Google is one of the biggest platforms for advertisements. With the rise in technology and Artificial Intelligence, every industry is adopting innovations. In these times, how can Google stay behind?

That’s why they have a new and much better bidding scenario. An automated bidding system that is easy to use. So, if you have zero experience in Google advertisements yet want to try it, this is for you.

It’s Smart Bidding in Google Ads.

It has made the entire process of bids, which was once extremely complex, now much simpler. Earlier, the PPC experts had to do all the work manually, such as adjusting the prices of bids, checking the relevant keywords, and search queries. There was a lot of manual work involved.

Keeping track of bids for every auction was difficult.

But now, due to smart bidding, the system has changed. You can optimize your campaign and use this smart strategy to achieve your campaign objectives.

But how can you implement it? For that, you must know about its types. In this blog, we will discuss this topic in detail and a step-by-step strategy for implementing it.

So let’s get started.

What is Smart Bidding in Google Ads?

Smart Bidding in Google Ads is an automated bidding system powered by machine learning. It uses advanced algorithms to adjust your ad campaign bids in real-time, with the aim of optimizing for specific advertising campaign goals.

But how does the algorithm even bid?

The system uses a wide range of historical data. It includes the performance of ad campaigns on several platforms and specific audience signals. These combined help this system bid in real-time. It bids on each individual auction.

There are various goals that you can achieve through smart bidding. It can increase conversions or its value. If you want more conversions, use target CPA. And if you want more money from conversions, you can implement target ROAS. Based on your desired goal, you can pick the ideal strategy.

Smart bidding gives you a great bid value, better than what you had before for your campaign. These algorithms change the bid based on different factors. Some of these are:

  • How well the ad campaign is doing for all users.
  • Things like where the user is and location intent, physical location, device location
  • The device they’re using, smartphone, tablet device
  • Keywords they’re searching for, i.e., matching keywords, relevant searches
  • It also looks at when the ad shows up during the day and what ad they see.

How Does Smart Bidding Work?

Before the system sets your bid value, it considers four major things. It’s important to know these so you can understand it’s working and get the best results. This wider range of parameters considers additional signals so you get the best results from your search bids.

The first is the contextual signals, which are at the bidding time. Second is auction-time predicted conversion rate or conversion value per click. It means Google guesses how well your ads will work when people click on them. These algorithms are trained on the vast scale of data, which later makes accurate predictions.

Thirdly, search query-level performance across all your campaigns. It checks how good your ads are for different search terms, no matter which campaign they’re in. Lastly, the target budget/CPA/ROAS is specified. It is about setting goals for how much money you want to spend, how much you’ll pay for each sale, or how much profit you aim to make with your ads.

After assessing all these four major factors, the algorithm will bid for the value that is according to your budget but still brings more conversion value.

But there’s one thing you should know.

It’s not done just once or twice. The entire cycle is repeated millions of times for every bid. It’s possible because of the usage of advanced machine-learning tools. It saves all the data of previous bids, audience signals, their conversion process, and other factors, making the best bid for your ads.

Benefits Of Smart Bidding Strategy

It is a powerful standard strategy that can make your campaigns yield better results. Here are some key benefits of implementing this strategy for your business.

  • Optimized Spend: Smart Bidding aims to maximize the value of your advertising budget by adjusting bids for each auction to achieve your specific conversion goals.
  • Precise Targeting: It considers user behavior, mobile device, location, and time of day, allowing for more accurate ad targeting.
  • Flexible Goals: You can choose from different Smart Bidding strategies to align with your specific objectives, whether you want to maximise conversions, achieve a target return on ad spend (ROAS), or control costs with a target CPA.
  • Efficiency: Smart Bidding automates the bidding process, saving you time and effort in manual bid adjustments.
  • Better Results: It leverages machine learning and real-time data to make data-driven smart decisions, which can lead to improved campaign performance.

4 Types Of Smart Bidding Strategies

Smart bidding strategies include techniques that utilize Google AI to improve conversions in every auction. It is also known as auction-time bidding. Now, t let’s discuss four basic strategies you must know.

1. Target CPA (Cost per Action)

This approach is suitable for both ads, i.e., search and display ads. The bids are adjusted so that the number of conversions keeps increasing. But what about the cost?

You don’t have to worry about that because the conversions are achieved within the cost goal you chose or below. This is also referred to as cost-per-action.

But why should you choose this approach?

It’s to increase company conversions, such as increasing your mobile app downloads, sign-ups, sales, or downloads. This setup also monitors click costs. This is made possible by checking the historical conversion data of the ad campaign.

So, if a person clicks on the ad but doesn’t take the desired action, you don’t have to pay for it. In short, with it, you can get a cost-per-click for every bid. Here’s how you can do it.

Firstly, you need to establish an average target CPA. It is the average amount that you’re willing to pay. However, there’s a possibility that some conversions can be lower than the target, but others might be higher. But the system will maintain an average that’s under your target CPA.

The best part is that this feature is available for both individual and all types of remarketing campaigns. If your conversion volume is less, then tCPA is not ideal for your business goals.

2. Target ROAS (Return on Ad Spend)

This strategy automatically targets an optimal level of return on advertising costs. In contrast to the traditional focus on clicks or conversions, this strategy prioritizes maximizing revenue or returns on investment.

Here’s how it works.

Google Ads will extract the values you provide while predicting the conversions and other leads you might get. After assessing this, it establishes a maximum cost per conversion. It’ll optimize conversion value and return on ad spend increases.

Like other bidding strategies, you should activate conversion tracking for your ads. Issues with conversion tracking can cause a lot of problems. So, assign values to these conversions.

By having an actual or perceived value for conversion, Google can easily calculate bids with a maximum possibility of generating high ROAS. But make sure to set a bid limit, as it allows you to focus on the positive return of your ad investment.

3. Maximize Conversions

By the name, you can tell that this strategy is to get the maximum conversions within your ad budget and per-day spending limit. It’s somewhat like the Maximize Clicks strategy because it utilizes a daily budget to get maximum conversions within your marketing budget.

This strategy could work for you if you want to get as many conversions as possible without spending too much money.

4. Maximize Conversion Value

This type of approach prioritizes the value generated from conversions over the quantity. It involves automatically assigning an optimal cost-per-click bid for ads each time they become eligible to appear.

But there’s an extremely significant thing that the Google Smart Bidding system is doing in this approach.

It’s considering your revenue metrics and adjusting the bids according to the revenue. However, it’s important to note that this system is designed to utilize your daily budget fully. Therefore, it may not be optimal if you’re closely managing your complete budget.

It is the main factor that differentiates it from the Maximize Conversions strategy.

More: 11 Types Of Bid Strategies

What Bid Strategy To Choose And When To Choose?

There are many bidding strategies. Most often, people are confused between two strategies. So here’s a table of differentiation to help you choose which strategy you should choose and when.

AspectSmart BiddingAutomatic Bidding
Automation levelHighModerate to Low
Bid level of controlAutomated, with some manual options at the keyword levelMostly automated, limited control
Learning capabilityMachine learning, continuous improvementLimited learning
Bid adjustment speedReal-time adjustments based on data and flexible performance controlPeriodic adjustments, less agile
Campaign typeWell-suited for complex campaignsBest for straightforward campaigns
BudgetEfficiently uses budgetMay not fully optimize the entire budget

Step-by-step Strategy of Smart Bidding Implementation In Google Ads

If you use Smart Bidding in Google ads, you can benefit from making your bids automatic. Furthermore, the usage of machine learning makes your ads more effective. Here is a step-by-step strategy on how you can implement this approach. It’s an important digital marketing strategy in which search engines do all the optimizations.

Step 1: Open Your Google Ads Account

Log into your Google Ads Account. You’ll see the control panel. Click on it to get complete access to the campaign settings here.

Step 2: Choose a Bid Strategy For Your Campaign

Once you open the dashboard, click on Settings and then Campaign Settings. These options are available in the main menu.

Now, you should find the Bid or Bid Settings section. After clicking on the Bidding section, you’ll see an option for Smart Bidding. If you don’t find any option labeled as that. Then check for:

  • Test smart bidding
  • Enable smart bidding

After clicking on this option, the default bid type for the campaign will appear. Below this, there is an option known as Change Bid Type. You can choose either of the options, i.e., manual or automatic bidding.

Step 3: Select Automatic Bidding and Targets

To select Smart Bidding, you should select the Automatic Bidding option. Now, all the available targets relevant to your business will appear. What are these targets? These targets are:

  • CPA Target
  • ROAS Target
  • Maximize Conversions
  • Maximize Conversion Value

You can choose the objective which is most relevant to your business needs.

Step 4: Make Additional Changes

This is an optional step. If you want to readjust the settings after selecting the bid option, such as changing the ROAS value, etc., you can do it in this step. But ensure these settings align with your business objectives.

Step 5: Save All The Changes

Now that you’ve confirmed all the settings, adjust it and click the save button. After saving, your Smart Bidding campaign will be applied to your Google ads campaign. Machine learning algorithms will optimize your bids.

Ending Thoughts

This smart bid strategy is crucial to your Google ads’ success. The entire system of bids heavily relies on algorithms learning the data and optimizing the bids so you can achieve the desired goals, whether it’s conversion, brand awareness, etc.

The task that used to take hours is now done in minutes due to machine-learning algorithms. Remember, the more quality data these systems provide, the more chances you have to achieve your marketing performance goals.

But you must choose a suitable bid strategy and compelling ad creative according to your target audience. Due to this technology, digital marketers don’t have to go through the hassle of bidding manually. Instead, they can shift focus to more important things, such as making creative strategies and informed decisions.

Businesses are leveraging this technology to achieve their objectives. Remember to have a clear goal and properly track your strategy. That’s the key to generating high results with better return on investment.