Bidding strategies can determine the success and failure of Google Ads campaigns’ conversions. You should have a clear goal, and to achieve that, you have to be smart. You must know when to bid higher amounts to get more leads, go for more conversions with less spend, mix automated bidding strategies with manual ones, and so on.
You need as much data as possible to be able to accomplish most of these things, analyze them, and decide which path you must take. You need to adjust your bids to match according to each campaign’s particular objective if you are using manual bidding. This consumes time, and time is money.
What Is Smart Bidding?
Google Ads introduced Smart Bidding in 2016 –when it was called AdWords back then. It was built over older automated bidding options. Smart Bidding strategies use advanced machine learning to help marketers and businesses automatize some of the processes and optimize the conversions of Google Ads campaigns.
Smart Bidding strategies get signals from devices, locations, times of day, remarketing lists, browsers, languages, and a few other variables and adjust your bids depending on your inputs.
While Smart Bidding allows you to spend less time on manual bidding, you should still give time to the algorithm to learn your campaigns. That’s why you’d better monitor your campaigns rather than set up a Smart Bidding strategy and let the code do everything for you.
Types of Smart Bidding Strategies
There are currently five types of Smart Bidding strategies.
- Target CPA
- Target Return on Ad Spend (ROAS)
- Maximize Conversions
- Maximize Conversion Value
- Enhanced CPC (ECPC)
You must carefully pick the one strategy that is aligned with your goal. The titles of strategies are self-explanatory but let us give a couple of examples before we dig deeper into them. You can use Enhanced CPC when you use a manual bidding strategy and get help from Smart Bidding strategies at the same time. Another example would be using Maximize Conversions strategy when you have no or fewer budget restrictions.
Using Smart Bidding strategies is especially practical;
- If you don’t have adequate technical know-how to optimize your bids.
- If you don’t have the resources to work with a digital marketing professional.
- If you are managing more than a few clients’ or businesses’ Google Ads campaigns.
Of course, the use of Smart Bidding strategies are not limited to these, but these are probably some of the most apparent reasons to use them.
This Smart Bidding strategy is one of the best ways to get conversions if you have a limited budget. You don’t have to worry if your spending exceeds your income since the algorithm won’t allow your costs to go over the target cost-per-acquisition on average. The only probable downside of this strategy might be getting limited conversions but the algorithm won’t spend much of your money to maximize the conversions.
You can use this strategy at the campaign or ad group level to sell as many products or services until a given deadline and budget by your client or yourself.
What happens if you choose Target return on ad spend (ROAS) as your Smart Bidding strategy? This means you want to make a specific amount of sales for each dollar you spend on an ad. For example, when you set your Target ROAS at 300%, you will get $3 of sales for each $1 you spend for an ad on average. The algorithm will adjust your bid differently in each auction, so don’t expect to spend $1 and make $3 sales in every auction.
Google will bid to maximize your conversions while trying to reach the target you set. During this process, some bids might be higher than your target but some will be lower, and at the end of the day the average won’t be higher than your target ROAS.
As mentioned above, Maximize Conversions tries to get as many conversions as possible without regard to a maximum bid limit. The algorithm sets the optimum bid using the data from your past auctions and converted users at auction time.
You have less control over the bids and your budget in this type of Smart Bidding strategy and Google doesn’t hold back spending your money. So, we recommend you pick this strategy if you have no budget limit or some extra cash to burn.
Maximize Conversion Value
Simply put, Maximize Conversion Value is a version of Maximize Conversions within budget. Also, this strategy will behave like a Target ROAS because you can set maximum revenue or profit margins when you set up conversion tracking for your account.
Maximize Conversion Value might cause a significant increase in your spending, so it’s still important to check your daily budget when you’re using this type of Smart Bidding strategy. You should also be careful with the ROI goals of your campaign. It would be to your advantage to set a target ROAS.
Enhanced cost-per-click (ECPC) is a Smart Bidding strategy that you can use with manual bidding. You will be more in control of your budget unlike Target CPA and Target ROAS strategies, which might spend more than your set maximum CPCs in some auctions as we mentioned earlier in this article. ECPC won’t allow your bids to exceed your maximum CPC while optimizing your conversions.
You can also optimize your conversion values with this strategy, not just the number of conversions. You have the option to prioritize high-value conversions on the Search Network and the Display Network.
To Summarize the Advantages of Smart Bidding
- Smart Bidding strategies can get you more conversions such as product sales, app downloads, accommodation bookings, etc.
- You can make more profit or more sales, depending on your ROI goals by using Smart Bidding strategies.
- You can optimize your conversions while using manual bidding.
- You can save time because Google can analyze much more data and adjust your bids accordingly than you can do yourself —even with the support of a team.
- You can increase brand awareness as well as conversions.
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