One of the common fears advertisers have when it comes to using smart bidding on their campaigns is the inability to fully control performance. This is why the news that Google has extended the bid and budget simulator tools has been greeted with open arms.
How Does The Bid Simulator Work?
The bid simulator has been extended to campaigns which use Target ROAS. They had previously been available on manual and Target CPA bidding. It works by forecasting how a change to the set Target ROAS percentage would impact the performance of the campaign. Auction data from the last seven days is used and it is assumed that factors such as ads, keywords and landing pages remain the same.
My Campaigns Are Running Out Of Budget Too Early?
The budget simulator is going to work in a similar way as it will also use the last seven day of data. Both Maximise Clicks and Maximise Conversions have the aim of spending an entire daily budget of a campaign whilst trying to achieve the highest amount of clicks or conversions it possibly can. This can lead to instances of a daily budget running out before the end of the day, therefore losing out on potential traffic and customers. It will show a projection of how increasing the daily budget of a campaign will increase metrics such as clicks and conversions, as well as the minimum bid that would be required.
Potential Issues Faced When Using Maximise Strategies
Unlike bid strategies such as Target ROAS or Target CPA, there is no set target for the Google algorithm to try and reach, which increases the likelihood of higher CPCs. It will bid higher if there is a bigger probability of a search leading to a click or conversion. This can become an issue if a click doesn’t lead to a conversion, as costs will be higher but the return won’t be.
As the projections from each tool are based on historical data, and that it is rare for levels of performance to stay the exact same, keep in mind that actual results are likely to vary. But they can be helpful for getting an idea of how campaigns could perform should certain changes be made.