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Google Ads gives you several ways to bid for your ads,
depending on what matters most to you and your business.
Smart Bidding strategies take the heavy-lifting and guesswork out of settings bids in Google Ads.
When Google Ads first launched, bidding was very manual.
You would set separate bids for individual keywords or placements.
Then mobile devices came along, which created more signals that needed to be accounted for
like device type, location, time, and day of the week.
Today, there are more signals than ever before. Imagine trying to consider all of these at once.
The human brain couldn't possibly cope with all of these signals.
This is the benefit of Smart Bidding.
It considers billions of signals to set the right bid for each and every auction.
You then spend less time on manual tasks and more time on strategic efforts,
while allowing Smart Bidding to achieve your business’s marketing goals.
In this video, you’ll learn about choosing the right Smart Bidding strategy for your business.
There are four Smart Bidding strategies that we’ll review:
Maximize conversions,
Maximize conversion value,
Target CPA,
and Target ROAS.
All of these Smart Bidding strategies use machine learning to optimize
for conversions or conversion value.
To use these bid strategies,
you must already have conversion tracking set up in your account.
The best part of many of these strategies is that they don’t require
any conversion history to start.
This means you can use Smart Bidding on a brand new campaign.
Maximize conversions automatically sets bids to help you get the most conversions
for your campaign while spending within your budget.
Similarly, Maximize conversion value,
helps you get as much conversion value as possible within your budget.
Keep in mind that in order to be able to use this bid strategy,
you need to be tracking conversion value.
These are good options if you do not have a specific cost-per-acquisition goal,
or if your campaign has zero to little conversion volume.
Even if you’re just starting out on Google Ads,
these bidding strategies do not require any historical conversion data.
Target CPA sets bids to help you get as many conversions as possible
at the target cost-per-acquisition you set.
Your Target CPA is the average amount you’d like to pay for a conversion.
Like Maximize conversions,
Target CPA does not require your account to have any conversion history.
The Target CPA you set may influence the number of conversions you get.
Setting a target that is too low for example,
may cause you to forgo clicks that could result in conversions.
If your campaign has enough historical conversion data,
Google Ads might recommend a Target CPA during campaign creation.
This recommendation is calculated based on your actual CPA performance over the last few weeks.
Keep in mind that Target CPA is best for campaigns that are not budget constrained,
since the system wouldn’t be able to provide as much volume as possible.
Lastly, Target ROAS lets you bid based on a target return on ad spend.
Your target ROAS is the average conversion value you’d like to get for each dollar you spend on ads.
Before you can apply a Target ROAS bid strategy to your campaign,
you'll need to set up conversion value tracking.
This can either be dynamic conversion value tracking,
which is the price that you sell products at on your website,
or a specific value you choose to assign to a conversion.
For example, let's say you're measuring sales for your online shoe store
and want to gain $5 worth of sales, for each $1 you spend on ads.
The goal of $5 per sale is your conversion value, so you'd set a target ROAS of 500%.
This means for every $1 you spend on ads, you'd like to get 5 times that in revenue.
To use Target ROAS bidding for Search, you must have at least 15 conversions
in the past 30 days.
Like Target CPA, you should not choose a ROAS goal that is too high.
This can cause you to miss out on valuable conversions, or your ads to not show at all.
If you're new to Google Ads, consider starting your campaigns on Maximize conversions
or Maximize conversion value,
and then switching over to Target CPA or Target ROAS once you have a goal in mind.
If you’re unsure which Smart Bidding strategy to use,
you can use the Recommendations page in Google Ads
to automatically learn which bidding strategy is a good fit.
You can then apply a Smart Bidding strategy directly through the Recommendations page.
Alternatively, navigate to the Campaigns tab.
Select the campaign whose bid strategy you would like to change.
Click ‘Edit’
and then ‘Change bid strategy’.
Once you apply a Smart Bidding strategy,
it’s important not to evaluate your performance too early.
Smart Bidding needs a learning period to gather the performance data
it needs to optimize your bids.
You should also consider your standard Time Lag for conversions.
This is the average time it takes for a click to result in an online conversion.
Factor this amount of time into the waiting period
to ensure you’re gauging conversion performance accurately.
You can learn if your campaign is in the learning period through the bid strategy report.
>From the Campaigns tab, use the Bid strategy type column to access the bid strategy report.
View the campaign’s bid strategy status at the top of the report.
This campaign is currently in the learning period.
You can also find your conversion delay in the report by looking into the performance chart.
It typically takes one to two weeks for a bid strategy to adjust,
although this largely depends on the volume of conversions.
Smart Bidding should work for all campaigns,
but ramp up tends to be faster when there’s more conversion volume.
When a bid strategy is in the learning period,
limit major changes to the campaign as much as possible.
For example, avoid budget changes, major keyword additions, and landing page swaps.
This is because the bid strategy is currently adjusting to the campaign set up.
Starting your Google Ads campaigns with Smart Bidding strategies is a good choice for both big
and small businesses, and works well with a simple account structure.
Smart Bidding can help you save time,
which will allow you to focus on more strategic areas of your business.
Now that you know about Smart Bidding, it’s time to learn about opti-score
and the Recommendations page.
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