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Automated Bidding: Deriving Smart Insights - Sergio Cano

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Automated Bidding: Deriving Smart Insights

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Automated Bidding: Deriving Smart Insights - Sergio Cano

  1. 1. A U T O M A T E D B I D D I N G : D E R I V I N G S M A R T I N S I G H T S PRESENTED BY: SERG IO CA NO AC COUNT D I REC TOR O F PAID SEARCH & CRO, WPROMOTE
  2. 2. A B O U T 2 SERGIO CANO ACCOUN T D IR EC TOR | WPR O MOTE LOS ANGE L ES NATI V E Hollywood, CA MATH PER SON TU RNE D MA R KE TER Aspired to be an actuary CONNEC T WI TH ME: Linkedin: /secant Email: sergio@wpromote.com Reddit: @marketing_inquisitor Paid Search & Conversion Rate Optimization
  3. 3. XA G E N D A 2 3 4 5 6 1 WHAT I S AU TO M AT E D BIDDING? AUTO MAT IO N I S THE FUTURE BID DING OP P ORTUNITIE S LIM ITATI O NS & CO NST R AINTS CASE ST UD I ES Q&A WHAT’S ON DECK
  4. 4. W H A T I S A U T O M A T E D B I D D I N G ?
  5. 5. W H A T I S A U T O M A T E D B I D D I N G ? 5 WHAT IS AUTOMATED BIDDING? ˈÔ D Ə ˌMĀT - ˈBIDING “ ” Precise auction-time level bid optimization tailored to each user’s unique search and web context. It does this by leveraging algorithms by evaluating relevant contextual signals present at auction-time such as time of day, the specific ad, or the user’s device, location, browser, operation system, and much more.
  6. 6. W H A T I S A U T O M A T E D B I D D I N G ? 6 WHY AUTOMATED BIDDING? B I D D I N G I M P A C T S P E R F O R M A N C E A D A U C T I O N I S V E R Y D Y N A M I C A T T R I B U T E I S M O R E C O M P L I C A T E D Bids influence how often ads show up for each search query. If we are not bidding correctly, there is a lot of wasted budget and missed opportunities. Most users are different, and it’s crucial to show up at the right moment in the ad auction. However, the dynamics of the auction are always changing. Advertisers gather more data points of user behavior and touch points than before. Taking into account all these signals to tailor bids is nearly impossible.
  7. 7. W H A T I S A U T O M A T E D B I D D I N G ? 7 WHY AUTOMATED BIDDING?KEYWORDBID DEVICE LOCATION TIME GENDER AGE HOUSEHOLD INCOME INTERESTS SITE VISITOR IN-MARKET SIMILAR AUDIENCE SEARCH PART NE R LIFE EVEN T CONVERSION PATH AD E XT ENSIONS SEARCH QUERIE S OPERATING SYSTEM LAN GUAGE AD CHAR ACTERIST ICS DEVICE TYPE WEB BROWSERS }And Much More… Available Bidding Options Automated Bidding Options
  8. 8. W H A T I S A U T O M A T E D B I D D I N G ? 8 BIDDING POSSIBILITIES 1 5 , 5 5 8 , 4 8 0 B I D S F O R E A C H K E Y W O R D E X C L U D E S A U D I E N C E S & I N T E R E S T S 1 2 3 4 5 6 7 210 DMAS 7 DAYS IN A WEEK 24 HOURS IN A DAY 3 DEVICE TYPES 7 INCOME BRACKET GROUPS 3 GENDERS 7 AGE COHORTS
  9. 9. A U T O M A T I O N I S T H E F U T U R E
  10. 10. A U T O M A T I O N I S T H E F U T U R E 10 DISRUPTING THE INDUSTRY N E E D S M A R T E R I N S I G H T S R E P O R T I N G & D A T A I S M O R E D A T A R I C H O U R R O L E S A N D R E S P O N S I B I L I T I E S
  11. 11. A U T O M A T I O N I S T H E F U T U R E 11 WIN LOSS COUNTER 72 WINS 26 LOSSES Win Loss Status Win Loss 2016 2018
  12. 12. A U T O M A T I O N I S T H E F U T U R E 12 RESULTS VS EFFORT Automated bidding still relies on marketers to build out campaigns, choose keywords, set budget, write ad copy, and design landing page strategy. Automated bidding frees up a lot of time on the keyword rebidding by tailoring dynamic bids at the search query and placement level in the ad auction. There are a lot more signals than ever before which adds more complexity into keyword and placement optimizations. MANUAL BIDD ING AUTO MATED BID DING TIM E RESULTS
  13. 13. B I D D I N G O P P O R T U N I T I E S
  14. 14. B I D D I N G O P P O R T U N I T I E S 14 DELAYING GRATIFICATION More than 40 years ago, Walter Mischel, PhD, a psychologist now at Columbia University, explored self-control in children with a simple but effective test. His experiments used “marshmallows” which later was known as the marshmallow test. SET UP Preschoolers were given a plate of treats such as marshmallows. The children were told that the researcher had to leave the room but were given simple instructions before leaving: CHOICES 1.) If the child waited until the researcher returned, the child would receive two marshmallows. 2.) If the child simply couldn’t wait, the child could ring a bell and the researcher would come back immediately, but the child would only be allowed one marshmallow. WHAT SET UP CHOICES
  15. 15. B I D D I N G O P P O R T U N I T I E S 15 THE DOUBLE-SIDED BLADE OF BIDDING A D V E R T I S I N G B U D G E T P E R F O R M A N C E
  16. 16. B I D D I N G O P P O R T U N I T I E S 16 THE DOUBLE-SIDED BLADE OF BIDDING Automated bidding aims to maximize daily budgets held to bidding strategies’ performance constraints such as target CPA or ROAS.
  17. 17. B I D D I N G O P P O R T U N I T I E S 17 PUTTING THE BAIT OUT S M A R T B I D D I N G B A I T
  18. 18. B I D D I N G O P P O R T U N I T I E S 18 PAY PER CONVERSION (DISPLAY) DISPLAY ONLY W O R K S W I T H S M A R T D I S P L AY A N D T R A D I T I O N A L D I S P L AY C A M PA I G N S
  19. 19. B I D D I N G O P P O R T U N I T I E S 19 PUTTING THE BAIT OUT $3,129 15 129 $2,418 39 383 *Date Range: ~60 days Pre & Post Change. PROBLEM: Better return on display campaigns overall from a click point of view WHAT HAPPENED? Dynamic Remarketing campaign drove a lot of view through conversions but did not drive a ton of click through conversions. Pay Per Conversion (risk free) fixed that. BEFORE PAY PER CONVERSIONS (AVG) Spend CTC VTC AFTER PAY PER CONVERSIONS (AVG) Spend CTC VTC -22.7% +160% +196.9%
  20. 20. B I D D I N G O P P O R T U N I T I E S 20 PUTTING THE BAIT OUT (CONT.) REMEMBER P R O V I D E A S M U C H I N F O R M AT I O N A S P O S S I B L E . I N T H I S C A S E , I C R E AT E D A S M A N Y R E M A R K E T I N G L I S T S A N D L AY E R E D T H E M O N T O A D Y N A M I C D I S P L AY C A M PA I G N . “U NCAP PED” DAILY BUDGETS Only paid whenever a conversion happened. Happily, increased daily budgets from $100/day gradually to $10,000/day SWITCHED FROM MANUAL C PC TO TARGET CPA A condition to do pay per conversion is to switch over to target CPA. Unfortunately, portfolio bidding isn’t available for this pay model. VE RY LOOSE TARGET CPA (3X OF SEARCH) Gave it the best effort for the algorithm to have a lot of wiggle room for it to learn, in an effort to let the algorithm try to maximize the spend on how the campaign was configured.
  21. 21. L I M I T A T I O N S & C O N S T R A I N T S
  22. 22. L I M I T A T I O N S & C O N S T R A I N T S 22 CONVERSION TIME LAG? TIME LAG Time lag, also known as conversion cycles are “days it takes to get a conversion” Google often refers to this as conversion cycles on their end, but can see this under search attribution reports or segment report in UI MEASUREMENT Most conversions take place within the first week however every industry is different. When reading the time lag report under search attribution. ALWAYS ROUND UP. In this case, we want to measure performance from 4 days ago in the bid strategy report.
  23. 23. L I M I T A T I O N S & C O N S T R A I N T S 23 HOLDING CONVERSIONS EQUAL Shouldn’t be a problem for many advertisers but keep this in mind because the algorithm tries to optimize towards “conversions” and treats them all equally. So only add meaningful actions in your “include in ‘conversions’” column. Beware of the Checked box “Include in conversions” under each conversion action.
  24. 24. L I M I T A T I O N S & C O N S T R A I N T S 24 THINGS TO LOOK OUT FOR CONVERSION TYPES The algorithm treats CONVERSIONS equally. So if you have a phone call to your business to “count in conv” column, it will weigh that the same as someone purchasing (Ecommerce) if using tCPA. If you have multiple conversions that are technically equal (call extensions, on-site on call, or form submissions), the algorithm gets excited and doesn’t know which one to pick in the real-time auction. MEASUREMENT Most conversions take place within the first week however every industry is different. When reading the time lag report under search attribution. ALWAYS ROUND UP. In this case, we want to measure performance from 4 days ago in the bid strategy report.
  25. 25. L I M I T A T I O N S & C O N S T R A I N T S 25 SETTING IT UP Under campaign settings Navigate to bidding Click on “Change bid strategy” It will auto suggest a target CPA or target ROAS goal. If this looks right, then accept change. Recommended but not required: Create a bid portfolio so you can always reference the bid strategy report even if you revert back later.
  26. 26. L I M I T A T I O N S & C O N S T R A I N T S 26 THE DOUBLE-SIDED BLADE OF BIDDING L E A R N I N G P E R I O D ( W E E K S 1 & 2 ) O P T I M I Z AT I O N S ( W E E K 3 ) C O N T R A I N T S ( O N G O I N G ) EXPECTATIONS Set Up Realistic Goals, Setting The Last 30 Days Is A Good Starting Point. ROAS / CPA Fluctuations Shifts in impressions share Having Doubt In Automation The more conversions in a 30 day period, the better Target ROAS campaigns require more conversions to work effectively than target CPA STRATEGY Pick a bid strategy that makes sense to your business and your campaign efforts Try not to make any changes the first two weeks or in first learning period Set campaign delivery method to standard when using smart bidding strategies REPORTING Checking In On Bidding Strategy Portfolio Measure out the delta in performance for CPA and ROAS MAKE SURE TO AVOID MAKING MAJOR CHANGES DURING “LEARNING PERIODS” When examining bid strategy reports, keep in mind if there are delayed conversions we should give the algorithm extra time to backfill those conversions to make any call ADJUSTMENTS Whenever making adjustments to target CPA or ROAS try increasing it no more than +/- 10-15% at a time to reduce fluctuations. You can override campaign target CPA by assigning ad group target CPA. However, adjusting the target CPA at campaign level will automatically override the ad group again. You still have the ability to examine search queries. Still add any negative keywords that you believe are not relevant to business or noncompliant.
  27. 27. L I M I T A T I O N S & C O N S T R A I N T S 27 BID STRATEGY REPORTS This is a snapshot report on performance of the smart bidding strategy for you to understand the status and limitations. Found by clicking the Bid Strategy link under campaign reporting. This report will tell you, when the algorithm is “learning” marked grey at the bottom of the graph. High level view of how performance is doing, you can consolidate using a portfolio bidding strategy for multiple campaigns.
  28. 28. L I M I T A T I O N S & C O N S T R A I N T S 28 BID STRATEGY STATUS 1. No campaigns associated with the strategy. INACTIVE NOT LIMITED LEARNING BID STRATEGY IS NOT ACTIVE DUE TO: THE BID STRATEGY IS ACTIVE. IT’S STUDYING… 2. All keywords, ad group, or campaigns are paused. Everything is good ;) After making changes to the campaign or bid strategy, the system will go into a “learning” state. Don’t make too many changes at once. Make changes outside of “learning.”
  29. 29. L I M I T A T I O N S & C O N S T R A I N T S 29 MONITORING THE MACHINE Spikes are normal during learning periods. These are denoted in the bid strategy reports and highlighted in grey. Making too many changes to the target CPA or ROAS can trigger learning periods. When it’s not grey, you can make adjustments as needed. Avoid making too many changes. +/-10% increments.
  30. 30. L I M I T A T I O N S & C O N S T R A I N T S 30 NICE THINGS TO HAVE Having the ability to choose which conversion metric a smart bidding strategy can optimize against. Seasonality controls. Stimulating data for Target ROAS bidding strategies. Actual visibility into what it’s doing.
  31. 31. C A S E S T U D I E S
  32. 32. C A S E S T U D Y X COMPETING AGAINST GOOGLE 10 20 30 40 50 60 70 80 Conversions Human Conv Google Conv
  33. 33. C A S E S T U D Y X COMPETING AGAINST GOOGLE H U M A N V S S M A R T B I D D I N G GROUP IMPR CLICKS CPC CONV CPA CVR HUMAN 938,149 34,855 $3.33 2,398 $48.40 6.88% GOOGLE 916,757 36,854 $3.98 2,694 $54.45 7.31% $0 $15 $30 $45 $60 HUMAN GOOGLE $54 $48 CPA HUMAN GOOGLE 0 675 1,350 2,025 2,700 2,694 2,398 Conversions
  34. 34. C A S E S T U D Y X Target CPA was set to $53.21 (Google’s recommendations) The amount of time spent on re-bidding could have been spent elsewhere to test ad copy and perhaps landing page. Campaign experiment took some of my control traffic away, preventing me winning (still upset). It is difficult to go against the Smart Bidding algorithm with conversion rich campaigns. While, I had a more efficient CPA, volume of conversions was better overall. COMPETING AGAINST GOOGLE RESULTS
  35. 35. C A S E S T U D Y X VS Set Up The Test Using AdWords Experiments To Split The Campaign In Half And Allow For Proper A/B Testing. CPA Was Set In Each Engine Due To Different Platforms, There Are Different Tags. In Any Case, AdWords Smart Bidding Still Ended Up Winning Factoring In Both Conversions. Attribution Of Tag Vary, Doubleclick Is Day Of Conversion Vs AdWords Is Day Of Click GOOGLE VS GOOGLE
  36. 36. C A S E S T U D Y X COMPETING AGAINST GOOGLE A D W O R D S TA G GROUP IMPR CLICKS CPC CONV CPA CVR DOUBLECLICK 117,946 4,382 $2.93 286 $44.89 6.53% GOOGLE ADS 185,972 7,148 $3.74 485 $55.12 6.78% $0 $15 $30 $45 $60 DOUBLECLICK GOOGLE ADS $55 $45 CPA F L O O D L I G H T TA G GROUP CONV CPA CVR DOUBLECLICK 321 $40.00 7.31% GOOGLE ADS 374 $71.48 5.22%
  37. 37. C A S E S T U D Y X FULLY EMBRACING SMART BIDDING $0 $80 $160 $240 $320 0 200 400 600 800 Month 1 Month 2 Month 3 Month 4 Month 5 Conv CPA $185$196$192$254$307 709 338 212215 611611 215 212 338 709 C O N V E R S I O N S V S C PA S W I T C H I N G O V E R T O A U T O M AT I O N M A N U A L B I D D I N G R U L E S & S C R I P T B A S E D B I D D I N G
  38. 38. C A S E S T U D Y X 110% Increase in Conversions month over month with automation. 36% adoption of automation in month 4 90% adoption of automated bidding in month 5 MAKE SURE TO CHECK THE BID STRATEGY REPORT OFTEN TO ENSURE EVERYTHING IS FINE. FULLY EMBRACING SMART BIDDING
  39. 39. C A S E S T U D Y X W E L E A R N E D … Purposely limit campaigns using its daily budget and scale it up from there. This ensures the algorithm wants to spend as much money as you continue to scale up. S O W E … Started rolling out a bid strategy for each campaign until we achieved better results. FULLY EMBRACING SMART BIDDING
  40. 40. K E Y T A K E A W A Y S 40 RECIPE FOR SUCCESSFUL SETUP P I C K A R E A L I S T I C TA R G E T G O A L ( + / - 1 5 % O F C U R R E N T ) A LW AY S C R E AT E A B I D D I N G P O R T F O L I O E V E N W I T H 1 C A M PA I G N S E T D E L I V E R Y M E T H O D T O S TA N D A R D M A K E S U R E T H E R E I S O N LY O N E C O N V E R S I O N A C T I O N D O N ’ T A P P LY N O N - 1 0 0 % B I D A D J U S T M E N T S W H E N M A K I N G A D J U S T M E N T S D O I T I N 1 0 % I N C R E M E N T S AV O I D A D D I N G I N T O O M A N Y N E W A D C O P Y A N D K E Y W O R D S C O N T I N U E E X A M I N I N G S E A R C H Q U E R I E S & P L A C E M E N T S A D R O TAT I O N S E T T O O P T I M I Z E C R E AT E A B A C K U P O F C A M PA I G N V I A E D I T O R D O N ’ T F O R G E T T O L AY E R I N A U D I E N C E L I S T S Y O U D O N ’ T H AV E T O L I S T E N T O G O O G L E ’ S R E C O M M E N D AT I O N S
  41. 41. Q & A

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