FAQ
Why we use auto bidding instead of manual bidding in our ads strategy
Structural Investment: Shopee is the master data controller and is constantly collecting user data on is using that data to optimize their algorithms to get sellers the best placements.
Best Placements = Most ROAS (Highest GMV, Least Expense)
They have already sunk the upfront investment and maintainence cost to build this shopping algorithm, and are constantly making better.
So why would they manipulate their own core dataset to give false signals to their algorithm and risk it optimizing the wrong thing. They stand to lose more if they mess this up.
Moral Hazard: When running manual bidding, there is a chance (though not confirmed) that Shopee maybe manipulating what you see on your ads dashboard. (In this case, the performance of your chosen keywords.)
In order to encourage sellers to set higher bid prices, why would they not show you disappointing results?
Afterall, when you set higher bid prices, they make more money.
This also applies to keyword traffic data that they show you. (It might be inflated.)
Time Cost: It takes forever to optimize every single keyword that you are bidding for for every single SKU and variation on a listing.
Unless you only sell a few products (Less than 10) on your store, it's just not feasible to run a manual strategy from a resource allocation standpoint.
Imagine you have 100 listings, and each listing has 5 variations, and you are running manual bidding on all 100 listings with a total of 30 keywords each listing that you want to test
That's 3,000 keywords you need to analyze every month to tweak.
✅ The bottom line is, the odds seem to be stacked against us when running manual bidding so we just go for auto bidding and use that time saved on optimizing every single keyword to build other parts of our business.
Why did Shopee introduce GMV Max and phase out search and discovery ads?
Not enough people are buying discovery ads, and they want to more people to buy it.
When everyone just buys search ads and bid against each other in auctions, ad costs will naturally rise as a result.
But since not alot of sellers are buying discovery ads, Shopee has to do something about it to not waste their ad real estate.
My guess is that in order to encourage more Shopee sellers to buy discovery ads on their platform, they just consolidated both search and discovery ads into one product (GMV Max).
Shopee most likely understands that most sellers don't care or have time to learn how to optimize their Shopee ads. As such, they just follow Shopee's system ad recommendations thinking that they are making money.
✅ Which is the whole reason why I created this course because if you don't know what target ROAS to set and let Shopee anyhow set for you, you will lose money without even knowing.
Why are search ads historically more expensive than discovery ads?
✅ Because more people bid on those ad placements than discovery ads. If there is a limited supply of "top placements", and a lot of sellers trying to secure that "top placement", then the cost to feature your listing on those "top placements" will go up correspondingly. (That's why its called an ad auction.)
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