Conversion Optimization | E-Commerce | Google Ads | Online Marketing

Smart Bidding in Google Ads

The term “smart” is used frequently to describe technology and has become a part of everyday digital lexicon. In everyday life, we use smartphones, smartwatches, and some people even have a smart fridge. For digital marketers, we can also add smart campaigns and smart bidding to that list. However, it is not always obvious what makes things “smart”. In this article, we will take a closer look what makes Google Ads Smart Bidding “smart” and decode some concepts for you.

Smart Bidding Uses Machine Learning

Smart Bidding refers to an automated bid strategy that use machine learning to set the CPC bid in each auction. The auction is the process that determines which ads get displayed in which position on the search results page after every search query is submitted in Google. Machine learning processes huge amounts of data to decide which auction could bring the greatest return, based on processes that have been observed or tested in the past. Similar to a human making an educated decision, but with an immense amount of information and in far less time.

Smart Bidding Strategies Focus on Profitability

The ultimate goal of Smart Bidding is to generate revenue or leads. This can be pursued by following two Smart Bidding Strategies; either maximize conversions and leads or to increase revenue through conversion value. When setting up a campaign in Google Ads, you will select your campaign objective and the bid strategy that best applies to the goal. This could be:

  • Target Cost Per Acquisition (CPA) for generating leads at a consistent price
  • Target Return On Ad Spend (ROAS) to generate a constant return from your advertising investment
  • Maximize Conversions to get as many leads or sales as possible
  • Maximize Conversion Value to generate the most ‘valuable’ conversions possible by focussing the optimization on high value products or high quality leads.

If you need support setting up your Online Marketing Strategy in Google Ads, our Google Ads specialists at Advance Metrics are happy to consult and assist you.

Smart Bidding is a Sustainable Targeting Solution 

Smart Bidding uses contextual signals, which places ads across apps and the web based on matching the content. Contextual targeting uses keywords or topics in order to show ads on relevant websites and does not rely on cross-site tracking, cookies, nor browsing behaviour of users. The content of a potential placement, like a website or app, is evaluated on multiple criteria including context, safety, and suitability. This ensures that your ads will only display in an appropriate environment. As privacy restrictions evolve, this is a sustainable solution that will not be as impacted by data restriction requirements.
Smart Bidding uses further signals to increase the performance of your campaigns such as: the location of a user, the weekday, and time of day that statistically converts best or ad characteristics like size or type. In comparison to contextual signals, these signals use cookies and browsing behaviour of users. By creating clear data-privacy terms and openly sharing these with users, advertisers can take steps to gain trust and invest in sustainable customer relationships.

Ready for Smart Bidding?

To advertise with Smart Bidding, you will need your conversion tracking to be set up on your website and enabled in Google Ads. The Google Ads consultants at Advance Metrics can assist you in creating the optimal account environment for smart Google Ads campaigns. Furthermore, it is important to fully comply with data protection requirements of your country and those countries that you advertise in. Every advertiser is responsible to be familiar with the regulations in the countries they target. As this can be a daunting topic and is subject to regular changes, the Digital Compliance specialists at Advance Metrics will be happy to consult you. We hope this information has encouraged you to start a campaign on Google Ads using Smart Bidding.

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