Why Use Google Ads Smart Bidding?
Google Ads Smart Bidding has been around for quite a while. It was first introduced in 2018 and has evolved into a powerful tool to improve advertisers’ bidding performance in real time. As Google’s Machine Learning has grown and become more sophisticated, it has allowed advertisers to do what they couldn’t before, make real-time decisions in the auction.
What is Machine Learning?
According to Microsoft Azure, “Machine learning (ML) is the process of using mathematical models of data to help a computer learn without direct instruction. It’s considered a subset of artificial intelligence (AI). Machine learning uses algorithms to identify patterns within data, and those patterns are then used to create a data model that can make predictions. With increased data and experience, the results of machine learning are more accurate — much like how humans improve with more practice.
The adaptability of machine learning makes it a great choice in scenarios where the data is always changing, the nature of the request or task are always shifting, or coding a solution would be effectively impossible.”
Machine Learning in Our Everyday Life
As advertisers, we’re often skeptics when it comes to anything new. We’re wary of technologies touted as useful or “game-changing.” But, in our everyday lives, we lean on AI to make our lives easier and more efficient. For instance, we use smartphones with assistants that can perform various tasks and find the information we ask for. Smart home devices manage lighting, temperature, and even your grocery list. It covers the gamut from productivity and security to entertainment and assisting you throughout your day.
How Google Uses Machine Learning
Smart Bidding
Most people spend the majority of their waking hours “connected” in some way. Mobile devices mean that we look for and expect answers right now. According to Google, over the last 2 years, there was a more than 85% increase in mobile Searches containing “where to buy” a specific product. At the same time, same-day shipping searches have doubled, and “open now” Searches have tripled. Additionally, there’s been a 150% increase in travel Searches for “today” and “tonight.”
This sense of urgency is where Google’s Machine Learning comes in. It allows advertisers to act upon consumers’ intent in real time. It allows for efficiency and meaningful interpretation of data on the fly. No human needs to intervene and make changes, allowing it to deliver results quickly, which translates to acting on real-time consumer intent.
Recommended Optimizations
These are the optimization suggestions you find in the recommendations tab. Machine learning helps identify places where you can improve your campaigns. These suggestions include creating new campaigns, adjusting match types, and keyword/negative keyword mining at scale just to name a few.
Ad Copy
Advising on ad copy and ad variations. You can quickly and easily create new variants and write additional ad copy based on Google’s recommendations. Google can even create whole new ads on your behalf.
Creating campaigns
Google can create campaigns for you with DSAs, local campaigns, and more.
Attribution
Choosing the correct data attribution model can really help your smart bidding results by feeding the machine more accurate data points as users progress along the buying journey. For a cheat sheet on which attribution model to choose and when see here: Google Automated Bidding — Quick Reference Guide
Drilling Into Smart Bidding
According to Google Ads Help, “Smart Bidding refers to bid strategies that use machine learning to optimize for conversions or conversion value in each and every auction — a feature known as ‘auction-time bidding.’ Target CPA, Target ROAS, Maximize conversions, and Maximize conversion value are all Smart Bidding strategies.”
How Can Smart Bidding Help?
Google Ads Smart Bidding is a tool that gives advertisers an edge over the competition if they know how to use it correctly. You can benefit from automation, data analysis, and bid optimization.
Smart Bidding offers true auction-time bidding, ensuring your bid is competitive. This allows your ads to show at the right time, in the right place, and to the right people. When you adjust bids manually, you don’t have the ability to make changes like this on the fly. So, Smart Bidding gives you access to features you can’t use on your own.
You’ll also benefit from query-level adaptive learning. Smart Bidding strategies evaluate Search query level performance and intent signals of the user at auction time to optimize for every auction.
These strategies read the signals that PPC managers don’t have access to. Even if you did have access, you would never have enough time to analyze the data and make the necessary changes.
Some of the benefits you’ll experience with Smart Bidding are:
- Optimal bids for every auction
- A more efficient workflow
- Better ROAS for your budget
Overview of Smart Bidding Strategies
Maximize Conversions
Maximize Conversions emphasizes getting as many conversions as possible with your budget. Both new and existing campaigns can benefit from this strategy.
This bidding strategy is best used with campaigns that are limited by budget but don’t have a CPA or ROAS goal. It works with campaigns that have either no conversion history or few conversions. Be careful with this one — bids are roughly linked to budget, so a large increase in budget will likely correspond to a large increase in CPCs as the algorithm chases as many conversions as it can get, regardless of CPA or ROAS.
You’ll need to set up conversion tracking before enabling this strategy. No minimum number of conversions is required to implement Maximize Conversions. However, with video campaigns, you’ll need at least 35 conversions per week.
PMax, Search, Display, and video can all use this bid strategy.
Target CPA
Target CPA focuses on getting conversions for the target CPA you designate. The goal is to drive as many conversions as possible at your target CPA. You should use this strategy if you’d like to increase your conversions without going over your goal CPA. This strategy works well for campaigns where you need to reduce or control CPA.
Make sure you have conversions set up prior to using this strategy. There’s no minimum conversion requirement for Search and Display, but video campaigns will need at least 35 conversions per week.
You can utilize this Smart Bidding strategy for PMax, Search, video, and Display campaigns.
Maximize Conversion Value
The Maximize Conversion Value strategy is a value-based strategy. If your budget is limited, this strategy can help. Use this strategy when you have a fixed budget but don’t have a CPA or ROAS goal. This strategy will take a campaign with low or no conversions and begin improving the conversion value rather than the number of conversions. It’s similar to Maximize Conversions in that large budget increases will see large CPC increases, so use with caution.
Before implementing this strategy, you’ll need to set up both conversion tracking and conversion value. You can use it on PMax, Search, or Smart Shopping campaigns and don’t need conversions to use it.
Target ROAS
Last but not least is Target ROAS. If you have a goal return on ad spend and want to maximize your conversion value, this is your bidding strategy. It will aim to maximize the revenue generated at your desired ROAS.
Set up conversion tracking and ensure conversion value is being tracked to use this bidding strategy. You’ll need at least 15 conversions with the conversion value passed through to get started. Target ROAS works on PMax, Search, Display, and Shopping campaigns.
Choosing the Right Smart Bidding Strategy
Choosing the right Smart Bidding strategy starts by ensuring you have conversion tracking set up and it’s working correctly. Then, look at your goals. Are you generating leads or sales?
Maximize Conversion Value and Target ROAS only work for e-commerce accounts or accounts where conversions are assigned a value.
For lead gen accounts, no conversions are required. Instead, choose your bid strategy based on whether or not you have a target CPA. If you don’t, you should start with Maximize Conversions. But, if you need to hit a goat CPA, then you’ll need to use Target CPA instead.
Break down your goals, and it will allow you to choose the best Smart Bidding Strategy.
Check out the flowchart below to work our what works best for you.
Also, we recently wrote an article outlining all the bid strategies and how best to use them: The Good, The Bad, and the Useful — Google Ads Bid Strategies
Wrap Up
Sometimes Google’s automations make us feel like they’re trying to replace us. That’s not the case, though. Instead, they’re trying to give advertisers the tools to help clients achieve their goals. Success relies on research, data analysis, and structure but also involves using the tools at your disposal. Try Google Ads Smart Bidding and see how it helps you!
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