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Smart Bidding at Scale

5 min read

The life of a digital marketer is challenging. Constantly juggling both communications & marketing, analyzing an increasing amount of “big data”, and setting strategic plans. Well, thanks to advances in technology, it’s easier to manage complex PPC accounts. Now we can lean into automation by using elegant solutions to increase our productivity and spend more time working on bigger picture strategies. Talking here about working smarter and winning more!

Here at Tesonet, we combine human knowledge with various tools to enhance our efficiency. And we just can’t get enough. So since this field is evolving at the speed of light and full of magic, we turned to one of our top PPC experts – Evaldas. Here he shares some tips and tricks on how to use Google Smart Bidding when planning your campaign development.

So what is Google Smart Bidding?

  • First of all, it’s a time saver! Seriously. It allows you to focus on the strategic aspects of your PPC account.
  • And it’s a set of automated bidding strategies using machine learning based on the set objectives. 

In short, Smart Bidding is a tool that helps you to save time and entrust all the bidding to Google machine learning.

Currently, we have 4 Google elements based on machine learning:

  • Smart Bidding solutions, like target CPA, target ROAS, Maximize Conversions. 
  • Then automation-based ad creation, for instance, responsive search ads. 
  • The use of a data-driven attribution model instead of the standard Last Click attribute.
  • Automated targeting – creating campaigns like Dynamic Search ads and Smart Shopping.

What are the types of bidding methods?

  • Manual bidding. Google native manual CPC.
  • Rule-based bidding. Google Ads rule and script-based bidding.
  • 3rd party platforms automated bidding. 
  • Auction time bidding, or real-time bidding – Smart Bidding.

Each of these methods has its pros and cons but only Smart Bidding allows you to adjust the most suitable method based on thousands of different signals. Impressive, huh?

Ok, but why is manual bidding such a challenge that we need Smart Bidding?

  • Well, the real problem here is that manual bidding consumes a lot of time. 
  • Incorrectly set bids have a negative impact on the campaign’s performance. 
  • Finally, it’s hard to determine the right MAX CPC bid that would be ideal for every auction. 

How Smart Bidding works?

Google AI uses signals that are available with manual bidding and combines them with signals that are exclusively accessible for Smart Bidding. Then it sets the ideal max. CPC bid that is ideal for a particular auction. Of course, other signals like the historical conversion rate or current tCPA settings are also taken into consideration.

Smart Bidding Strategies 

Basically, we have 4 Smart Bidding strategies that are fully automated and based on conversions and ROI.

Target CPA

  • It allows you to instruct Google and generate conversions for the CPA you specify. 
  • Ideal for e-commerce and lead generation campaigns. 
  • Requires at least 15 conversions over the last 30 days to activate.
  • Setup at a campaign or portfolio strategy level. 

Target ROAS

  • Based on conversion value and ROI.
  • Also, ideal for e-commerce campaigns.
  • Requires at least 50 conversions over the last 30 days for a maximum result.
  • Setup at a campaign or portfolio strategy level.

Maximize Conversions 

  • This one allows you to maximize conversion volumes.
  • Ideal for e-commerce, lead generation campaigns.
  • It doesn’t require historical conversion data for activation.
  • Setup at a campaign or portfolio strategy level. 

Maximize Conversion Value

  • Well, that’s a fairly new method.
  • Again, ideal for e-commerce campaigns.
  • It doesn’t require historical conversion data for activation.
  • Setup at a campaign level only.

All of these strategies are not necessarily suitable for all businesses. However, it’s safe to claim that one of the most popular strategies is Target CPA. 

There’re also other strategies that don’t aim for conversion:

Enhanced CPC 

  • This is a semi-automated Smart Bidding strategy.

Target Impression Share and Maximize Clicks

  • These are not conversion and ROI driven bidding strategies.

Smart Bidding Action Plan 

So, let’s arrange some steps on how to prepare your campaigns for Smart Bidding.

  • First of all, prepare your campaigns for the transition.
  • Implement a new bidding strategy. 
  • Eventually, access and evaluate performance.

Firstly, you should identify campaigns that can be implemented with Smart Bidding. This information usually can be found in the Recommendation section, Google Ads UI. The next steps would be simplifying your account structure in order to aggregate as much conversion data as you need for machine learning. Now we create responsive search ads and add audiences since audience data is used as one of the exclusive signals. Let’s switch to data-driven attribution (or other not last click data model). Another important step is to make sure that conversion tracking works properly. Choose the right bidding strategy and leave the campaigns running for 2-3 weeks to settle down with a new configuration.

Ok, so after 2-3 weeks of running the campaign with the new parameters once you have sufficient conversion volume, it is possible to switch the campaigns to Smart Bidding. Do it at campaign or portfolio bid strategy level. Another crucial aspect is to set realistic target CPAs and ROAS bids. They should be based on the last 4 weeks of campaign performance results. Here you might consider using device modifiers, if, say, your mobile isn’t converting so well. When using Portfolio Strategy, better set a max CPC limit, especially, if it’s usually very high. Of course, try to avoid any changes to the campaign during the training period of the next 1-2 weeks.

It’s important not to jump to any conclusions while the campaigns are still in the learning period. When analyzing campaign performance, it’s important to look at conversion reporting delays. Again, you shouldn’t focus too much on CPC or impression share metrics since your target is CPA or conversion volume. Don’t panic if you notice short-term performance variations, as this is quite common. Also, you shouldn’t analyze very short time frames but look at 2-week, monthly averages.

Smart Bidding Strategy Setup Examples

Let’s go through some examples of implementing a Smart Bidding strategy.

Example 1 – Setup at a Campaign Level

Here you can examine the Smart Bidding strategy performed at the individual campaign level. (Campaigns with relatively high conversions were selected.) As we can see at the campaign level, tCPA was determined based on ad group average CPAs.

Example 2 – Evaluating Bid Strategy Results

In this example, we show how we evaluate Smart Bidding results.

Suppose, we have a campaign that has been assigned campaign-level target CPA $285 and ad-group-level, ad group A $300, ad group B $270.

And even though the ad group’s results were not exactly as previously set, the average CPA for the campaign was close to the determined CPA.

Example 3 – Setup at a Portfolio Bidding Strategy Level

Here’s an example of how Smart Bidding was implemented using the portfolio strategy. 

In this case, the portfolio strategy is implemented for similar campaigns with low conversion rates and similar CPA.

Based on the ad group average CPAs, the target CPA for the entire portfolio strategy was set, which is $ 112 in this case. It’s important to mention that using the portfolio strategy method all campaigns within that strategy will share conversion data. So, if one ad group or campaign doesn’t work as well, Google will try to lower the CPA wherever it sees possible in order to reach your portfolio average. 

Tips and Tricks

  • Make sure your campaigns are not limited by budget (when running on tCPA or tROAS).
  • Avoid too frequent modifications to campaigns as this will confuse the Smart Bidding.
  • Search query negative keyword analysis should be at the top of your priority list since a simplified structure will result in more search terms.
  • Give a reset to Smart Bidding if it stops working, then switch it back after 2-3 weeks.

Smart Bidding Essential Tools

Quite recently Google has released some pretty good tools for Smart Bidding optimization.

Seasonality Adjustments

It’s a great tool informing your Smart Bidding about expected changes to conversion rates. Particularly suitable for short-term events, such as Black Friday or Cyber Monday sales.

Performance Planner 

This tool allows you to forecast and see the optimal spend to meet your CPA and conversions goals. Great for planning conversions and budgets based on the current conversion rate situation.