Google Ads provides a number of automated bidding strategies, but four are “smarter” than the rest: these are Google’s Smart Bidding Strategies, and if you aren’t using them, you probably should be.
These strategies harness the power of machine learning and tailor bids based on a wide range of signals relevant to the searcher’s intent. By looking at the user’s location, device, time of day, and much more, Google can help you deliver ads at the right time to the right audience at the right price.
Smart Bidding is “smart” because it optimizes for conversions or conversion value. The goal is to provide a better ROI from your advertising. Thus, all Smart Bidding strategies require that you define your campaign’s goal – either to generate leads, close sales or generate website traffic – and enable conversion tracking.
Smart Bidding offers metrics relative to conversions and provides additional tools to help increase conversions including simulators to forecast conversions using different bid targets, experiments to test Smart Bidding performance against your current bidding method, and enhanced reporting to better analyze how past bidding strategy changes have impacted performance over time.
Here are the four Smart Bidding Strategies you should consider:
Enhanced Cost-Per-Click (ECPC)
With ECPC, you manually set keyword bids, and choose Enhanced CPC to allow Google to bid higher or lower automatically based on other relevance signals, like location, demographics, device and more. Google bids higher when conversions are more likely, and lower when conversions are less likely.
ECPC helps increase conversions from manual bids but can be restrained by the max CPC you set. It helps keep your CPC the same as a manual bid, with better performance.
In this case, Google’s algorithm targets searches that are most likely to convert, and bids higher on them to drive as many conversions as possible within your daily budget. You’re able to set max bid limits. It uses some of the same signals as ECPC and other automated bid strategies to boost conversions and is ideal if you have a low conversion volume.
Target Cost Per Acquisition (TCPA)
Google looks at previous conversions to set bids that result in a TCPA that you set. To deliver good results, Google needs enough data to make good bidding decisions. It recommends at least 30 conversions in the past 30 days for best results using TCPA.
Target Return on Ad Spend (TROAS)
Similarly, you can set the total ad spend and the percentage of that figure that you’d like to realize in returns. First, though, you should define what each particular conversion is worth. With this information, Google bids on keywords to return the percentage of the ad spend as conversion value.
As with TCPA, you need to provide enough data for Google to make informed bids by achieving a minimum number of monthly conversions. Google recommends 50 conversions over 30 days to be successful with TROAS.
Does it work?
This is a question you should ask about all your advertising strategies, all the time. The only way to answer it is to test, often. For clear, unmistakable answers, keep the tests simple and consistent. Google recommends looking at a single KPI for each test and running one test at a time. Use historical performance within the KPI to set the benchmark you hope to improve upon. By using draft campaigns and experiments, you can set the expectation for a new campaign’s performance, and later compare the expected results to the benchmark and with the actual results.
As mentioned earlier, Google requires a certain minimum number of monthly conversions to achieve a suitable confidence level in its recommended strategies. This also applies to the data required to analyze performance after the fact. In short: more data equals more reliable metrics. When testing, the advice is to “go big or go home.”
Choose the largest campaign you can to experiment with to ensure you’re obtaining enough data for meaningful analysis. Split the test, retaining half as a control – but make sure both groups achieve at least 30 conversions per month. If you put less traffic toward the experiment, you’ll have to achieve more conversions overall to meet the 30-conversion threshold.
Tests require time to be useful since Google’s AI has its own learning curve as it compiles more data. After setting up a test, wait a week or two before you begin looking at test results as reflective of what’s really happening, and let the test run for a few weeks more. Only then should you make strategic decisions or adjustments. If the test succeeds in advancing your goals, apply it to other campaigns.
Other automated bid strategies
Google provides other automated bidding strategies that can be useful, but which aren’t tied to conversions and might be considered as secondary strategies. These are Target Impression Share and Maximize Clicks.
Maximize Clicks is fairly self-explanatory. If your goal is to increase visits to your website, Maximize Clicks will automatically set your bids accordingly, within your pre-set budget. It can be applied to a single campaign or group of campaigns.
Target Impression Share helps increase visibility on Search Engine Results Pages (SERPs). It sets bids to show your ad on the absolute top of SERPs, on the top of the page, or anywhere on the page, but doesn’t guarantee you’ll achieve your chosen placement goal every time.
Like the Maximize Clicks strategy, it can be used on a single campaign or campaign portfolio. A TIS strategy set to achieve 55% placement at the absolute top of SERPs tells Google Ads to set CPC bids accordingly within the Max CPC limits you set, but setting the bar too low can jeopardize your chance of attaining the share of impressions you hope to.
What it means for you
Smart Bidding is a smart decision – it’s another impressive tool in the Google Ads toolbox that can save time and improve your ad spend ROI. It helps simplify a complicated process and makes outcomes more predictable. Driving conversions is at the heart of Smart Bidding, and more conversions make dollars – and sense – for your business.
Get More Conversions with Smart Bids
was written by me, Greg Norton – also known as webzenkai. I’ve got more than two decades’ experience building effective websites and powerful email campaigns that yield results. Feel free to contact me regarding this article or anything else you find on this website.