Google has several automated bidding options, in which an advertiser can chose to allow AdWords to automatically choose keyword bids in order to maximize clicks or conversions. However, it is advisable not to use autobid, especially when starting out.
There are many reasons for this advice, but the three biggest are as follows:
1. Autobidding means advertisers lose control over where the ads appear on the page (position) and how much they are paying for them (CPC). These two factors are two of the most important levers that can be adjusted when optimizing for performance.
2. Advertisers only pay Google when a user clicks on an advertiser’s ad (or, if advertisers are using a CPA bid, per acquisition). As a result, it is in Google’s best interest to ensure advertisers receive a lot of clicks and/or conversions. But that does not mean they will all be quality clicks or quality conversions.
3. By using match types and adjusting bids depending on the match type and keyword type, as we will continue to discuss, advertisers can save their businesses thousands of dollars by adjusting bids for each ad group and keyword. However, they lose control over this ability if they use autobidding.