Smart Bidding

Smart bidding is a form of automated bidding that uses machine learning algorithms to automatically set bids for your Google Ads campaigns. The aim of smart bidding strategies is to help you get more conversions (sales, leads, etc.) at the target return on investment (ROI) you set. 

How Smart Bidding Works

Smart bidding works by using data signals and machine learning algorithms to automatically place bids that are designed to get you more conversions at your desired ROI. The algorithms take into account a variety of factors, including but not limited to: 

• Your campaign’s historical performance 
• The device that searchers are using 
• The time of day that searchers are searching 
• The searcher’s location 
• Search queries 
• Ad relevance 
• Your competition 

Benefits of Smart Bidding

There are a number of benefits that come with using automated bidding: 

• Improved conversion rates: because the algorithms are constantly learning and adjust bids based on a variety of factors, they can often get you more conversions than if you were manually setting bids. 
• More time for other tasks: using automated bidding strategies frees up your time so you can focus on other tasks related to your business.
• Reduced human error: because smart bidding is automated, there is less room for human error. 

Drawbacks of Smart Bidding

There are a few potential drawbacks to using automated bidding: 

• Less control: because the algorithms are making the bidding decisions, you have less control over your campaigns than if you were manually setting bids.
• Higher costs: if the algorithms are not effective, you may end up spending more money than if you were manually setting bids.
• Poor quality conversions: sometimes smart bidding algorithms can chase cheaper lower-quality conversions that are less likely to translate into revenue. 
• Requires historical data: in order for smart bidding to be effective, you need to have enough historical data for the algorithms to learn from. If you don’t have enough data, you’ll need to build some up before you switch on smart bidding. 

Smart Bidding Strategies in Google Ads

There are a number of different smart bidding strategies you can use, depending on your goals. The most common are: 

• Target CPA (cost per acquisition): with this strategy, you set a target CPA and the algorithms will automatically adjust bids to try to get you conversions at or below that CPA. 
• Target ROAS (return on ad spend): with this strategy, you set a target ROAS and the algorithms will automatically adjust bids to try to get you conversions at or above that ROAS. 
• Maximise Conversions: with this strategy, the algorithms will automatically set bids to try to get you as many conversions as possible with your available budget.  
• Enhanced CPC (cost per click): with this strategy, the algorithms will automatically adjust bids based on factors that are known to affect conversion rates. This can help you get more conversions at a lower cost per conversion. 
• Flexible bid strategies: these are a combination of the above strategies and give you more control over your bids. With flexible bid strategies, you can set a target CPA, ROAS, or maximise conversions and manually adjust bids. 

How to Choose the Right Google Ads Smart Bidding Strategy

The right strategy for you will depend on your goals. If you’re looking to get as many conversions as possible, then maximising conversions would be the best strategy for you. If you’re looking to get conversions at a specific CPA or ROAS, then one of the target strategies would be best. For eComm Target ROAS is generally the way to go, but for B2B lead gen it’s Target CPA

If you want greater levels of control over your bids, then a flexible bid strategy would be the best choice. Lastly, if you’re not sure which smart bidding strategy is right for you, then you can always test out different strategies to see which one works best for your campaign.

When to Use Smart Bidding in Google Ads

Smart bidding can be a great way to improve your conversion rates and ROI. However, it’s important to keep in mind it’s not right for every situation. You should only use it if: 

• You have enough historical data.
• You’re comfortable with less control.
• You’re okay with potentially higher costs.

If you’re not sure whether smart bidding is right for you, then it’s always best to speak to a qualified PPC professional. They can help you decide if it’s the right choice for your campaign.

How to Set Up Smart Bidding in Google Ads

1. Choose the smart bidding strategy and set a bid amount. You can find both of these options under the “Bidding” section of your campaign settings. The strategy you choose will depend on your goals, so make sure to choose the one that best fits your needs:

• Target CPA bidding
• Target ROAS bidding
• Maximise Conversions bidding
• Maximise Conversion Value bidding
• Enhanced cost per click (ECPC)

2. Set up conversion tracking. This is how the algorithms will know whether your ads are resulting in conversions. You can find instructions on how to set up conversion tracking here. 
3. Enable smart bidding. You can do this by selecting the “Enable smart bidding” option under the “Bidding” section of your campaign settings. 
4. Set a budget. This is the amount you’re willing to spend on your campaign each day. You can find the budget option under the “Budget” section of your campaign settings. 
5. Start your campaign. Once you’ve set up your campaign, you can start it by selecting the “Start” option under the “Campaign settings” tab. 
6. Monitor your campaign. Once you’ve set up your smart bidding campaign, it’s important to monitor it closely. This means keeping an eye on your conversion rates, CPCs, and ROAS. If you see any sudden changes, then you may need to adjust your bids or budget. 

Frequently Asked Questions

How does Google decide what bids to make? 

Google decides what bids to make by taking into account a variety of factors, such as: ad relevance, landing page experience, and historical data. 

How often do Google’s algorithms update? 

Google’s algorithms update bids every time there’s a new auction. This means they could update several times throughout the day. 

What if I don’t have enough data for smart bidding? 

If you don’t have enough data, then you can always try manual bidding. This is where you set your own bids for each auction. Once you’ve built up enough historical conversion data through manual bidding then you can consider switching to smart bidding. 

What is the difference between manual bidding and smart bidding? 

The difference between manual bidding and smart bidding is that with manual bidding, you set the bids yourself. With smart bidding, the algorithms set the bids for you. Manual bidding give you much more control over how much you spend each day, but it is very time consuming to manage. 

How much data do I need for smart bidding to work?

Google recommends having at least 15 conversions in the last 30 days. However, more data is better. We’d recommend having at least twice that number conversions to get better results from the get go.