Automatic vs. manual bidding: Which should you use?

In the SEM industry, there are two main bidding methodologies: automated bidding (through third-party bid tools/Google’s Conversion Optimizer) and manual bidding (through the AdWords Interface/AdWords Editor). Each professional PPC Manager will have a unique stance regarding which method of bidding and toolset they prefer to optimize their search accounts. In many cases, the best bidding methodology is determined by the type of account in question and specific advertising goals.

Let’s dig into this. We’ll go over their subtle differences and the pros and cons of manual and automatic bidding, and then we’ll break down the Google Conversion Optimizer vs. third-party bidding platforms.

• Quick reactions – say that while monitoring your account, you notice that performance has suddenly dropped today. You run an Auction Insights report and come to the conclusion that new competitors have been pushing CPCs to increase, so you quickly push bid changes for the keywords that have been performing poorly to combat the situation at hand. The ability to react to the always-changing online environment right away is a huge advantage.
• Control – with this type of bidding, you are able to bid on the individual keyword level and determine how aggressive you want to be with your bids at the most specific level. It is power and granularity at its finest.
• No delay in changes – Manual bidding ensures that your changes are in effect without delay. Hooray!

Cons:

• The larger the account, the larger the challenge – big spending accounts that house thousands of keywords (especially those in E-commerce) get more and more difficult to effectively manage on a granular level.
• Chance for inefficiencies – having a day-to-day view of the account can potentially prevent a marketer from seeing the “bigger” picture. Also, there is the risk of human error because of the human component within manual bidding.
• Bidding can eat up your time – for PPC managers who don’t use bid management software, adjusting bids manually can easily turn into a full-time job, so the question lies in weighing the opportunity costs and benefits for both bidding options and figuring out which suits you and your accounts best.
• Limited segmentation options – if you want to bid on certain campaigns or ad groups similarly, you are limited to a certain account structure. With automated bidding, you have the flexibility to structure your account anyway and bucket different campaigns and ad groups in any combination you desire for bidding purposes.

• Versatile segmentation – the underrated ability to segment your campaigns and ad groups based on similarity and categorize them into custom folders which you can then bid separately.
• Efficiency – automation can give you the freedom in bandwidth to manage your big accounts on a macro level and focus instead on growth opportunities or account strategy while also keeping tabs on everyday performance.
• Ability to handle large or complex accounts – it can be challenging to manage all of the thousands of keywords within large or complex accounts, so automation can help in efficiency gains.

Cons:

• Traffic and conversion suggestions – it is advised that switching over to automated bidding is best when your account has decent traffic and conversion volume…but not before.
• Automation does not mean hands-off – by using these platforms(s), you still have to actively keep tabs on your account and pull levers on a regular basis to make sure these tools are effectively performing the way you intend them to. You also don’t want the tool to do your job for you but instead complement your existing search initiatives.
• Potential delay in changes – since you make changes in the platform and not directly in the UI, there is an extra step of syncing your changes to the channel. Most platforms will automatically sync once or a few times a day, with the option to manually sync your campaigns, so if you forget to sync your changes immediately, they won’t be in effect until the platform’s next scheduled sync.
• Be wary of aggressive changes – when optimizing with a bid management tool, it is wise not to be overly aggressive when adjusting targets because algorithms require time to develop and build history to determine optimal bidding so sudden big changes might negatively affect performance.