If you’ve ever dabbled in Google Ads, you’ve probably already heard about Smart Bidding. It’s Google’s way of using machine learning to optimize your bids for conversions or conversion value in every auction—a.k.a. “auction-time bidding.”
Sounds fancy, right? But don’t worry, it’s easier to get the hang of than it sounds.
Let’s break it down!
What Is Smart Bidding?
First things first, what exactly is Smart Bidding?
Smart Bidding in Google Ads simplifies the process of managing your bids. Instead of setting bids manually for each keyword or ad placement, Smart Bidding uses advanced machine learning to adjust your bids automatically based on your end goals.
It continuously analyzes factors like user behavior, location, and time of day to make real-time bid adjustments. As it learns from the performance data, Smart Bidding helps you get the most out of your budget while saving you time and effort in campaign management.
What Are The Types Of Smart Bidding Strategies?
There are several types of smart bidding strategies depending on your end goal, such as:
Target CPA (Cost Per Action)
Targeting your CPA works for both Search and Display ads. It adjusts the bids to increase conversions while staying within your designated cost target (CPA).
The goal of Target CPA is to increase the number of conversions, such as sales, sign-ups, or app downloads while keeping the cost of each click in check. It looks at your past conversion data and avoids clicks that are unlikely to result in a conversion, ensuring a good cost-per-click (CPC) for each bid.
For this strategy, you need to set a target cost-per-action (CPA). Although some conversions may exceed this target, the system aims to keep the average cost below your specified CPA. It's important to set up your campaign’s conversion tracking correctly for this to work well.
Target ROAS (Return on Ad Spend)
Targeting ROAS focuses on achieving the best return on your ad spend, prioritizing revenue and returns over clicks or conversions.
How does it work? Well, Google Ads predicts future conversions and their potential value using the data from your account. This includes historical performance, conversion tracking information, and any assigned values for different types of conversions. Based on this data, it then sets a maximum cost per conversion to improve your ROAS.
Like other Smart Bidding strategies, you'll need to have conversion tracking in place and assign values to your conversions. Here’s why this is important:
Conversion Tracking: This involves setting up tracking for the actions you consider valuable (like purchases, sign-ups, or downloads). Google uses this data to understand which clicks lead to these actions.
Assigning Values: You need to specify how much each type of conversion is worth to your business. For instance, a purchase might be worth $100, while a sign-up might be worth $10. These values help Google understand the relative importance of different conversions.
Optimisation: With conversion tracking and values in place, Google can calculate the most effective bids to achieve the highest return on your ad spend. It will bid higher on clicks likely to result in valuable conversions and lower on those less likely to convert or have lower value.
Increase Conversions
This bidding strategy is all about getting the highest number of conversions within your set ad budget and daily spending limit.
Similar to the "get the most clicks" strategy, it uses your budget to achieve the greatest number of conversions possible.
TAKE NOTE: While this approach can deliver excellent results, it may also deplete your budget more quickly than other strategies.
You must be wondering how. Let me elaborate:
Aggressive Spending: The strategy prioritises conversions over the cost per conversion. To get the most conversions, Google may spend your budget rapidly if it has to, especially if it identifies opportunities for high conversion potential.
Budget Allocation: Since the aim is to increase conversions, the system may allocate your budget more aggressively across various auctions. Which can lead to faster budget depletion as it focuses on securing as many conversions as it can, rather than pacing your spend.
High Conversion Opportunities: If the algorithm detects many opportunities for conversions at different times or on various placements, it might spend your budget faster to take advantage of those opportunities.
In summary, the "Increase Conversions" strategy can use up your budget quickly because it’s designed to drive the highest number of conversions possible, even if that means spending your budget faster than other, more conservative strategies.
Maximise Conversion Value
The "Maximise Conversion Value" strategy is about getting the most value out of your conversions rather than just focusing on the number of conversions.
For example, if you run an online store selling both inexpensive accessories and high-end electronics. Your goal is to get the most value out of each sale rather than just increasing the number of sales.
Using the "Maximise Conversion Value" strategy, Google Ads would analyze your past sales data to understand which types of purchases bring in the most revenue. If it finds that high-end electronics have a higher profit margin compared to accessories, the system will adjust your bids to prioritise ads that are more likely to result in sales of those high-value electronics.
For instance, if a potential customer searches for "latest smartphone" and your ad is eligible to show, Google Ads might increase the bid to make sure your ad appears at the top of their search results. This is because a sale of a high-end smartphone will generate more revenue compared to a sale of a low-cost accessory.
In contrast, if someone searches for "phone case" and the system sees this is less likely to bring in high revenue, it might set a lower bid for that search. This approach ensures that your budget is used to target high-value opportunities and maximise the overall revenue you get from your ad spend.
It does this by automatically adjusting the cost-per-click (CPC) bids for your ads whenever they’re eligible to appear. In other words, Google Ads sets the best possible bid for each ad to get you the highest value conversions.
Since this strategy aims to spend your entire daily budget to get the most value, it might use up your budget more quickly than other strategies. This can be a bit of a drawback if you’re keeping a close eye on your budget.
For this strategy to work well, you need to have conversion tracking set up properly and assign values to each conversion. This way, Google Ads knows how much each conversion is worth and can set your bids accordingly.
Overall, if your goal is to get the highest return from your conversions and you’re okay with your budget being used up faster, this strategy could be a great choice.
Tips for Making the Most of Smart Bidding
Now, let’s talk about some tips and tricks to help you get the best results with Smart Bidding:
Give It Time: Machine learning needs data to learn and improve. When you switch to Smart Bidding, give it some time to adjust and optimize. Don’t panic if you don’t see immediate results—patience is key.
Monitor Performance: Keep an eye on your campaigns, especially in the beginning. Check the performance metrics and make sure everything is on track. If something seems off, you might need to work on your settings.
Adjust Targets Gradually: If you need to change your target CPA or ROAS, do it gradually. Sudden changes can confuse the algorithm and disrupt your campaign’s performance.
Use Broad Match Keywords: Broad match keywords can help Smart Bidding find more opportunities for conversions. Since the algorithm is pretty smart, it can figure out which searches are likely to convert, even with broad-match keywords.
Combine with Other Automated Features: Smart Bidding works well with other Google Ads features like Responsive Search Ads and Dynamic Search Ads. Combining these can supercharge your campaigns.
Common Pitfalls to Avoid
While Smart Bidding can work in your favor, there are a few common pitfalls you’ll want to avoid:
Setting Unrealistic Goals: Be realistic with your targets. Setting a CPA that’s too low or a ROAS that’s too high can hinder performance.
Ignoring Data: Just because it’s automated doesn’t mean you can set it and forget it. Keep monitoring your data and make adjustments as needed.
Not Testing: Always test different strategies and settings. What works for one campaign might not work for another.
Final Words
To get the best out of Smart Bidding, set realistic targets, keep an eye on your campaign performance, and be patient while the system learns and optimises.
Experiment with different strategies and use Smart Bidding alongside other automated features for even better results.
With these tips, you’re ready to dive in and let Smart Bidding work its magic!
SO, WHERE DO YOU FIND THIS PARTNER?
Well, aren’t we glad you asked! We at DigiCom are obsessive data-driven marketers pulling from multi-disciplinary strategies to unlock scale. We buy media across all platforms and placements and provide creative solutions alongside content creation, and conversion rate optimizations. We pride ourselves on your successes and will stop at nothing to help you grow.
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