Ask any marketer today about the superiority of automated bidding vs. manual rule-based bidding and you’ll probably find that many would agree with you. But…
What is the true difference between rule-based bidding and AI-based bidding?
Is there really so much of a gap that changing over will impact your efficiency growth? That is the heart of what we’ll be tackling today as we argue about the benefits of traditional bidding over the new Comparison Shopping Services (CSS) that are populating the market!
Stick around and learn how your Google Shopping campaigns may be impacted with the addition of CSS solutions like Bidbrain™!
The Google Shopping Bidding Methods Spectrum
I think most of us know by now that Google Shopping Ads (also known as Product Listing Ads) are the most effective way of generating new business online. It stands to reason then that we put in a sizable amount of effort trying to understand the different bidding strategies available.
Of course, there are endless possibilities as far as bidding methods are concerned, but there is a clear ‘spectrum’ that most marketers experience:
- Manual: This is the one that most marketers tend to default to when they’re just starting out or have very little experience with any other form of bidding. However, it’s definitely not the most efficient approach in the long run. Seeing as Google Shopping campaigns require a certain amount of management to keep up-to-date, error-free, and always improving — which means that you will have to heavily monitor your progress in order to get the results that you want.
- Rule-Based: The next stage of the spectrum is slightly more involved. Google allows you to create automated ‘rules’ that can be applied to your account settings in real-time when certain conditions are met (i.e., boosting your bid when your ad is taken off the first page results.) It does require quite a bit of management still, but, in comparison to manual (set-it-and-forget-it) bidding, your monitoring time should be lessened without having to sacrifice much control over how you’re bidding.
- Fully Automatic: Fully automatic bidding comes in the form of using AI-based programs like Google’s Smart Shopping or Smart Bidding Strategies (as well as third-party CSS solutions like Bidbrain™.) These come with intelligent algorithms that place bids based on the best-performing bid cluster possibilities. And, while they do require that you give up control over how your campaigns are run, which makes some marketers leery, There’s no denying that they’re highly effective — case in point, Bidbrain™ is presenting over a +20-50% increase in sales at a lower Cos-% (Cost of Sales) or higher ROAS (Return on Ad Spend).
Most marketers tend to fall somewhere in between the middle (rule-based) and the end of the spectrum (fully automatic). But, as I’m sure you can already tell, there is a distinct difference between the two. This brings us to our next point:
Rule-Based Bidding vs. AI-Based Bidding
Keeping in mind that the subject of this particular debate is efficiency. You can probably guess that there really is only one true winner here.
The question is, how much more efficient is AI-based bidding when compared to manual, rule-based bidding? Is the difference so great that not changing over will greatly impact your chances of getting a leg up over your competitors?
The short answer is… yes, rule-based bidding can gravely impact your efficiency.
Fredrik Lindros, CEO of Speqta (the developers of the advanced AI-powered bidding solution, Bidbrain™), has a rather comical—but also incredibly accurate—way of describing this difference when he says: “Bidbrain’s ‘brain’ (its AI) is capable of managing and analyzing endless amounts of data — more than any regular human can handle, or even a thousand Einsteins, if you want to get really specific about it.”
It sounds a little over-exaggerated when stated outright like that. But Lindros couldn’t be any more accurate. Think of it this way, at any given moment, Bidbrain’s algorithm is capable of using all the different parameters and data available and generate 5,000-10,000 clusters and different bidding strategies – allowing it to precisely determine bid success in real-time.
That is the difference in efficiency here, and it’s neither negligible nor insignificant.
Bottom Line: How Does Rule-Based Bidding Impact Efficiency Growth?
In conclusion? Rule-based bidding methods can be used to a certain level of success. It’s worked for thousands of marketers before, and it shouldn’t stop you from nabbing new customers here and there. But it certainly isn’t capable of operating at the same level of efficiency as AI-based bidding solutions like Bidbrain – and this is a big problem if you’re looking to catch up with competitors who have the backing of such powerful machines.