Could Google’s smart
bidding be any smarter?
Many advertisers and tech companies have largely given up looking for bidding wins. At Search Machines we are still at it. Our latest bidder which we call ProfitMax is seeing wins up to 15% in AB tests with our clients.
First up kudos to Google for making great strides in their smart bidding strategies over the last few years. They have leveraged their incredible access to data and understanding of the user’s search history to set bids according to the context of each search and the user’s propensity to convert. Sadly, Google’s most advertiser friendly bidding strategy – Enhanced CPC – hasn’t had the same investment which now makes it incredibly hard for third parties to compete. For us, it has been a few years since we beat Google’s smart bidding with a strategy utilizing Enhanced CPC.
But we didn’t give up. Our desire with ProfitMax was to create a bidding technology that utilized the best of Google with the best of an advertiser’s own data. Whilst we stay within an overall strategy of Maximise Conversions or Maximise Conversion Value we vary the tCPA or tROAS on each ad group. In this way we can find more optimal operating points for the advertiser.
There are three ways ProfitMax achieves this.
1. Firstly ProfitMax models the auction dynamics in each ad group for something we call elasticity based bidding (EBB). By modelling these response curves, it can find pockets of performance to exploit. Sometimes a small increase in tCPA can lead to a very large increase in conversions. In other cases, a large decrease in tCPA can save a lot of cost with only a small drop in conversions. By combining these two opportunities the same overall CPA can be maintained but with many more conversions overall. ProfitMax automatically finds these opportunities on a daily basis across 1000’s of ad groups and sets the optimal ad group level targets to exploit them.
2. Secondly ProfitMax can consume many signals from the advertiser to predict future performance better. Such signals can be availability, pricing changes, new products, offers or even the weather.
3. Finally the ProfitMax models can be fine-tuned to suit your business. Google’s smart bidding is actually quite conservative and of course its one-size-fits-all. ProfitMax can, if you wish, be more aggressive at spotting trends and say ramping up bids when something goes viral.
Does it really work?
Yes. These are test results from one of our client’s during a 5 week test.
The graphs show the percentage split between Google’s Maximise Conversion Value bidding and our ProfitMax solution. What you can see is that ROAS held fairly steady throughout the test. However profit was consistently higher on the ProfitMax side of the test. Overall through the duration of the test it achieved 15.3% more profit than Maximise Conversion Value.
Frequently Asked Questions
Will it work for my business?
Generally speaking, the more data there is, the more opportunities there are to find performance wins. This means it tends to be higher spending accounts that see bigger percentage wins than smaller accounts. If you spend more than 10,000 USD per month there is a great chance we can achieve the wins demonstrated above. Before setting up your bidding we will simulate the wins we can expect and if we don’t think we can give you a win, we will tell you and won’t waste your time.
Won’t changing ad group targets kick Google into a learning cycle?
No. Those learning cycles that sent performance haywire are thankfully a very rare event now. This very common pain point has we believe been fixed by Google.
Source: Google support