Business & Finance

Smart Bidding: Definition and Best Strategies

It’s important to try new bidding strategies in order to remain competitive and get the most out of your campaigns. If you’re not trying something new, you’re missing out on potential opportunities to improve your performance.

One of the best ways to find new bidding strategies is to experiment with different approaches, something we will be talking about today.

Google AdWords offers a number of different bidding strategies to help you reach your advertising goals. 

Understanding the difference between these bidding strategies and knowing which one is best for your business is essential to getting the most out of your advertising budget. 

In this article, we will define smart bidding and explore the pros and cons of using this type of bidding strategy. 

We will also look at some of the best practices for using smart bidding in order to get the most value from your advertising dollars.

What Is Smart Bidding

Smart bidding is a Google Ads feature that uses machine learning to automatically adjust bids for your ads based on auction-time data. 

It’s designed to help you get the most out of your ad campaigns by automatically adjusting bids to make sure you’re always competing for the best spots and getting the most clicks possible.

How Does it Work

Smart bidding is a machine learning system that uses historical data and live data to automatically adjust your bids for each auction. 

The goal of smart bidding is to help you get the most out of your ad spend by getting your ads in front of people who are most likely to convert.

To do this, smart bidding looks at a variety of factors, including:

  • Your conversion data
  • The search terms people are using
  • The device they’re using
  • The time of day
  • Their location

Smart bidding is always learning and constantly tweaking your bids to get you the best results possible. 

Because of its versatility and thoroughness, many of the best lead generation companies use or recommend it. The goal is to get your ad in front of people who are most likely to convert, so you can get the most out of your ad spend.

Practical applications and examples of smart bidding

There are a number of different ways that you can use smart bidding to improve your ad campaigns. Here are a few examples:

Improve click-through rates

Smart bidding can help you improve your click-through rate (CTR) by automatically adjusting your bids to make sure you’re always in a position to get the most clicks possible.

Increase conversion rates

Smart bidding can also help you increase your conversion rate by optimizing your bids for conversions. This means that Google will automatically adjust your bids based on the likelihood that a click will lead to a conversion, making sure you’re always getting the most value out of each and every click.

Save time

One of the biggest benefits of smart bidding is that it can save you a lot of time. manually managing bids for each and every ad can be extremely time-consuming, but with smart bidding, you can let Google handle it all for you.

Get more out of your budget

Smart bidding can also help you get more out of your budget by making sure you’re always getting the most bang for your buck. 

By optimizing your bids for conversions, you can make sure that you’re never overspending on clicks that don’t lead to sales or leads.

Reach the right people at the right time

Another benefit of smart bidding is that it can help you reach the right people at the right time. 

By using data from past auctions, Google’s machine learning algorithms are able to identify patterns that indicate when certain demographics are more likely to be active and searching for your products or services. 

This means that you can use smart bidding to make sure your ads are being shown to the people who are most likely to convert, making the most out of every single impression.

Difference Between Smart Bidding and Automatic Bidding

Now you might have heard of the term – automatic bidding. However, that is different from smart bidding.

When it comes to Google Ads, there are two main types of bidding: smart bidding and automatic bidding. So, what’s the difference between the two?

Smart bidding is a type of automated bid management that uses machine learning to optimize your bids for conversions or other specified goals. Automatic bidding, on the other hand, is a more traditional approach that relies on preset rules to manage your bids.

Both smart bidding and automatic bidding can be effective ways to manage your Google Ads campaigns. 

However, smart bidding may be a better option if you’re looking for more control and flexibility in your bid management. Automatic bidding may be a better option if you’re looking for a simpler way to manage your bids.

How to Use Smart Bidding – Conversion Tracking and The Algorithm Learning Period

If you’re interested in using smart bidding for your Google Ads campaigns, there are a few things you need to know. 

First, you need to set up a conversion tracking pixel on your website in order to track conversions. This is necessary because smart bidding optimizes for conversions, so without conversion data, it wouldn’t be able to do its job properly.

The algorithm learning period is the time during which Google’s machine learning algorithms analyze your data in order to identify patterns that indicate when ads are more likely to be clicked on. 

This period can last anywhere from a few days to a few weeks, so you’ll need to be patient while Google does its thing. Once the learning period is over, Google will start automatically adjusting your bids based on the data it has collected.

You can use smart bidding for any type of Google Ads campaign, including search, display, and video campaigns. However, it’s important to note that not all campaign types are available in all countries.

To use smart bidding, simply select the “smart bidding” option when creating or editing your campaign. Then, choose the bid strategy that you want to use. And on that note…

Smart Bidding Strategies

There are a few key smart bidding strategies that can be used to help you get the most out of your PPC campaigns.

Target CPA

Target Cost-Per-Acquisition (CPA) is a Smart Bidding strategy that sets bids to help get as many conversions as possible at the target CPA you set. With this strategy, you set your maximum bid and Google automatically adjusts your bids to try and hit your CPA target.

Use Target CPA if you care about getting conversions and your main goal is to grow conversion volume while meeting a specific cost-per-acquisition. note that this option is only available if you’ve linked your Google Ads account to an Analytics property that has conversion tracking set up.

Enhanced CPC

Enhanced Cost-Per-Click (ECPC) is a Smart Bidding strategy that automatically raises or lowers your max CPC bids to help get more conversions while trying not to spend more than your target ROAS. This is a variant of the standard CPC bidding strategy that uses machine learning to automatically adjust your bids based on what is most likely to result in a conversion.

Use Enhanced CPC if you’re interested in growing conversion value while maintaining or improving your return on ad spend (ROAS).

Maximize Conversions

Maximize Conversions is a Smart Bidding strategy that sets bids to help get the most conversions possible from your ads, while spending your budget. 

If you care about getting conversions, and you don’t have a specific CPA goal in mind, use Maximize Conversions.

Maximize Conversion Value

 Maximize Conversion Value is a Smart Bidding strategy that sets bids to help get as much conversion value as possible from your ads, while spending your budget. 

If you care about conversion value, and you don’t have a specific ROAS goal in mind, use Maximize Conversion Value.

Target ROAS

Target Return on Advertising Spend (ROAS) is a Smart Bidding strategy that sets bids to help get as much conversion value as possible from your ads, while trying to achieve the target ROAS you set. 

Use Target ROAS if you care about conversion value and your main goal is to grow conversion value while meeting a specific return on ad spend (ROAS) target.

Resume Bidding

This is a strategy for when you want to pause your campaigns for a specific time period, but don’t want to lose your position or momentum. 

With resume bidding, you can set a start and end date for your campaign, and Google will automatically adjust your bids during that time period to try and maintain your previous performance.

Position-Based Bidding

This strategy allows you to bid based on what position you want your ad to show up in. 

For example, you can choose to only bid on positions one and two, or bid more aggressively to try and secure the top spot.

Conclusion

Smart bidding is a great way to get the most out of your PPC campaigns. By using one of the many different smart bidding strategies, you can target a specific goal such as CPA, ROAS, or impressions. 

Smart bidding can be configured manually or through Google’s automated bidding options. Whichever route you choose, maximizing conversions and conversion value should be your main goal.

Rick Seidl

Rick Seidl is a digital marketing specialist with a bachelor’s degree in Digital Media and Communications, based in Portland, Oregon. He carries a burning passion for digital marketing, social media, small business development, and establishing its presence in a digital world, and is currently quenching his thirst through writing about digital marketing and business strategies for Find Digital Agency.

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