Bidding Strategies: Manual vs. Automated Bidding in Digital Advertising

In the world of digital marketing, bidding strategies play a crucial role in determining the success of advertising campaigns. Whether you’re running ads on Google Ads, Facebook Ads, or any other platform, the way you bid for ad placements significantly impacts your campaign’s performance, cost-efficiency, and return on investment (ROI).

Bidding in digital advertising refers to the process of setting the maximum amount you are willing to pay for a click, impression, or conversion. Advertisers must choose between two main bidding strategies: Manual Bidding and Automated Bidding. Each strategy has its own advantages and disadvantages, and understanding when to use each can help you optimize your campaigns for better performance.

In this detailed guide, we will explore:

• The fundamentals of bidding in digital advertising
• What is manual bidding?
• Pros and cons of manual bidding
• What is automated bidding?
• Pros and cons of automated bidding
• Comparing manual and automated bidding strategies
• When to use manual or automated bidding
• Best practices for optimizing your bidding strategy

By the end of this article, you will have a deep understanding of how to choose and implement the right bidding strategy for your digital advertising campaigns.

Understanding Bidding in Digital Advertising

Before diving into the comparison between manual and automated bidding, it is important to understand how bidding works in digital advertising.

Most advertising platforms, including Google Ads and Facebook Ads, use an auction system where advertisers compete for ad placements. This means that advertisers set a bid (either manually or automatically) to determine how much they are willing to pay for a certain action, such as:

• Cost Per Click (CPC) – The amount paid for each click on the ad.
• Cost Per Thousand Impressions (CPM) – The amount paid per 1,000 ad impressions.
• Cost Per Acquisition (CPA) – The amount paid for each conversion (e.g., a sale, sign-up, or lead).
• Return on Ad Spend (ROAS) – A strategy that focuses on maximizing revenue for every dollar spent on ads.

The goal of any bidding strategy is to maximize the effectiveness of the budget while achieving campaign objectives, such as increasing traffic, conversions, or brand awareness.

Now, let’s dive into manual bidding and automated bidding, their differences, and how to choose the right one.

What is Manual Bidding?

Manual Bidding allows advertisers to set their own maximum bids for keywords, placements, or audiences. This gives advertisers full control over how much they are willing to spend on each action.

For example, in Google Ads, if you use manual CPC bidding, you can set a maximum bid for each keyword, meaning that Google will never charge you more than that amount for a single click.

Advantages of Manual Bidding

1. Full Control Over Bidding

   • Advertisers can adjust bids for specific keywords, placements, devices, and audiences.
   • Allows for detailed optimization based on performance.

2. Better Budget Allocation

   • You can distribute your budget effectively across high-performing keywords or ad groups.

3. Transparency and Predictability

   • Since you set the maximum bid, you know exactly how much you are spending per click or impression.

4. Better Performance for Niche Campaigns

   • For advertisers with specific knowledge of their audience, manual bidding allows fine-tuning bids for better results.

Disadvantages of Manual Bidding

1. Time-Consuming

   • Requires continuous monitoring, analysis, and adjustments to optimize performance.

2. Difficult to Scale

   • If you’re running large-scale campaigns with thousands of keywords, manual bidding becomes challenging.

3. Requires Expertise

   • Beginners may struggle to determine the right bid amounts without experience or historical data.

4. Risk of Overpaying or Underbidding

   • Without automation, there is a higher risk of setting bids too high (wasting budget) or too low (losing out on valuable traffic).

What is Automated Bidding?

Automated Bidding uses machine learning and artificial intelligence (AI) to adjust bids in real time, based on various factors such as competition, device, location, time of day, and user behavior.

Platforms like Google Ads and Facebook Ads offer multiple automated bidding strategies designed to optimize different campaign goals.

Types of Automated Bidding Strategies

1. Maximize Clicks – Adjusts bids to get the most clicks within the allocated budget.
2. Maximize Conversions – Optimizes bids to generate the highest number of conversions.
3. Target CPA (Cost Per Acquisition) – Aims to get as many conversions as possible at a specified cost per conversion.
4. Target ROAS (Return on Ad Spend) – Adjusts bids to maximize revenue based on a target return on investment.
5. Enhanced CPC (eCPC) – A hybrid strategy that allows for manual bids but adjusts them automatically when higher conversion chances are detected.
6. Target Impression Share – Ensures that ads appear in a certain percentage of auctions, such as the top of the page or first position.

Advantages of Automated Bidding

1. Saves Time and Effort

   • Reduces the need for constant manual adjustments, allowing advertisers to focus on strategy.

2. Real-Time Adjustments

   • AI-driven bidding optimizes in real time based on market conditions and competition.

3. Improved Efficiency

   • Uses historical data and machine learning to make data-driven decisions.

4. Scalability

   • Ideal for large-scale campaigns with thousands of keywords, as AI can manage bidding efficiently.

5. Better Performance for Conversion-Driven Campaigns

   • Works well for advertisers focusing on maximizing conversions rather than micromanaging bids.

Disadvantages of Automated Bidding

1. Less Control Over Bids

   • Advertisers do not have direct control over individual bids, which may not be ideal for highly strategic campaigns.

2. Requires Sufficient Data

   • Automated bidding works best when there is enough historical data to analyze. New campaigns may struggle to optimize effectively.

3. Potentially Higher Costs

   • AI-driven bidding may sometimes increase bids aggressively, leading to higher ad spend.

4. Limited Transparency

   • Advertisers may not fully understand why certain bid adjustments are made, making it harder to troubleshoot performance issues.

Manual Bidding vs. Automated Bidding: Which One is Right for You?

When to Use Manual Bidding?

• If you have a small budget and need full control over costs.
• If you are running a niche campaign with highly specific targeting.
• If you have experience in bid optimization and prefer hands-on management.

When to Use Automated Bidding?

• If you are running large-scale campaigns with thousands of keywords.
• If you want to save time and let AI handle bid adjustments.
• If your goal is maximizing conversions and ROAS using machine learning.

Best Practices for Optimizing Your Bidding Strategy

Start with Manual Bidding for New Campaigns

• • Gather data before switching to automated bidding.

Use Enhanced CPC as a Transition Strategy

• • If you want some level of automation while maintaining control, Enhanced CPC is a good middle-ground option.

Monitor and Adjust Regularly

• • Even with automation, regularly review performance and adjust strategy accordingly.

Set Realistic Goals for Automated Bidding

• • Define CPA or ROAS targets based on historical performance.

Test Different Strategies

• • Experiment with different bidding strategies to find the best fit for your campaign.

Conclusion

Choosing between manual and automated bidding depends on your campaign goals, budget, experience level, and the amount of control you want over your bids.

• Manual bidding is best for advertisers who want full control and are willing to invest time in optimization.
• Automated bidding is ideal for scaling campaigns efficiently while leveraging machine learning.

By understanding the strengths and weaknesses of each bidding strategy, you can make smarter decisions and drive better results in your digital advertising campaigns.