What is Smart Bidding?

What is Smart Bidding?

Smart Bidding
Smart Bidding is a sub-set of automated bid strategies using machine learning and contextual signals to optimise bids, conversions and conversion value in every auction.

Smart Bidding strategies can save you a lot of time, however, they rely on algorithms and data to recommend accordingly, and therefore results may differ from your initial goals.

These Smart Bidding strategies are now available:
– Maximise conversions with a Target CPA – Cost per acquisition
(Optional)
– Maximize Conversion Value with a Target return on ad spend (Optional)
– Enhanced CPC (Cost per click) with the extension Optimise for conversion or Optimise for conversion value
– Maximise clicks
– Target impression share
– Portfolio strategy


Starting later in April 2021, some advertisers will no longer be able to create tROAS or tCPA bid strategies. Instead, they will see a new field to add a target CPA when using the ‘Maximize Conversions’ strategy and a new field for target ROAS when using the ‘Maximize Conversion Value’ strategy.

This table shows the new settings (post-April 2021) that will be equivalent to the ones you may be using today (pre-April 2021):

After the change later this year, this means that advertisers using Maximize Conversions with a tCPA setting and who have a constrained budget should either raise the budget or remove the CPA setting.

After the change later this year, this means that advertisers using Maximize Conversions with a tCPA setting and who have a constrained budget should either raise the budget or remove the CPA setting.

Each Smart Bidding strategy supports different marketing and business goals, there’s no one size fits all bidding strategy, and each strategy has its own pros and cons.

Business goals
To increase sales or leads use:
– Maximise conversions with a Target CPA –  Cost per acquisition (Optional)
– Maximize Conversion Value with a Target return on ad spend (Optional)
– Enhanced CPC (Cost per click) with the extension Optimise for conversion or Optimise for conversion value

To increase website visits use Maximise clicks.

To increase branding and awareness use Target impression share.

Portfolio strategy
Standard strategies are applied to a single campaign, while Portfolio strategies are applied to several campaigns that share the same goals.

All campaigns share the same portfolio strategy and the same goals.
This strategy helps campaigns that are under performing or do not have the minimum required conversions to use Smart Bidding.
Apply this strategy to campaigns that have the same conversion targets.

Compatibility Matrix

Source: OPTMYZR – https://www.optmyzr.com

Campaigns that do not meet the requirements

Campaign with no conversions
For campaigns with no conversions at all, it is better to test Maximise conversions with a Target CPA –  Cost per acquisition.

In these campaigns, in order to drive more conversions, add new and more keywords and text different match types to extend your reach and demand.

Campaign with only a few conversions
If you have several campaigns with less than 30 conversions per month, consider merging these into one campaign, and apply the Maximise conversions with a Target CPA –  Cost per acquisition strategy to that campaign (no need to choose a portfolio bidding strategy).

Alternatively, set up a portfolio strategy with your Target CPA and apply it to a number of campaigns that together have around 30 conversions per month.

Campaigns limited by budget
For campaigns with more than 30 conversions per month but limited by budget, it is better to test the Maximise conversions bidding strategy with no Target CPA.

Alternately, to get the extra budget for testing, relocated shared budgets from other campaigns, or pause campaigns that do not perform.

Should I move my campaigns to Smart Bidding?
The Smart Bidding algorithms look at different signals to optimise your bids, such as Device, Physical location, Location intent, Day of week and time of day, Remarketing list and many others.

Google Ads evaluates how signals interact with each other.

Source: Google.

Smart Bidding is designed to maximise performance and to save time, while Manual bidding can be very difficult to handle, and time-consuming considering all the endless bid adjustment combinations.

This is especially true if you have large number of keywords in your campaigns, make frequent bid changes, or you need constant optimisation for match type, device, location and other metrics.

The machine learning period is typically 1-2 weeks, however, a large amount of conversion data helps to get faster results.

Smart Bidding only uses the information from Google Ads, and relies on conversion data to recommend accordingly, but it does not always take into consideration factors that may be very important to you such as client lifetime value (CLV), telephone calls, seasonality, errors in data, your website changes and revenues.

Each Smart Bidding strategy supports different marketing goals, there’s no one size fits all bidding strategy, and each strategy has its own pros and cons.

Smart Bidding may or may not be the best solution for you, always test it extensively and optimise campaigns based on your results.

Not ready for Smart Bidding?
DSA (Dynamic Search Ads) and RSA (Responsive search ads) are not Smart Bidding strategies, however, these are good options to start testing your campaigns with Google’s Machine Learning.

Note: DSA are ideal for e-commerce websites and well developed websites with good foundations and architecture.


Extract from my Book ‘Making Google Ads Work’.

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