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Online marketing is one of the fastest growing industries in the market. What was profitable for clients yesterday is now forgotten as outdated and ineffective. Just take a look at Google tools, which are constantly undergoing major changes and new options are introduced. We at Verseo also continue to create modern tools that automate work and improve those that have been in our offer for some time. Let’s take a closer look at our Verseo Campaign Manager platform for automating and optimizing Google Ads campaigns, we started with a few rate optimization strategies, and today we have over 50 of them! What options can clients choose from?
What Is VCM?
First, a quick note for those who haven’t come across this system before. VCM is our tool that helps you improve the results of your Google Ads campaigns. It’s based on statistical models and self-learning algorithms that collect data about campaigns 24 hours a day and automatically optimize them to maximize the likelihood of achieving previously set goals.
When designing VCM, we were particularly focused on making the platform simple and intuitive, allowing people with no specialized knowledge of online advertising to run effective campaigns using the latest and most effective technologies. You can read about what effects can be achieved with this tool in our case study including 22 accounts from different industries and budget ceilings.
What Are Rate-setting Strategies?
It sounds like tech jargon and may seem complicated, but choosing a rate optimization strategy is not a plan for the Battle of Waterloo. Strategies simply serve a chosen business goal that you want to achieve with your campaign. In turn, these goals can vary. For example, at each stage of the marketing effort we may want as many people as possible to see our ad, as many users as possible to convert, or simply to reduce advertising costs as much as possible. To achieve each of these objectives a different strategy is used. It depends on the choice of strategy on which parameters of the campaign the system will focus most strongly in the optimisation process.
We won’t describe all the available options, but we’ll focus on explaining what can be achieved with the most popular ones.
Maximize Conversions Based on Budget
With this strategy, the system uses the available budget in such a way that it spends evenly and as efficiently as possible. This means that if there are few funds left, they are allocated first to those keyword phrases that bring the most conversions. That’s why this strategy is a good option for people who can’t afford to spend a lot on advertising – it minimizes the likelihood of a budget constraint.
If we choose the revenue maximization strategy, the algorithms will focus not on single key phrases or advertised products, but on whole campaigns. When we run many of them, they analyze the effectiveness of each of them (provided, of course, that we have set the strategy for all of them), and then allocate the budget so that the total revenue from all of them is as high as possible. This strategy works best when the system has a lot of data, so it’s designed for people who have a large budget for advertising and can afford to run a large number of campaigns.
The target ROAS strategy is where the system strives to achieve the ROAS we set. Let’s show it with an example – for example, we can assume that we want every PLN spent on advertising to bring us 3 PLN of profit. In this model algorithms use data to identify key phrases or products that in the past gave a large number of valuable conversions. It is for them that they set higher rates per click, while the remaining phrases/products have lower rates. The risk with this strategy is setting an unrealistically high ROAS, as this can lead to budget constraints, so it’s worth entrusting the determination of ROAS to a specialist – he will set the achievable return and gradually increase it if the campaign brings satisfactory results.
In the target CPA we determine the rate we are willing to spend on acquiring one user. It does not mean, however, that each conversion will cost exactly the same. The system will analyze the behavior of users and on this basis reduce or increase the rates on specific devices, at specific times, etc. However, it will always strive for the average cost of acquisition to be at least as much as we set. In this way, it will ensure that we get the highest number of conversions at a given acquisition cost. This strategy works especially well when a specific customer acquisition cost is important to us and when the algorithm has a lot of data from which it can predict user behavior.
Maximizing Clicks Based on Budget
As you can easily guess, the goal of this strategy is to get as many clicks as possible on a given budget. It is similar to maximizing conversions based on budget and is an alternative when we don’t have conversion tracking implemented. It also works well when we have a very small budget, and thus few conversions – then there may be too little data for the system to correctly predict which phrases/products will bring the most of them. In addition, it’s not always possible to determine the action that causes a conversion, and we often care about getting the most traffic to the website – maximizing clicks will be a perfect solution in such cases.
Target Share in Views
This strategy allows achieving a target percentage share of views – the algorithms automatically set the rates at such a level to win a certain number of auctions. When choosing this option, we have to decide which ad display space we want to fight for. There are three options:
- the first result on the page,
- display at the top of the results page
- or display anywhere on the page.
This may be limited by a maximum rate that the system can set, but for the campaign to work properly, it cannot be too low. Then it would be impossible to win enough auctions.
Determine the rate per click for the ads yourself, but the system can automatically increase it if it considers that the conditions have occurred in which the probability of conversion has increased, or decrease it when the chance of conversion is negligible. With enhanced CPC – or eCPC – you can optimize rates, aiming to increase either the number of conversions or the value of conversions.
A Custom Solution
VCM users can take advantage of many other strategies available within the platform. After signing the contract, the client is contacted by a support specialist created specifically for VCM users. He suggests the best strategy and ad formats for a given industry and budget, choosing from the options available in the package selected by the client.
After accepting the plan, he sets the campaign and optimizes it manually for a month, while the algorithms collect data to adjust the rates in the future, realizing the assumed strategy. After the first month, the company no longer interferes with the campaign, but the client can make updates or add new keywords, ads etc. They can also view ad statistics on an ongoing basis and compare results from different periods, so the platform gives the client a lot of freedom while providing advanced algorithms, and all in all it’s a tool that allows you to create modern, optimised campaigns with any budget.