Contents
What is Smart Bidding?
Smart Bidding Strategies
Maximise conversions
Maximise conversion value
Target impression share
Enhanced CPC
Smart Bidding: Pros and cons
Bidnamic's automation
Google has retired Smart Shopping campaigns and has replaced them with Performance Max campaigns. Get up-to-date information on Performance Max here.
Smart Bidding is one of Google’s offerings for businesses used to automate the bidding process on Google Ads. Having debuted in May 2018, it is a subset of automated bidding strategies that use machine learning to optimise conversions or conversion values for PPC campaigns.
Smart Bidding involves machine learning algorithms that train on a huge amount of data to make more accurate predictions about how different bid amounts will affect conversions. This is a job that would be unmanageable for a human or team of people to accomplish, making it an appealing tool for businesses.
Google’s Smart Bidding is a great way to automate the bidding process while still maintaining some level of control. Nevertheless, Google's bidding tool does have its flaws.
A quick overview of Smart Bidding
Google’s Smart Bidding lets users set performance targets and customise settings for unique business goals. It couples this with reporting tools (unlike Smart Shoppings ‘black box’ approach), giving you insight on bidding performance and helping you fix any issues with campaigns.
Are you getting the most value from your data?
Using Smart Bidding allows you to make use of signals, which are identifiable attributes about a user that can include details like device and location. You can then set, for example, device-specific performance targets, helping you target your desired audience. Data gained from signals can help you reduce wasted spends on your campaigns, and identify profitable opportunities, like targeting a specific area you know your products are popular in.
Another tool included in Smart Bidding is the use of simulators. These can forecast how your ads would perform if you had set a different CPA or ROAS target, helping you optimise your advertising efforts. This is another tactic you can use to help optimise your campaigns while minimising wasted spend.
To start using Smart Bidding, you need to have conversion tracking enabled. This will allow Google to see what people are doing once they've interacted with your ads, helping you to calculate ROI and profit.
Google also suggests that users have at least 30 conversions in the past 30 days before using Target CPA (a strategy of Smart Bidding mentioned below), and at least 50 conversions before attempting Target ROAS.
The 4 Smart Bidding strategies
Smart Bidding strategies have been updated, grouping some performance goals. Previously if you wanted to maximise conversions within a set budget, or to maximise conversions to a target CPA you would use ‘Maximise conversions’ and ‘Target CPA’ strategies respectively.
These two bid strategies have now been bundled together, creating ‘Maximise conversions’ with an optional target CPA. Maximise conversions works as follows:
Maximise conversions - This bid strategy aims to maximise conversion value from your budget, which can sacrifice ROAS but is a good option if you’re just looking to drive volume. If you wish, you can use a target CPA. This strategy only involves a requirement of five conversions a month, making it ideal for smaller accounts. Google will make bid adjustments to try and match your revenue or conversion goals.
Similarly, previous users of the Target ROAS Smart Bidding strategy will find it is now combined into the bid strategy Maximise conversion value with the option to target ROAS.
Maximise conversion value - Maintains your target CPA (the amount you pay for each conversion). Google will set bids based on the probability of conversion. This option tries to get a greater number of conversions while avoiding paying for unprofitable clicks.
This means you no longer need to compare and choose between Maximise Conversion Value and Target ROAS.
Target impression share - The algorithms will set bids to show your ad at the top of the page/first in the carousel as often as possible. This will increase users to your site, but this doesn’t mean shoppers viewing it have a high purchase intent. This can then dilute your conversion rate and ROAS.
Enhanced CPC - Optimises your maximum CPC to increase conversions. This strategy can be used alongside manual bids to help you increase conversions, giving you more control over the process.
The pros and cons of Smart Bidding
Smart Bidding can save you the time of manual bidding, allowing you to set and forget campaigns and leave the algorithm to bid for you. Google has access to a vast amount of data that is used for machine learning, making it a good entry point for smaller businesses with a lack of campaign data.
Similarly to Smart Shopping, Smart Bidding only offers limited visibility and control over the data being used to optimise campaigns. This can be frustrating when you’re trying to figure out a strategy on how to get more conversions. It also means that you can only set limited campaign goals.
What is Smart Shopping and who does it work best for?
While Google’s access to a large amount of data can be seen as a positive, the data may not be wholly relevant to your target audience. This can then dilute your ROAS and the number of possible conversions.
Smart bidding, unlike Bidnamic’s machine learning technology, won’t react to spikes or fluctuations in search trends, meaning you can’t take full advantage of what’s gaining popularity. It does, however, react quickly to any target changes you employ.
Bidnamic’s approach to automation
Bidnamic’s technology platform also automates the bidding process but does this at a far more granular level than both Smart Bidding and Smart Shopping.
We build an intent funnel to identify higher-quality traffic based on high intent search queries and bid accordingly. This allows us to scale as much as possible while maintaining a target ROAS and maximising conversions and prevents us from wasting spend on targeting shoppers with little actual interest in a product.
Bidnamic’s technology is also totally transparent: our clients are able to access a dashboard to see all data associated with their campaigns and how they’re performing. This lets us collaborate with clients to further optimise campaigns to provide our clients with the best possible experience from their Shopping channel.
Our platform also responds to spikes in search traffic in real-time. Bids are then adjusted as required and can be done 24/7, meaning we can stop bidding aggressively when it becomes less profitable.
Lorraine Kelly, a rainbow-emblazoned sweater and Google Shopping: why you should take advantage of surging search terms
If you’re looking for a solution to maximise your Google Shopping experience, book a free consultation with one of our specialists today.
