪ Approach changing bid strategies as experiments.
▪ Measure impact & determine what works best for each campaign.

59. THANK YOU
CONTACT ME AT
ROHIT@MULANI.CO