The PPC community has been going wild over the change that is coming to Google Ads around bidding for campaigns limited by budget on August 18th. There is some belief that this is going to be a broader smart bidding update than what Google communicated.
We covered this in detail back on June 2nd, which I have been updating with Google comments, plus we covered it before on June 15th. In short, Google Ads reps are downplaying this change, while the PPC community is up in arms about it. It is weird to see.
That being said, Maggie Humphrey asked a solid question in a LinkedIn post from Joey Binder. Maggie asked:
What gets me is Google says this should only impact campaigns that are "Limited by Budget," but they also say they're changing the bidding systems to provide more predictable performance. That sounds like a broader Smart Bidding update to me. If the new bidding behavior is less conservative from the start, it seems like we're simply sacrificing excess efficiency so Google can spend more while calling it "predictability."
Ginny Marvin, the Google Ads Liaison, replied:
Yes this only impacts budget-constrained campaigns using a target because this is already the bidding behavior when campaigns using a target aren’t budget constrained.This change ensures expected bidding behavior will be the same regardless of whether a campaign using a target is budget-constrained or not. And that if advertisers do opt to change budgets on budget-constrained campaigns, they should expect more stable performance behavior as the campaign scales.
Performance has often fluctuated unexpectedly, especially in budget-limited campaigns, as the budget is changed. This has been a frustrating experience for advertisers, making it difficult to scale campaigns with confidence. That’s what this change aims to address.
In short we're making the controls clearer; the target will more precisely control your ROI.
Maggie asked for clarification saying:
Just want to make sure I’m interpreting this correctly, if a campaign on tROAS bidding is exceeding its target but not Limited By Budget it will continue to behave as it does today. But, if/when that same campaign becomes Limited By Budget, we should expect that campaign ROAS to drop closer to the current target, unless budget is increased?
Ginny replied:
To answer your question:Nothing is changing in the way the bidding system works when campaigns using a target are not budget constrained, and you’re correct that those campaigns will continue to behave as they do today. Typically these campaigns do tend to perform toward the bid target.
If the campaign does become limited by budget, you should not expect to see a change in the average target performance because the expected bidding behavior will be the same regardless of whether the campaign is limited by budget or not after this update goes into effect.
I asked Greg Finn to go into more detail on this back and forth on our It's New show yesterday, he did so at the 10:10 mark in this video:
It is worth watching his 6 minute overview on this change.
Forum discussion at LinkedIn.
