What is Smart Bidding?
The feature was introduced to help people save their valuable time and improve their return on investment. To use smart bidding, you need to enable conversion tracking, unless you are using ECPC along with any Display Campaigns that you might be running.
Why use Smart Bidding Feature?
There are four significant benefits of using the Smart Bidding feature:
- Google’s Advanced Machine Learning Algorithm
- Wide Contextual Signals Range
- Transparent Performance Reporting
- Flexible Performance Controls
What’s happened with Google?
In their bid strategy report for the campaign that uses Maximise Conversions and Target CPA on Search, you will now be able to see a new section for the “Top Signals.” This is not an extensive list, but from now on, Google will be starting to surface some of the essential signals you can use for budget optimization. This will also include the signals it uses for targeting, which one is more or less likely to get converted.
Google is now starting to realize people crave transparency, and therefore, it needs to be. This is part of a bigger picture. As more and more people are getting empowered, taking control of their data, large corporations are coming under a significant amount of pressure to show higher performance.
Google is one of those companies which is under the pressure of scrutiny in terms of how it is controlling its activities. In short, the old “bully” tactics are no longer going to work here for Google.
People want more transparency, clarity, and control over their own data. It is the same for advertisers as well. It is also clear that Google wants people to know that they support transparency across all product and/or service portfolios. Transparency must be all-encompassing in regards to the new signals that Google is offering regardless of the industry or lead type.
Transparency vs. Trust – A proportional relationship
It is no longer a matter of debate that transparency increases trust in products. Advertisers will be more willing to adopt “smarter” options for activating “smart bidding” and “smart campaigns” when trust is gained.
The more advertisers trust Google, the better they will be able to see the increased adoptions across different product portfolios. This makes it clear that Google’s decision to be more transparent benefits not only users but also itself. So, it is healthy to be a bit skeptical. A good analogy would be when you are reviewing ratings for a specific product online, but you only see hundreds of 5-star ratings. Generally, 100% 5-star ratings should raise some skepticism as almost nobody, or any product or service is perfect. There is nearly always some level of criticism. It’s no different here as Google continues to try and introduce new “signals” for campaigns, and gain the trust of its users.[bctt tweet=”Smart bidding works well for both types of business, big and small.” username=”ThatCompanycom”]
It is crucial for users to remember that Google only displays a portion or part of the list rather than the full, exhaustive list of intent and contextual signals it is using. Try not to be fooled and rush into making decisions just based on the top surfaced signals on the bidding strategy.
Target CPA Bidding
Target CPA is the average amount that you would like to pay as an advertiser for any individual conversion. The lower the target you set, the fewer conversions you’ll have.
Target CPA, at its very best, sets bids at a much more flexible level. This fosters as many conversions as possible at the target cost-per-acquisition (TCPA). The advertiser sets this TCPA. TCPA optimizes the bids automatically and then offers bidding capabilities in real-time to customize the bids for every single auction.
How it works
TCPA is known for using historical data from the account, along with the contextual signals that are present during the auction. TCPA will find the most suitable bid for your ad, which will set to achieve an average CPA, which will be equal to the TCPA.
Some conversions cost much more than the expected target, and some will cost less. Google will try to ensure that your overall cost per conversion stays equal. The changes in the CPA depend on the factors that are outside the control of Google. These include the changes taking place on your website or increased competition during each of the individual search auctions.
For instance, you chose the Target CPA to be $10. Google Ads will then automatically set the bid trying to get as many conversions for you as possible. This helps improve your bidding performance on every ad auction. For this purpose, Google uses real-time signals like browser, time of the day, device, location, remarketing lists, and more.
Maximize Conversion Bidding
This is pretty self-explanatory. Maximizing conversions and setting bids automatically that can get the most conversions possible for the daily allotted budget. It also optimizes the above strategies through auction-time bidding capabilities. If you have a low volume of conversions or if your campaign budget is limited, this is a more suitable option compared to TCPA.
How does it work?
The feature also uses past information about the campaign and evaluates its contextual signals present during the auction-time. Maximize conversion bidding finds a suitable bid for every single ad automatically. It spends the budget according to what seems eligible to it.
- Check your budget daily. “Maximize conversions” does the best it can to see that you spend all of your budget. It implies that if you are spending less than what you are currently budgeting… then maximize conversions can help you significantly.
- Check your goals for Return on Investment. If you have a ROAS goal for specific individual campaigns, like return on ad spend (ROAS) or targeted cost per acquisition (CPA), you could test out the TCPA bid strategy. Like the “Maximize Conversions” bidding strategy, these strategies will allow Google to automatically set bids for every single auction. The goal is to achieve an average CPA rather than spending your entire budget to generate the maximum amount of conversions possible.
Who is Smart Bidding for?
Smart bidding works well for both types of business, big and small. It can help optimize bidding and improve your CPA based on the data available for individual campaigns. It is also recommended that you have at least 30 conversions in your history so that there is enough data to work with moving forward. Without at least 30 conversions, Google’s learning algorithm cannot make accurate decisions on which keywords it needs to make adjustments to get you the optimal return. So, don’t go into this thinking that it’s a “set it, and forget it” type scenario. Monitor the changes and results for the best results.