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Spend Wisely — Level Up Your Google Ads with Smart Bidding

Last updated on July 19, 2021
11 minute read
Key Takeaways

  • Smart Bidding uses machine learning to optimize your ads.
  • Use it to improve ROI, conversions, traffic, or impressions.
  • PPC can be tricky -- our top tips to work smarter, not harder!

Skill Level

Beginner, Intermediate

Google Ads relies more and more on machine learning to optimize ad bids and help advertisers meet their goals. While some marketers prefer to have more control over their data and bidding strategy, the truth is that many non-experts and those with limited time can benefit from letting Google do the heavy lifting for us. 

If you don’t have the time or budget to test different bid strategies and find what works, you can use Smart Bidding to get the most out of your ads and maximize your ROI. Read on to learn about how to use this automated bidding tool. 

Back Up — What Do Machine Learning & Automated Bidding Mean? 

When you create your Google Ads, you have the option to select how much you want to bid per result (whether that’s Clicks, Impressions, Views, or Conversions). If you’re not sure where to start, you can rely on Google’s automated bidding strategies, which automatically adjust your bids to help you achieve your goal, such as increasing visibility or getting more conversions. 

Smart Bidding is a subset of automated bidding that uses machine learning to optimize your ads for conversions or conversion value — meaning you get the best value for your money! 

Google’s advanced machine learning algorithms learn from vast amounts of data — more than a single company could access or compute — to make more accurate predictions about how different bid amounts can impact conversions. You can take advantage of this to maximize your ad strategy with little work on your part. 

Google Ads currently offers five Smart Bidding options to choose from depending on your PPC goals.

shapeTarget ROAS

Best for: Established campaigns where you want to increase ROI

Target ROAS, or Target Return on Ad Spend, helps you maximize your campaign’s conversion value. You set a goal for as much revenue you want to make on each dollar spent, and Google will set the bids for your campaign appropriately to help you meet this goal.

Using your existing conversion value data, Google Ads predicts future conversions, then sets a max. CPC (maximum cost-per-click) to maximize your conversion value and achieve your target ROAS. 

Some things to keep in mind when using Target ROAS: 

  • Some conversions may have a lower or higher return than your target, but the average will be close to your target. 
  • This strategy relies heavily on your past conversion data, so most campaigns will need at least 15 – 20 conversions in the past 30 – 45 days, depending on the campaign type, to get started. For the best results, Google recommends at least 50 conversions in the past 30 days.
  • Review your budget settings to make sure you feel comfortable spending up to twice your average daily budget. Google might need to adjust your daily budget to meet your goal, but over the month-long billing cycle, you won’t be charged any more than your average daily budget would have allowed for a 30.4-day period.

shapeTarget CPA

Best for: Campaigns on a budget where you want to control cost per acquisition

Target CPA, or Target Cost per Acquisition, allows you to set a goal for how much you want to pay for each result or conversion. Google Ads aims to achieve as many conversions as possible at or below the target cost you’ve set, which means you won’t run the risk of overspending (great if you’re on a budget!). 

Wondering how much this strategy affects your ads? According to a KlientBoost case study, switching a client to Target CPA resulted in a 107% increase in conversion rate and decreased cost per conversion by 40%. 

Some things to keep in mind when using Target CPA:

  • Google Ads uses your historical data and recommends a Target CPA to get you started. We recommend following this guideline for the best results. If you set your target CPA too low, you might lose out on potential conversions. 
  • Some conversions may have a lower or higher cost than your target, but the average will be around your target. 
  • Google Ads adjusts the bids based on device, browser, location, time of day, and more.

shapeTarget Impression Share

Best for: Campaigns to increase brand awareness or generate leads

This Smart Bidding strategy automatically sets bids with the goal of placing your ad in your selected spot: on the absolute top of the page (the very first ad on the page), on the top of the page (anywhere above the organic search results), or anywhere on the first page of Google search results. This strategy is ideal for increasing brand awareness or generating leads through impressions. 

Some things to keep in mind when using Target Impression Share: 

  • This strategy is only available for Search Network ads — ads that appear in the SERP. Display Ads, which appear on Gmail, YouTube, and other sites, don’t have this option.
  • If you set your max. CPC bid limit too low, it can restrict the bids and prevent you from reaching your goal. 
  • You can adjust your bids to show ads more or less frequently based on where, when, and how people search. 
  • Keep an eye on your analytics per device for your ads and adjust as needed, as the results can differ on mobile and desktop. 

shapeMaximize Clicks

Best for: Campaigns to increase website traffic and collect data for future campaigns

This automated bid strategy aims to get you as many clicks on your ads as possible within your budget. Maximize Clicks is helpful for campaigns where your goal is to increase traffic to your website. This can be a valuable way to collect data for future Target ROAS or Target CPA campaigns. 

Some things to keep in mind when using Maximize Clicks:

  • You can set a bid cap to control the maximum amount you’re willing to spend per click. If you don’t set a max. CPC limit, Google Ads will adjust your bids to maximize your clicks while spending your ad budget. 
  • Google uses average daily budgets to determine the spend for your campaign. Bear in mind that it may be subject to over-delivery — Google increasing your ad spend in order to show your ads to more people. This could happen, for example, if traffic to your ads is slow on a particular day. In these cases, Google could increase your spend up to two times your average daily budget (but no more than that). 

shapeMaximize Conversions

Best for: Campaigns to increase conversions or gather social proof

This bid strategy aims to get you the most conversions for your campaign while spending your budget. Using advanced machine learning, Google Ads automatically optimizes bids and ad placement based on historical data and contextual signals. 

While Target ROAS and Target CPA are more focused on acquisition costs, Maximize Conversions is all about volume — getting you the most conversions possible. This is helpful if you’re working with a small budget or if you’re looking to grow reviews and social proof for your business. 

Some things to keep in mind when using Maximize Conversions:

  • You can adjust your bids to show ads more or less frequently depending on where, when, and how people search. 
  • Maximize Conversions will try to fully spend your average daily budget, so be sure you’re setting it at an amount you’re comfortable spending. 
  • This strategy doesn’t account for ROI, since it’s focused on volume, so you could see your cost per acquisition increase. If ROI is a more important metric to you, you might be better off using Target CPA or Target ROAS. 

Machine learning might sound confusing at first, but it’s actually a helpful tool to achieve your advertising goals. If you’re not sure which strategy is right for you, think about what your ultimate goal is — impressions, clicks, conversions, or ROI — and choose the strategy that optimizes for that goal. Google will only become more focused on machine learning in the future, so if you plan on using Google Ads, you should start experimenting with these options and finding what works well for you. The best part is it’s less work for you and better value for your money! 

Learn more about how to improve ad performance with our guide to PPC ad best practices.

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