Effective bid optimization requires understanding key concepts. Small, frequent bid adjustments are more effective than large, infrequent changes. Daily updates based on the most recent data yield better results than weekly or monthly adjustments.
I would like to share with you some bid ops insights, that hopefully provide you with motivation for your own strategies 😊
-- Understanding the difference between Bid and CPC
If your goal is to decrease ACoS, and so you drop your bids by a large amount, say 50%, but your new Bid is still above CPC, then your Bid decrease will have no impact. (It also works the same way with Campaign Budgets and Spend – if you lower Budgets but they are still above average Spend for that Campaign, then Total Spend for that Campaign will be the same as it was)
-- Size of adjustments
It is because of the point above, that I have always found it more beneficial to make smaller Bid adjustments, say 10% at a time, rather than large adjustments that Bid formulas can arrive at.
As an example, we’ve all seen those Targets that have 1 or 2 Orders, a few Clicks, and a few Impressions. Most bid formulas will arrive at a very large Bid for this Target, given its abnormally high CVR.
If you adjust the Bid to what the formula recommends, it will probably not end well... But if you incrementally work toward what the formula recommends, then as the Bid slowly increases, more data will accumulate, CVR will come down to a normal level, and the recommended Bid will decrease. This results in the converging of the incremental changes with what the formula is recommending.
-- Frequency of adjustments
It is because of the 2nd point above, that I believe daily adjustments are ideal.
If incremental adjustments are made, it may take many rounds of Bid ops to reach the final desired Bid, and if Bid ops is only run once every few days, the whole process could amount to weeks…
But on top of that, why wouldn’t you want to update bids ASAP to the most recent data?
If I compare the data from the Bid ops I ran yesterday vs when I ran it today, today’s data will not only have an additional day of fresh data, but many of the days within the lookback window will have revised Sales figures, since the Sales for the Clicks that took place on those days has finally attributed.
If one makes Bid adjustments every few days, or weekly, then there are several days per week that their Bids are not based on the freshest data. This will results in the revisions to the data accumulating for several days before “acting on it” with running Bid ops, which is less than idea.
With all this being said, implementing Marketing Stream is the ideal solution – all data populates your DB in real-time, allowing all Sales attribution and Spend adjustments to be fully reflected throughout the day.
Despite all that I just covered, the fact still exists that the data for Bids ops is based off of ‘looking in the rear view mirror’ – it has this inherent flaw, so don’t over-think it… 😁