Overview of Google Ads Smart Bidding Strategies

Google Ads offers a range of Smart Bidding strategies that use machine learning to optimize your bids in real-time, helping you achieve your advertising goals. These strategies automatically adjust bids based on various factors, such as user context, device, location, and time of day, to maximize performance. Source

Step 1: Understand the Types of Smart Bidding Strategies

1. Target CPA (Cost Per Action): This strategy aims to generate as many conversions as possible at a defined cost-per-action. It's suitable for businesses with a fixed conversion cost goal. For example, if your target CPA is $10, Google Ads will automatically adjust bids to try to get you as many conversions as possible at an average cost of $10 per conversion.
2. Target ROAS (Return on Ad Spend): This strategy focuses on achieving a specific return on ad spend. It's ideal for revenue-focused businesses. If your target ROAS is 500%, Google Ads will automatically set bids to try to get you as much conversion value as possible while maintaining an average return of 5 times your ad spend.
3. Maximize Conversions: This strategy seeks to get the highest number of conversions within your specified budget. It's perfect for maximizing conversion actions. Google Ads will automatically set bids to help you get the most conversions possible while spending your budget.
4. Maximize Conversion Value: This strategy targets the highest possible conversion value within your specified budget. It's ideal for businesses that value different types of conversions differently. Google Ads will automatically set bids to help you get the most conversion value possible while spending your budget.

Step 2: Determine Your Business Goals

Consider your business objectives and choose the Smart Bidding strategy that aligns best with your goals:

• If you have a specific cost-per-acquisition target, use Target CPA.
• If you want to maximize revenue while maintaining a specific return on ad spend, use Target ROAS.
• If your goal is to get as many conversions as possible within your budget, use Maximize Conversions.
• If you want to maximize the total value of conversions within your budget, use Maximize Conversion Value.

Step 3: Set Up Conversion Tracking

To use Smart Bidding, you must have conversion tracking set up in your Google Ads account. This allows Google Ads to measure the actions you define as valuable, such as website purchases, form submissions, or phone calls.

1. Go to the Conversions section in your Google Ads account.
2. Click on the "+" button to create a new conversion action.
3. Follow the prompts to set up conversion tracking for your website or app.

Step 4: Gather Sufficient Conversion Data

For Smart Bidding to work effectively, Google Ads needs historical conversion data to train its machine learning models. Aim to have at least 30 conversions in the past 30 days for the campaign you want to use Smart Bidding on. This data helps the algorithms make accurate predictions and optimize your bids.

Step 5: Enable Smart Bidding

1. Navigate to the campaign or ad group where you want to use Smart Bidding.
2. Click on the Settings tab.
3. Scroll down to the "Bidding" section.
4. Click on "Change bid strategy".
5. Select your desired Smart Bidding strategy from the dropdown menu.
6. Enter your target CPA, target ROAS, or budget, depending on the strategy you chose.
7. Click "Save" to apply the new bid strategy.

Step 6: Monitor and Adjust

After enabling Smart Bidding, monitor your campaign's performance closely. Allow the machine learning algorithms some time (usually 1-2 weeks) to adapt and optimize based on your goals. If needed, make adjustments to your targets, budgets, or conversion tracking to fine-tune performance.

For example, let's say you run an e-commerce store and have set a Target ROAS of 400% for your campaign. After two weeks, you notice that your actual ROAS is consistently around 350%. You could consider lowering your target ROAS to 350% to align with the actual performance and ensure Google Ads continues to optimize effectively.

By understanding the different Smart Bidding strategies, aligning them with your business goals, and providing sufficient conversion data, you can leverage Google Ads' machine learning capabilities to automate your bidding and achieve better results.

How Smart Bidding Works and Its Implementation

1. Mechanics of Smart Bidding

Smart Bidding is a set of automated bid strategies that use machine learning to optimize for conversions or conversion value in each and every auction. It factors in a wide range of auction-time signals, including:

• Device and location
• Remarketing lists
• Ad characteristics
• Interface language
• Operating system
• Time of day and day of week

By analyzing these signals, Smart Bidding can predict the likelihood and value of a conversion for each auction. It then automatically adjusts bids to maximize conversions or conversion value within your budget.

For example, if a user is on a mobile device, has previously visited your site, and is searching during a time when conversions are typically high, Smart Bidding may increase the bid to capture this high-value auction.

2. Steps to Implement Smart Bidding in Campaigns

1. Set up accurate conversion tracking
   • Ensure Google Ads conversion tracking is properly implemented on your website.
   • Assign values to conversions based on their importance to your business goals.
2. Select the appropriate bidding strategy
   • Choose a strategy that aligns with your primary campaign objective:
     • Target CPA: Aims to get the most conversions at or below your set cost-per-acquisition.
     • Target ROAS: Focuses on achieving a target return on ad spend.
     • Maximize Conversions: Spends your budget to gain the most conversions.
     • Maximize Conversion Value: Optimizes for the highest possible conversion value within your budget.
3. Establish realistic targets and allow learning time
   • Set achievable CPA or ROAS targets based on historical data.
   • Allow the algorithm time to learn and optimize. Google recommends at least 30 conversions per month for Target CPA and 50 for Target ROAS.
4. Monitor and adjust for optimization
   • Regularly review campaign performance and make adjustments as needed.
   • If not meeting goals, consider adjusting targets, budgets, or ad creatives.
   • Utilize portfolio bid strategies to optimize across multiple campaigns.

For instance, if you set a Target CPA of $50 and have a daily budget of $100, the Smart Bidding system will aim to get you 2 conversions per day at an average cost of $50 each.

3. Continuous Management and Learning

Implementing Smart Bidding is not a set-it-and-forget-it approach. Continuous monitoring, adjustment, and education are key to long-term success.

Stay informed on best practices and product updates through resources like the Google Ads Help Center and the Google Ads Blog. As the platforms and capabilities evolve, active management will help you get the most out of Smart Bidding.