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Adwords Smart Bidding vs. Manual Bidding

Last week Google announced the introduction of Adwords Smart Bidding, an improvement on their automatic bidding. This allows advertisers to tell Google what their target cost-per-acquisition is and Google bids for the advertiser to get the most conversions possible at the target CPA. It takes into account a lot of data (location, device, browser, context, etc) in order to determine the expected conversion rate for that impression and then bids based off of that information. Sound great, doesn't it?

I'm not so sure that it is.

I'm sure part of this is psychological. I actually like changing bids manually, and I like having the control that manual bidding gives me. I also think of myself as the John Henry of bidding: I believe I can beat any machine. Part of it is also based on experience. I have been skeptical of any automated bidding since Google convinced me to try out Google Search with Display Select. This is a campaign type where Google manages your display bids to get the same CPA as your search advertising is getting. After spending hundreds of dollars on display for no sales in a campaign where the search campaign was averaging $30 CPA, I turned it off. Google assured me that I just needed to give it more time for the algorithm to get the data it needed, but I didn't think it would ever work. I have also had poor results from automated bidding through third-party bid-management software. And Google's testimonials in their release were so fantastic (double the leads! half the CPA!) that I think those advertisers must not have been doing any manual bid adjustments at all.

All of this is not to say that this is a worthless tool. If you are managing an account and you are not good with numbers, spreadsheets, and analysis: please try this out! This will be way better than no bid management at all. If, however, you are like me and distrustful of algorithms and enjoy digging into data, you should take it for a test spin with one campaign and see if it works before you change your whole account. I will be setting up a test sometime this fall and will post how it works for me.

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