Last Updated on August 1, 2020
Machine Learning In Action
Smart Bidding is a function on Google AdWords that uses machine learning to help you optimize your bid strategy for every conversion. Find out what’s going on inside Smart Bidding’s brain, and if you need to turn it on in your AdWords account.Download "How to Create A High-Performing AdWords Account" eBook »
Why Do You Need to Be Smart?
Bidding itself has become more complex. We’re bidding on different devices in different locations at different times with different ad formats. All of this makes the process of putting one fixed CPC (cost per click) value on a keyword less and less useful thus limiting your chances of getting conversions.
The idea of AdWords Smart Bidding is that machine learning can take in a wide range of contextual signals using the parameters you give it to give you the ability to have flexible bids, maximizing your conversions. Basically, Smart Bidding makes real-time bid decisions on every auction you’re eligible for, based on the chance of you winning.
Can You Use Smart Bidding?
First, you need to have a few things set up to use Smart Bidding:
- Conversion tracking must be turned on. Smart Bidding is about conversions. If you’re not tracking them, it won’t work.
- You need to have enough regular conversions for the machine learning to learn. You can use it with low conversion value, but the more data it gets the better it will perform. So if you’re not getting many conversions, maybe it’s best to wait until things speed up before turning on Smart Bidding.
- Know the value of a conversion so you can calculate return on investment.
Different Strategies for Smart Bidding
Enhanced CPC/ Target CPA
Best for getting more conversions or sales. Enhanced CPC still relies on some manual decisions on bids. Giving you an increased bid, or decreased bid, when it thinks it can help a conversion. A bit like nitrous oxide in a racing car. Giving the engine a boost when required. This allows you to keep some control on your bids, which is good if you’re on a smaller budget.
Target CPA Focuses on Conversions
The key here is that it does not focus on the cost of those conversions. It will aim to stay within your target CPA, but it is designed to push for as many as possible. Not as low a cost as possible. Google recommend you only use these methods if you have 30 conversions within the last 30 days. To give it enough data to make good decisions.
Target ROAS (Return on Ad Spend)
Best if your goal is to increase actual revenue. Again sets bids real time, while trying to meet your target ROAS. So here the bidding is aiming to get you the best value for money on every conversion you get. Focusing on ROI over quantity of conversions. Here Google thinks that their Smart Bidding tool needs more information to work well, so they suggest that you don’t use it unless you have at least 50 conversions in the last 30 days.
Deciding if AdWords Smart Bidding is for you depends on your account performance. If you’re still struggling to get conversions, then you need to focus on getting things moving before letting the robots take over. If your account is already functioning well and you feel Smart Bidding could give it an extra boost, then why not try it out?
Do you use Target ROAS, enhanced CPC and Target CPA? Has it help your AdWords account performance?