This document discusses how artificial intelligence and machine learning are being applied in pay-per-click advertising. It provides definitions of AI and machine learning, and gives examples of how they are used in areas like automated bid management, ad rotation, and opportunities in the Google Ads interface. The document also outlines several automated bidding options in Google Ads like Target CPA, Target ROAS, and Enhanced CPC that utilize machine learning. It notes how these options can analyze contextual signals to optimize bids in real-time.

1. Artificial Intelligence and Machine
Learning in PPC
Presented by:
David Szetela
Owner and CEO, FMB Media

3. Definitions
• Artificial Intelligence = software that performs tasks that normally
require human intelligence, e.g. speech recognition
• Machine Learning = software that automatically modifies itself over
time, based on “experience.” Example: Netflix building, over time, a
better and better understanding of video tastes – recommendation
engine.

4. AI & Machine Learning Examples in PPC
• Automated Bid Management
• Attribution Models
• Ad Rotation Settings
• Opportunities (especially in the new AdWords “Experience”)

5. Future AI & Machine Learning
• Google Optimize
• Google Attribution

6. AdWords Automated Bidding Options
• Maximize Clicks – can specify maximum CPC (do it)
• Target Search Page Location – top or anywhere on search page; specify
max CPC
• Target Outranking Share

7. Target Outranking Share
• Automatically bids to keep your ads above a competitor
• You enter the domain name of the competitor’s site
• Specify the percentage of auctions you want modified this way. Higher
percentages = more budget
• If you and competitor both use this strategy, rank is determined by bid
price and quality score

8. AdWords Smart Bidding Options
• Target CPA
• Target ROAS
• Enhanced CPC (eCPC)
• Target Maximum Conversions

9. Smart Bidding Contextual Signals
• Machine learning based on device, location, next location,
weekday, time of day, remarketing list, ad characteristics,
interface language, browser, operating system,
demographics, search query, search network partner, web
placement (Display), site behavior (Display), product
attributes (Shopping), price competitiveness (shopping),
Seasonality (Shopping), etc.

10. Target Cost per Action
• Real-time bid adjustment – optimal bid for each auction
• Optimal CPA: at first, AdWords will suggest; OK to set target to 10-15%
of current average CPA
• Requires a minimum of 15 conversions over the past 30 days – more is
much better; consider micro-conversions
• Needs time to learn – be patient! Can take 2-3 weeks

11. Target CPA (continued)
• Works best for lead generation, but also try it for eCommerce where
products price range is wide
• If you want to decrease CPA more than 10-15%, do it in increments of
15% and wait at least a week between adjustments

12. Target Return on Ad Spend
• ROAS = sales / ad spend x 100%
• Real-time calculation of bid price, just like Target CPA
• AdWords will suggest an appropriate ROAS based on past performance
• If you want to increase ROAS more than the suggested target, do so in
10-15% increments, waiting at least a week between adjustments

13. Enhanced CPC (eCPC)
• Adjust bids in real time, based on the manual bids you set
• Continually self-adjusting by double-checking its “success rate” against
manual bids
• Caveat 1: no cap on bid increases
• Caveat 2: doesn’t take device into consideration
• Caveat 3: Don’t use on new campaigns – even though it’s turned on by
default – because there’s no conversion history

14. Target Maximum Conversions
• Spends your entire budget to obtain the maximum number of
conversions
• Check your daily campaign budgets – this automated bidding will eat it
all up
• Decide whether target CPA or ROAS might be more appropriate

15. Bonus (?!) Automatic Display Targeting
• Automatically turned on when you create a new Display campaign
• Two flavors: Conservative and Aggressive
• Conservative: shows ads on more sites that are related to target
context or audience
• Aggressive: shows ads to more people based on likelihood of converting.
Requires a minimum of 15 conversions per month.

16. Coming Soon to BingAds

17. Attribution AI is Now Available
• Attribution acknowledges that more than one paid action
might occur in conversion chain of events
• In AdWords now: Allows automated bidding using attribution
models based on a number of “touch points”
• Tools -> Attribution -> Attribution Modeling

25. Thanks!
• Free Book
– Give me your business card, or
– Send me an email: david@fmbmedia.com