What is Google Smart Bidding & How is it Different from Automated Bidding?

What is Google Smart Bidding and How Is it Different From Automated Bidding
June 21, 2019 MadMarTech
There are so many bidding strategies available on Google to get the best out of your ads. Hence it is important for the marketers to understand the intricacies to optimize the campaigns. At this point in time, Google has 3 kinds of bidding:
a. Manual Bidding
b. Automated Bidding
c. Smart Bidding

What is Automated Bidding?

Automated bidding is a bidding strategy where you allow Google’s machine learning algorithm to do the job of optimizing the campaigns. Whenever you do manual bidding, you can only learn from the historical data available or even test for a few days to come up with an ideal bid. Even after all these efforts, it is not guaranteed that the bid was optimal. However, when you use automated bidding Google will optimize your campaign based on the campaign goal at the time of the auction. It considers many factors into account while choosing the right bid for that auction. For example time of the day, browser, location, device, competitive environment, etc.

Manual Bid Adjustment in the Automated Bidding

It is great that Google is doing the heavy lifting for us. However, it becomes cardinal to balance the automated and human touch. If you already know that some clicks are worth more than the other, then bid adjustments can help you achieve that. For example: If you know that a 25-year-old user has a tendency to buy your product on a mobile device in London, then you could bid higher whenever there is an auction on this user’s browser.

Here are some available bid adjustments that you can play around with:

Here are some available bid adjustments that you can play around with:

Device: Bid higher(up to +900%) or lower (up to -100%) for a certain device like computers, tablets, or mobile devices.

Location: Bid higher( up to +900%) or lower( up to -90%) for a certain geographic location that is likely to reach a campaign goal or for people around your business location.

Schedule: Increase (up to +900%) or lower (up to -90%) for specific days or even certain time of the day.

Targeting Content: Relevant for display and video ads, you can bid higher(up to 500%) on a particular video or a Youtube channel or even a website of your choice that you believe would convert or reach the campaign goal.

Targeting Method: Google also allows you to set a higher(+900% max) or a lower bid(up to -90%) for a specific targeting method like topics, placements, or other contextual targeting methods on both search and display network.

RLSA: Bidding higher or lower is feasible even for remarketing lists for search ads. The range is -90% to +900%. It is recommended to use bid adjustment for RLSA as they have the highest possibility to convert.

Interactions: You could raise bids to show your call only ads more frequently by raising the bids. The bid range is same as above.

Demographics: Bid higher for a certain demographic group that could lead to a conversion or likely to reach the campaign goal. The range is the same as above for this category as well.

Now that we understand what automated bidding is, let us understand what is smart bidding and how different it is from automated bidding.

What is Smart Bidding?

Smart bidding is a type of automated bidding that is solely focussed on driving conversions. Google analyses all the signals it gets during an auction using the machine learning algorithm to make a decision on the bid for that particular auction. There are 4 kinds of smart bidding strategy available:

  1. Target ROAS
  2. Target CPA
  3. Enhanced CPC
  4. Maximize conversions

Target ROAS

Focuses on the conversion value itself. Use this smart bidding to get the maximum conversion value for the given budget. The algorithm bids are higher on the higher revenue product. As you might have guessed, it is suitable for eCommerce where the product cost varies.

Target CPA

Focuses on getting a maximum number of conversions whilst maintaining the average conversion cost equal to the set target CPA. The perfect strategy for getting leads when you already know how much is a lead worth to you.

Enhanced CPC

This smart bid strategy gives you great control while taking advantage of automation. Use enhanced CPC when you would like to get maximum conversions for the set maximum CPC. Google will bid 30% higher in the auction that is likely to convert and also bids lower on the keywords that would not convert/have a low-quality score.

Maximize Conversions

As the name suggests, it maximizes the conversions while sticking to the given daily budget. It is good to note that your daily budget will be exhausted when you use this bid strategy.
Based on your budget limitations, campaign goal and the return expectations, choose your bidding strategy accordingly.

As always, test your campaigns and keep an eye on the budget while using smart bidding strategy.