Smart Bidding Google Ads: Everything You Need To Know

May 15, 2019
Posted in Paid Search
May 15, 2019 Jen Lopez

Smart Bidding Google Ads: Everything You Need To Know

In our last blog post on Google Ads, we made the case for Smart Bidding using Google’s machine learning. In that installment, you learned how Smart Bidding works along with some of the many signals Google Ads considers for their machine learning to improve campaign performance. Though the technology can analyze more than 70 million unique signals at a time, our input (or our bid strategy selection) is what tells Google how to analyze those signals in order to get our desired performance.

With that, this blog post is about some of our favorite bid strategies available in Google Ads. If you think about Google’s machine learning as a pair of eyeglasses, and the signals being what you see through the glasses, then the bid strategies are the lenses of the eyeglasses that impact how you are able to see those signals. Make sense?

To decide on the best bid strategy, you must be uber clear on your goal. Do you want more web traffic, to generate more conversions or sales, or target a specific return? To be sure, there are other goals you might have like visibility or outranking competitors, but since those are atypical requests and not performance-based, we will save those for another post.

Bid Strategy: Maximize Clicks

Goal: Drive Web Traffic

Previously referred to as “Automatic Bidding,” Maximize Clicks is an automated bid strategy, where you set a daily budget and Google adjusts your bids to help you get as many clicks as possible within your budget. For further control of this strategy you can set an upper or maximum bid limit, but doing so might impact your ad’s position or the amount of clicks you’re able to generate. If you are using this strategy, it is important to note that it will ignore any bid adjustments in place based on day and time.

Bid Strategy: Maximize Conversions

Goal: Drive Sales/Lead Volume

Maximize Conversions allows Google to automatically bid up or down in real-time to help you get the most conversions within your daily budget. This bid strategy relies on historical information about your campaign and analyzes that data to consider which signals were present for converters/purchasers. Using that data, Google will automatically select the optimal bid at the time of auction based on the signals received from the searcher.

Before you use this bid strategy, you’ll want to ensure that the campaign is not part of a shared budget, and that it has enough historical data to be run properly. We recommend 3 months of data with 15 or more conversions for any given campaign.

Also, note that Maximize Conversions works to spend your budget in full – so, if you have a high daily budget that is hardly met, expect that to change and adjust accordingly.

Bid Strategy: Target CPA

Goal: Get As Many Conversions as Possible at a Specific Cost-Per-Action

Using many of the same signals as Maximize Conversions, a Target CPA bid strategy tries to maximize conversions while also keeping within or at your CPA goal. With a strategy like this, Google adjusts bids in real-time, however if you are watching closely, you’ll see that many conversions will cost more or cost less than your target CPA. The goal is that over time, these will average out to your targeted cost-per-action.

With this bid strategy (and with the Maximize Conversions bid strategy) it’s important that you consider every conversion included in your Conversions columns, as all of those will be used to inform the volume of conversions and CPA within these strategies. If you have less-valuable conversions, like an email signup, that you do not want included in your bid strategy, make sure to remove this from the conversions column (or, give it a value that properly works into your target CPA). 

Also note that while it is recommended to remove most manual bid adjustments, they do still work. So, for devices, if you have a 10% bid increase on mobile, it will increase your set target CPA by 10% on that device.

Bid Strategy: Target ROAS

Goal: Get As Many Conversions as Possible at a Specific Return-on-Ad-Spend

This bid strategy lets you bid based on your target ROAS, and with Google’s smart bidding technology, it works to help you get more conversion value or revenue at your target ROAS. Again, with this strategy, your bids are automatically optimized in real-time, when the auction occurs. This strategy can be used for individual campaigns, or across an entire account, as long as you have ample historical data.

For this strategy, Google recommends that in Search or Display campaigns, you have a minimum of 15 conversions in the past 30 days and for Shopping campaigns that you have at least 20 conversions in the past 45 days. Of course, the more data and more conversions you have – the better, so don’t turn use this bid strategy too early on in a campaign’s life-cycle.

An important note about this strategy is that none of your bid adjustments will stay intact. The only accepted adjustment is if you’ve chosen to negate mobile 100%. With this strategy, you can set a maximum and a minimum manual CPC bid limit, however, it is not recommended as it can impact the algorithm’s ability to learn.

To Sum Up:

As with all bid strategies – use them responsibly!

Don’t try to test out strategies when you don’t have enough data. And be willing to test bid strategies for a few weeks without worrying too much about results. It takes the algorithms time to learn and time to work, and often we see advertisers get nervous and pull out too early. That being said, not all bid strategies will hit the goal or provide the results you are looking for, so don’t think they are a magic cure-all.

Even with bid strategies in play, there are MANY other factors that impact the success of your account so much more than your bidding. If you aren’t hitting goals, before you consider switching to a bid strategy, first consider if your account is structurally sound, if the keyword portfolio is awesome, the ads are appealing, and how the on-site conversion rate looks. More times than not, these things matter more.

If you have questions about bid strategies, or any of the above, get in touch with our team today!