In today's digital advertising landscape, effective management of your bidding strategies is crucial for maximizing campaign success. By harnessing the potential of Google’s smart bidding strategies, advertisers can improve their ad performance, save time, and achieve better ROI. This article will delve into the key aspects of Smart Bidding and provide actionable tips for automating and optimizing your bids on Google Ads.
Understanding Smart Bidding
Smart Bidding is a suite of automated bidding strategies powered by Google's machine learning algorithms. It leverages a variety of signals, including device, location, time, audience, intent and conversion data, to optimise bids in real time. By analysing vast amounts of data and making auction bid adjustments in real time. Smart Bidding helps advertisers achieve their campaign objectives and serve the right ad to the right user at the right time. We’ll look at some of those objectives in the next sections.
Smart Bidding vs. Automated Bidding
While the term “smart bidding” is used to categorise all non-manual bidding strategies, it is important to note that there are two types of bidding strategies available within the Google suite: smart bidding and automated bidding.
The two share some similarities, however, the main difference is that smart bidding strategies optimise towards revenue and ROAS while automated strategies optimise towards search metrics such as clicks and impression share.
Choosing the Right Smart Bidding Strategy
Choosing the right bidding strategy depends on what goal you are trying to achieve with each campaign. Here is a flow chart of how to choose what bidding strategy to use depending on your business goals:
- Target CPA (Cost-Per-Acquisition): This strategy sets bids to achieve a specific cost per conversion. It works best when you have historical conversion data and a desired CPA target in mind.
- Target ROAS (Return on Ad Spend): With this strategy, bids are adjusted to maximize the conversion value based on a specific ROAS goal. It suits campaigns where the value of each conversion varies, and ROI is a priority.
- Maximize Conversions: This is ideal for advertisers who want to generate the highest number of conversions within their budget. This strategy automatically sets bids to maximize the conversion volume.
- Maximise Conversion Value: This strategy is ideal if you are trying to hit a ROAS target within a set budget.
- Maximise Clicks: This strategy sets your bids to help get as many clicks as possible within your budget. You can add a max CPC limit to control spend.
- Target Impression Share: This strategy sets bids with the goal of showing your ad on the absolute top of the page, on the top of the page or anywhere on the page of Google search results. You can set an impression share target which will help Google optimise towards the position you want to maintain on the search results page.
Once you’ve chosen your strategy, all you need to do is set up Smart Bidding on your campaigns Sounds easy? It can be…
Setting Up Smart Bidding
To start using Smart Bidding, you first need to ensure that your conversion tracking is properly set up. For automated bidding, however, conversion tracking isn’t entirely necessary as the algorithm will optimise towards search metrics such as clicks or impression share and not towards orders and revenue.
You will also need to check your data. Smart Bidding requires a sufficient volume of historical conversion data to make accurate bid adjustments. It’s recommended that your account has at least 30 conversions in the pastlast 30 days to maximize effectiveness. While it is possible to start using smart bidding on new campaigns, in our experience it is better to use Maximise Conversions (without a CPA target) or Maximise Clicks (without a max CPC limit) on newly launched campaigns or accounts until enough learnings are gathered to switch on to a different bidding strategy or introduce ROAS/CPA targets. This allows Google to learn what performance looks like at different levels of spend and risk so that when a target is introduced it will be better prepared to achieve it.
Not all campaigns should be optimised using the same bidding strategy, so make sure you consider what goal you are trying to achieve with each campaign. For example, you might want to consider using Target Impression Share on your pure brand campaigns to increase or maintain visibility. On the other hand, your brand generics campaigns might perform better when optimised using tROAS or Maximise Conversion Value (if you have strict marketing budgets in place).
Well-organized ad campaigns with clear goals, relevant keywords, and structured ad groups contribute to the success of Smart Bidding. So, make sure that your account structure is optimized for better performance. To do this, you could consider the following optimisation techniques:
- Segmentation: Divide campaigns into smaller ad groups to target specific keywords or audience segments. This allows for more precise bidding and better control over performance. Avoid over segmentation as this can make the accounts difficult to navigate.
- Hagakure: Consider restructuring your account using the Hagakure method in order to achieve the best results through smart bidding. In a nutshell, here is what that would look like:
- Ad Schedule Adjustments: Analyze performance data to identify specific times of the day or week when your ads perform better. Adjust bidding by modifying ad schedules to allocate budget more efficiently during high-converting periods. While this can be a helpful tool for B2B business models where potential customers only shop during business hours, for example, it is recommended to allow your ads to run unrestricted. In time, smart bidding will learn when your audience is more likely to convert and will serve more ads during that period.
- Seasonality Adjustments: Account for seasonal variations or fluctuations in conversion rates by adjusting bidding strategies during peak or off-peak periods; however, avoid over adjusting your targets, as smart bidding strategies can account for peak periods using historical data from your account.
Why is Smart Bidding better than non-automated bidding?
Smart Bidding offers several advantages over traditional bidding methods and alternative bidding strategies. For example, Smart Bidding uses machine learning algorithms to analyse vast amounts of data and make real-time bidding decisions. This automation saves time and takes away the need for manual bid adjustments, allowing you to focus on the strategic aspects of campaigns. Your campaigns are also going to be optimised on an ongoing basis, as Smart Bidding adjusts bids in real time based on several signals, including user behaviour, device, location, and time of day.
For those who worry about losing control, there is a level of built-in control. While Smart Bidding automates bidding decisions, you can set constraints and parameters. Bids can be adjusted based on specific business requirements, allowing for customisation and flexibility within the automated framework. Working with smart bidding is like owning a self-driving car: the car is perfectly capable of driving itself, however it needs the driver to tell it where to go. While there are some elements that are outside of our control when it comes to smart bidding, the most important ones are still within our control. We are in control of where we want our campaigns to go and Google decides how to achieve that goal in the most efficient way.
Smart Bidding also considers a wide range of factors and signals to make bid adjustments, leading to more precise bidding. It considers historical data, conversion patterns, and user intent, resulting in bids that are better aligned with the likelihood of conversion. The strategies are goal-oriented, which allows you to optimise towards specific outcomes such as maximizing conversions, achieving target CPA or ROAS. This performance-driven approach helps advertisers align their bidding strategies with their overall campaign objectives.
Finally, Smart Bidding continually learns and improves based on campaign data and performance. The algorithms adapt and refine bidding strategies over time, leading to enhanced efficiency and better results.
What are the disadvantages of Smart Bidding?
It all sounds too good to be true. So, while Smart Building offers lots of benefits, there are some potential disadvantages and limitations to consider including:
Dependence on Sufficient Data
Smart Bidding relies on historical conversion data to make accurate bidding decisions. If your campaign lacks sufficient data, such as a low volume of conversions, it may not perform as well as it could. Volume of data is crucial for the algorithms to learn and optimise bids effectively.
Smart Bidding operates using complex machine learning algorithms, which may make it challenging to understand how bids are determined and the specific factors driving those decisions. This lack of transparency can sometimes make it difficult for advertisers to troubleshoot or diagnose issues within their campaigns.
Certain industries or niche markets may present unique challenges for the technology. Industries with longer sales cycles, high-value conversions, or complex attribution models may require additional customisation or manual interventions to achieve the best results.
Smart Bidding has revolutionised the way advertisers manage their bids on Google Ads. By automating and optimising bidding decisions through machine learning algorithms, it gives you the tools to achieve campaign goals effectively and efficiently. Yes, there are some limitations to take into consideration, but overall, Smart Bidding is set to save you time, money, and help you achieve the very best results.
Want to find out how your campaigns could benefit from Smart Bidding? Get in touch with the Productcaster team or find out more about our CSS and Feed Manager services today.