Advanced Bidding Strategies

Advanced Bidding Strategies

November 9, 2019 0 By Luis Garrison


Advanced Bidding Strategies. My name is Nadine. I’m a Developer Programs Engineer out of the
New York City office. Now, target CPA is cost of acquisition. As I said, if the word acquisition is kind
of weird to you, just think of it as cost per conversion. Sometimes, I find it easier to think of it
that way. Let’s take that deep dive! What is target CPA? Target CPA is just a bidding strategy that
allows you to make bidding decisions based on those conversions that happen. If you know that someone is more likely to
buy your product or check out at the end (because sometimes people just click on things and
they just surf through and don’t really buy anything at the end) you don’t really care
too much about those users as the ones who actually are going to make you money. What happens is you want to end up being one
of those people who takes advantage of those conversion values and be able to feed that
back into your bidding decisions in order to bid on make the right bids wherever you
want to do your advertising. Understanding Target CPA! One of the things to keep in mind is that
the conversion values that we use are taken over the last 30 days. One thing that used to happen is there’s a
lot of machine learning that happens on the backend. I know it’s a buzzword, but trust me there’s
a lot of machine learning happening on the backend at Google. In order to determine how best to bid based
on the conversions that are being fed back to us, we look at over the last 30 days. We used to have a hard limit where you couldn’t
even use target CPA without having 30 days of data. That is no longer the case. However, I would highly recommend to have
more data in our system rather than less just because that machine learning can make a better
decision as to how best to do your bidding for you. That’s a good thing to keep in mind. If we have seven days worth of data you can’t
really make as much of a good decision as based on having 30. Another thing about target CPA is that it
uses a second-price auction. I’ll cover that in a moment for those people
excited about that. Another thing to keep in mind is that target
CPA is an average and not a maximum. So, when you’re doing your bidding with target
CPA, you’re saying that you want to stay in the ballpark of getting around two dollars
for example or two euro, rather than say I want to spend a maximum of two euro and that’s
it. Target CPA is an average. Second price auction is a little bit different. Once again, we have someone in the blue shirt
to be blue and then we’ll have well the red shirt right there in red and then we’ll have
a (why isn’t anyone wearing a yellow shirt) someone be yellow and then go back to green
in the back. Awesome! We have another auction, and this time blue
wins! With blue winning, what happens is that you
bid four dollars. However, you will not (when somebody clicks
on that ad you) be spending four dollars. You’ll be spending three dollars and one cent. You’ll be spending one cent over what the
second person behind you was. Since the second person behind him was red
with three dollars, then what happens is you end up spending at that one cent or one unit
of whatever currency you’re using above that one. That’s why it’s called second price auction. It’s the second one behind you that you’re
spending. So, how target CPA works! Any math majors or minors in the room people
who are excited about math because we’ve got graphs! This isn’t the only one. We’ve got another one coming up. On our graph we have our cost per acquisition
on our x-axis or cost per conversion if you want to think of it that way. Then we have the percent of the conversions
that you’re getting. Of course you want to stay within that larger
part of that bell curve where you get as many conversions as possible. Just to help you kind of get context, remember
in the last one we have the four dollars, the three dollars, the two dollars, one dollar
that you’re bidding off of that? Just think of that as being the same on the
x-axis. Let’s say that we set a maximum CPA of two
dollars. You’re like, “Wait a minute, Nadine! Didn’t you say that this is an average and
not the maximum?” I’ll get to that in a moment. Let’s say that we’re setting a maximum CPA
of two dollars. What happens is you end up only making whatever
is to the left because you can’t bid anything above that. With target CPA you can set a maximum and
a minimum if you want to. However, we usually recommend against that
just because you’re not able to make as much money as possible on both sides. That machine learning doesn’t have the free
will in order to try to take as much of that space under the curve as possible. What we end up doing is instead of sending
a max CPA, you can set an average CPA. That’s what was earlier when I said it’s an
average not a maximum. When we set that, you have the opportunity
to all of a sudden make money that’s over, to pick up bids that are on the right side
of that curve. If you have that average it’s going to try
to pick up as much of that bell curve as possible. In my case you can try to move your maximum
further out in order to try to take advantage of that. I do understand when you’re starting out with
this you may be concerned and think, “Hey, I don’t know if it’s a good idea just say
this but the average should be. What all the sudden, it’s trying to go out
way further than I wanted to?” I’d say in the beginning if it makes you feel
comfortable, go ahead and set that maximum CPA. Then, over time (if you find that you’re comfortable
with it) you can always remove it and stick more with the average. Target CPA might not work for everybody’s
business model. So, here are a few of the other ones. One of them is Target ROAS. Target ROAS is for people who are more along
the lines where they want to kind of set it and forget it. Let’s say you’re short staffed or people are
not able to keep track of or fine-tune things. Target ROAS would fall more into your category. Target CPA, if you notice, does require a
little bit of trying to fine-tune things until you reach the right point. Target ROAS is one where you can more set
it and not have to constantly keep track. The other one that we have here is enhanced
cost-per-click. This is actually on the other end of the spectrum. If you really like fine-tuning things even
more than target CPA, then enhanced cost-per-click is one that you want to do. You’re able to keep track of more what conversions
have more value and then make the most of it. Here are some other strategies that don’t
fall into conversion based strategies because some people really don’t care about conversions
and it isn’t based on one of their models. Target outranking share is based on a case
where let’s say you have a competitor that you’re up against and you want to be able
to outrank them as much as possible. You have the ability to do that. The way it works is you’re able to say what
domain you want to be able to outrank. You could say what percentage of the time
that you want to outrank them. We’ll make sure to optimize the bidding strategy
that we’re doing on the backend to be able to do that. That’s really good if let’s say a competitor
decides to start pushing their advertising more. This gives me the opportunity to push back
and say I want to be able to up what percentage I’m doing. Target outraking share isn’t based on conversions. It’s based on what percentage of the time
you want to outrank a specific competitor. Another one is target search page locations. All of you who love being at the top of search,
that’s the way to go. With the target search page location, you’re
able to. I think this one more falls in line, I found,
when people are starting a business or they just want to get their name out there and
get people to just start clicking through and checking out whatever they’re selling
or whatever they’re trying to advertise. Some people tend to use that when they just
want tobe able to get the top. Target search page location works well for
that. The other one that we have, of course, is
maximizing clicks. When you’re maximizing clicks, one of them
that might work is if you’re a news site for example and all you really care about is getting
people — driving as much traffic to your website as possible. You don’t care what they buy at the end so
conversion values don’t matter. What matters to you is how often somebody
clicks on something. I found news sites to be one where they just
want to get you to their site and able to read whatever is going on.