In July of 2016, Google AdWords introduced a new feature that changed the way advertisers use and manage bidding in Google Ads. That new feature is called Smart Bidding. Over the past few years, Smart Bidding has been improving its results and performance as the machine learning technology is getting smarter.
What is Smart Bidding?
Smart bidding is a subset of automated bidding strategies that use machine learning to optimize for conversions or conversion value in each and every auction. Target CPA, Target ROAS, Maximize Conversions, and Enhanced CPC (ECPC) are all Smart Bidding strategies.
In addition to the machine learning capabilities, it includes a wide range of signals to tailor bids to the specific searcher. These signals include location, time of the day, device, demographics & much more. This can ensure that each and every bid is being updated in real time to save time and improve your return on investment.
What are the benefits of Smart Bidding vs manual bidding?
When using Smart Bidding, there are a few key benefits that can help you save time and improve performance. One key benefit is the wide range of signals that tailors each bid in real time based from the searchers location, time of day, device & more. With manual bidding, you can create separate bid adjustment percentages for these signals specifically, but with the keyword bid auctions changing all the time it would be hard to keep up with competitors who are using smart bidding.
Another key benefit of is being able to have flexible performance controls. With certain Smart Bidding strategies, you can set your performance targets and customize settings to your unique business goals. For example, if you are using the Target CPA smart bidding strategy and set your target CPA to $30, Google Ads will only target specific search terms (that have a high relevancy to previous converters) to show your ad while making sure to meet that $30 CPA target.
One last key benefit is that it’s completely hands off. Once you set your strategy, the machine learning will do the rest of the bidding. This allows more time to focus on micromanaging negative keywords and ad creative along with creating new marketing strategies with Display, Shopping & YouTube.
When should I use Smart Bidding?
This feature can work successfully for large and small businesses. To evaluate results accurately, Google Ads recommends having historical conversion data to measure performance over a long period of time so that the machine learning technology can optimize bids properly. A great way to use Smart Bidding strategies is when manual CPC isn’t producing good results. We usually find using manual CPC for new clients to gather conversion data and then switching to smart bidding on low performing campaigns generates the best results. A general rule in search campaigns is to always be testing or experimenting, so trying out smart bidding when manual bidding isn’t performing well is worth a shot.
Google Smart Bidding Case Study
We are currently using Smart Bidding on many of our clients and generally see improved results compared to manual CPC. One of our campaigns had an average CPA of $74 over a three month period with manual CPC. After switching the campaign to the Maximize Conversions smart bidding strategy, the average CPA decreased to $31 over a three month period while experiencing a 165% increase in conversion rate.
The introduction to this new feature was a massive change to Google Ads and as we continue to see its results, it will continue to improve and adapt. Smart Bidding can be a very useful tool to utilize for PPC specialists, although smart bidding doesn’t always align with certain advertising goals. If you are experiencing mixed results, remember to reflect on your initial goals of advertising to help determine a winner between manual bidding and smart bidding.
Google is frequently releasing new features that involve Smart Bidding, so it’s always important to keep up with the updates. Recently, Google Ads had just released two new features that will improve your performance – seasonality bid adjustments and setting conversions at a campaign level.
If you need help maximizing the ROI on your digital marketing campaigns, contact us to speak with our PPC specialists.