Over the past few weeks, I’ve come across more than one comment or statement about how powerful the AdWords Automated Rules are for bidding and how this could really put pressure on the third-party software companies, be the death of bid management  software, etc.
I don’t agree.
Over at Ad Innovations , Google gives us the example of using Automated Rules for raising your bid (by 20%) based on a keyword’s position (worse than 4). They also say, “Modify your Max CPC bids based on CTR or conversion rates ,” but offer no real direction for how to do this.
Brad Libby talked about shooting your eye out with automated rules, which doesn’t sound too profitable.
What I haven’t come across is any examples of how to bid intelligently with this new feature. Where are the rules for the Automated Rules?
Google does, however, give a long list of why using Automated rules for bidding is complicated , and seems to discourage its use for bidding. They list nine areas of concern that we as advertisers need to know about, and suggest that we consider using automatic bidding  or conversion optimizer . I don’t remember hearing about these nine complications in the video. Of course, this warning is buried in AdWords help  and not on the front page of the AdWords blog or AdWords Innovation.
One could argue that if Google thinks it’s better to use Conversion Optimizer for bidding, then they would also consider using other methods designed specifically for bidding as more appropriate. This could be in the form of third-party software or through the use of agencies with advanced bidding technology.
But still, advertisers hear “automated” and automatically think bids. Some suggest that this trend to obsess on bids  is symptomatic of a fundamental lack of understanding of the technology that supports PPC management .
Changing a bid up or down is easy. Being able to value the traffic generated by your PPC ads is much harder. Here’s what George Miche over at the RKG blog has to say about PPC bidding :
“The goal is to determine what the value of the traffic driven by each different ad is likely to be and then set the bid to the fraction of that value you’re willing to spend on marketing.”
Automated Rules does nothing to help you understand the value of your clicks, but does make it very easy to damage your account. Don’t just blindly jump into setting bid rules because you can.
So, what is Automated Rules good for? I haven’t really figured this one out yet. Black Hat PPC is excited about using Automated Rules for affiliates .
Google’s Ad Innovations  tells us that we can use Automated Rules to enable promotional ads or to raise our budgets for peak shopping days, and offers this bit of direction:
“Automated rules are designed to save you time and help you manage your AdWords account more efficiently. If you regularly log in to make manual changes to your account, we encourage you to give automated rules a try.”
Whatever that means; maybe Google should have said something more like this: “If you don’t have a complete and thorough understanding of the rules you are writing then don’t implement them. It will be much easier to write rules that do harm than to write rules that help, so be careful.”
I look forward to learning how other advertisers are using Automated Rules, and over the next few weeks I am going to attempt to use this new feature and report on my experiences here on the WordStream blog.
It’s clear that Automated Rules is not intended to be a bid management solution. If not for bids, then how can we as advertisers use it properly? I would love for readers to leave their suggestions in the comments below; if they make sense I will test them and let you know how it goes.
I’m also going to ask my Google reps to write me some Automated Rules to see what they come up with—should be interesting.
This is a guest post by Chad Summerhill, author of the blog PPC Prospector, provider of free PPC tools  and PPC tutorials , and in-house AdWords Specialist  at Moving Solutions, Inc. (UPack.com  and MoveBuilder.com ).
Photo credit: Conor Ogle