Automatic bidding aims for the most clicks, not the most orders, so it favours cheap ones. Restrict the campaign to search, set bids yourself or cap them, add negative keywords, and track enquiries before judging it.

A setting chosen on the first day

A florist opening an AdWords account reaches the bidding step: set the price of each click yourself, or let AdWords set bids to get as many clicks as the budget allows.

The second sounds sensible for someone who does not yet know what a click is worth. The florist picks it, sets a daily budget and goes back to the shop.

A month later, the account shows plenty of clicks at a low average cost. The phone and the order form have been about as quiet as before.

What the setting aims for

The option does exactly what it says. Its goal is the largest number of clicks the budget can buy, with nothing about who clicks or why.

With a fixed budget, the way to buy the most clicks is to buy the cheapest. So the budget drifts toward wherever clicks cost least and away from where they cost most.

Clicks cost most where advertisers compete: specific searches from people ready to buy, such as flower delivery with a neighbourhood name, near the top. Those are the clicks a florist needs.

Where the cheapest clicks come from

Cheap clicks are cheap for a reason. Few advertisers want them:

Some of these clicks come from real customers. Many come from people looking for pictures, gardening tips or the meaning of a flower, who were never going to order an arrangement.

Clicks are not orders

AdWords reports clicks and their cost because those are what it controls. Without conversion tracking, it cannot tell which clicks led to an order or a call, and neither can you.

Set up conversion tracking before judging any bid setting: a code on the order confirmation page, and calls from the ads counted where possible. Then compare cost per order, not cost per click.

Phone orders matter to a florist as much as web orders, so count calls as well, or the account will undervalue the searches that make the phone ring.

When manual bids make more sense

Manual bids let you pay more for searches that bring orders and less for the rest: high on delivery searches in the florist's area, low or nothing on single words.

They suit a small account with a modest number of keywords, run by someone who will look at it every week. The extra attention is where the value comes from.

Once orders are tracked, manual bidding can also let AdWords nudge each bid up or down for clicks it judges more likely to lead to an order.

When a bid limit makes more sense

If you stay with automatic bidding, set a bid limit: the most it may pay for any single click. That stops it paying more for a click than an order would be worth.

A limit only caps the price; it does not steer the budget toward better searches. Pair it with tighter keywords and a search-only campaign, or the budget still drifts.

A worked example

A toffee maker in a small town cooks butter toffee in a commercial kitchen and sells it at markets and online, in gift tins shipped across Canada.

Its first campaign used automatic bidding, broad keywords such as toffee and candy, and a campaign type that adds the Display Network. Clicks were cheap and steady; orders from the ads were rare.

The search terms report showed why: toffee recipe, how to make toffee, sticky toffee pudding, toffee apples. The placements report showed clicks from recipe websites and game apps.

The campaign now runs on search alone. Recipe, how to, pudding and homemade are negative keywords, gift searches use phrase match, and manual bids are highest on gift tins and toffee delivery.

Orders from the website are tracked as conversions, and the search terms are read every Monday. The budget now goes to searches from people looking to buy, with ads shown higher for them.

Search only, with matches that fit

A new account is easier to judge on the search network alone. Display advertising works differently and needs its own campaign, its own ads and its own budget.

Broad match shows ads for searches AdWords considers related, which is where the recipe searches came from. Phrase match, or broad match with plus signs, stays closer to what you sell.

Negative keywords block the searches you never want: free, recipe, how to, jobs, and whatever the search terms report turns up next.

Watching the first month

Each week of the first month, go through the search terms report and add negatives for anything irrelevant. Segment the results by network to see how many clicks came from partners or websites.

Watch the average position on the keywords that matter. Delivery searches sitting at the bottom of the right side mean the bids there are too low to be seen.

And compare conversions with cost each week. A handful of dearer clicks that bring orders is worth more than a pile of cheap ones that bring none.

The counter-case

Automatic bidding is not wrong everywhere. For a new account run for a few weeks only to learn which searches exist and what they cost, it can be a reasonable start.

It can also suit an advertiser whose every click is worth about the same, such as a broad awareness campaign with a fixed monthly budget.

In either case, set a bid limit, keep the campaign on search and read the search terms. The setting buys volume; only the advertiser can decide which volume is worth having.

Steering the budget toward orders

  1. Turn on conversion tracking for orders and calls.
  2. Restrict the campaign to the search network.
  3. Read the search terms from the first month.
  4. Add negative keywords for every irrelevant search.
  5. Tighten match types on your best keywords.
  6. Switch to manual bids, or set a bid limit.
  7. Compare cost per order each week, not cost per click.

Step one has to come before the rest. Without knowing which clicks became orders, every bid change is a guess, however carefully the keywords are chosen.

When clicks climb and enquiries stay flat, the bid setting is worth checking before any rival is blamed, and suspecting a competitor is clicking your ads lists the other checks.

Frequently asked questions

What does automatic bidding in AdWords aim for?

The largest number of clicks your budget can buy. With a fixed budget, that means favouring the cheapest clicks, wherever they come from, whether or not they lead to orders.

Why are cheap clicks often poor ones?

They are cheap because few advertisers want them: vague searches, low positions, partner sites and the Display Network. Many come from people with no intention of buying.

Should a small business use manual bids?

Often, yes, if someone will check the account weekly. Manual bids let you pay more for searches that bring orders and less for those that do not.

What does a bid limit do?

It caps what automatic bidding may pay for any single click. It does not steer the budget toward better searches, so it works best with tight keywords.

How do I see which searches triggered my ads?

In the Keywords tab, the search terms report shows the real searches behind each click, and any irrelevant one can become a negative keyword.

Why track conversions before changing bids?

Without it, nobody knows which clicks became orders or calls. Every bid change is then a guess, judged on clicks and cost alone.

West Coast Media Solutions Inc. provides web design, web development, hosting, digital marketing, and business consulting to organisations across Canada, drawing on more than twenty-five years in the field.

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