Smart Bidding: 5+ Ways To Leverage Machine Learning

Chris Gonzalez
Chris Gonzalez
Senior Account Manager
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If you’re up to date with the latest Google trends then you’ve definitely heard of Smart Bidding before.

But if you’re a laymen search marketer or just getting started in the PPC world, the words “automated” and “bidding” can sound scary in the same sentence. And the idea of letting Google take over for your campaign management can sometimes feel like leaving your baby with the babysitter for the first time.

baby riding a rumba
But it just might be time to let go, mama’s boy - image source

In this post, I’ll walk you through everything you need to know about Google Smart Bidding to make sure you can leave your precious campaigns in Google’s care without losing any sleep. So, let’s get started and define what exactly “Smart Bidding” means to begin with.

So What Is Smart Bidding Anyways?

Smart Bidding is a collection of different automated bidding strategies that use machine learning in your Google Ads account to help advertisers reach their goals.

Manual CPC has been one of the most common Google Ads optimization tactics for many advertisers in the past. But with Google’s Smart Bidding options, your account can reach new heights you never even knew were possible.

You can find the different types of smart bidding options in your campaign bid settings like in the screenshot below. Each prioritizes a different metric and will optimize your campaign to perform best in that category.

So, it’s important you steer clear of vanity metrics and make sure your bidding strategy reflects the right priorities in your campaigns.

Screen Shot 2020 02 23 at 11.51.25 AM
When you automate you leave the prioritization to Google...

In this article, I will walk you through the various types of Google Ads Smart Bidding strategies and how each bidding strategy can align with your marketing goals.

When To Use Smart Bidding VS. Manual CPC

When deciding if you should use smart bidding or manual CPC there are a few factors to consider. 

There are tons of articles explaining the pros and cons of each and you're probably still trying to figure out the best way to use it.

But, regardless of whose advice you choose to trust, you should evaluate the following aspects in your account before making any decisions on a bidding strategy:

  • Do you have historical data in your account?
  • Is Conversion Value data being properly imported into your account?
  • Is conversion tracking set up correctly?

If you’re able to check off “all the above” then you’re ready to explore Google’s Smart Bidding options. And if you’re still hesitant to try Smart Bidding because you don’t want to give Google control over your bids, I assure you that you can still have control with the targets you choose and the max CPC bid limit you set.

The reason max CPC and other parameters like it are so invaluable to a PPC manager’s sense of security is because they’re a hard cutoff when a campaign is burning budget out of control.

Without the ability to set max CPC’s, certain campaigns can theoretically run off the rails without your control and saving your budget ends up becoming a game of reflexes.

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And not the fun kind of surprise… - image source

There are endless opportunities in the Google Ads platform, so why not utilize Google’s automation to give you more time to focus on other strategies like:

  1. Creating more Single Keywords Ad Groups or, even better, start Keyword Tapering
  2. Focusing on your Gold Pan Shopping Campaigns
  3. Understanding your PPC Funnel better
  4. Optimizing your ad copy based on PPC traffic temperature 
  5. Engaging leftover traffic and leads with the Bottom Feeding Approach

But don’t take my word for it. Take a look for yourselves at some of our more successful campaigns that we’ve been able to optimize with the help of Smart Bidding.

Leveraging machine learning not only helped us to speed up the technical optimization of the accounts below; it also helped us clear up time for more aggressive optimization tactics. And these are the ones that ended up driving the biggest leaps forward in performance (and PPC mastery) for us.

Blog screen shot
Here’s some results from a lead gen client of ours after switching from Manual to Target CPA

And look - a 40.81% decrease in Cost/Conv and 107.32% boost in Conversion Rate. Not bad at all.

And again, if something from a specific industry doesn’t quite impress you enough, we have some Smart Bidding examples from other industries as well. The point is that Google is adaptive to any and all audiences and is working to always improve its algorithms.

Screen Shot 2020 03 18 at 5.09.23 PM
Maybe it’s time you start keeping up with them...

Different Types Of Smart Bidding

Now, let’s dive in. For starters, there are 5 different Smart Bidding options available in your Google Ads account:

  • Target CPA
  • Target ROAS
  • Maximize Conversions
  • Maximize Clicks
  • Target Impressions Share

Before taking a deep dive into the five different Smart Bidding Strategies, it’s important to know that each option is designed for different PPC goals. No matter what type of business you advertise for, there is a Smart Bidding option for your account that can help prioritize your specific goals (micro or macro).

1. Target CPA

Target CPA - as the name implies - allows you to set a target for the Cost Per Acquisition you aim to achieve. You can do this in the campaign settings fairly easily. But keep in mind that when choosing Target CPA Google will automatically set bids using historical conversion data from your account.

It’s extremely important to set a realistic CPA goal so that there are no constraints on the amount of conversions your campaign will generate. The last thing you want is your poor conversion track record to be costing you more conversions in the present.”

For example, let’s say you have a campaign that has a Cost/Conv. of $32 over the last 30 days. If you decide to switch to tCPA (Target CPA) and you set your target to $2 then you’re most likely going to see this:

Screen Shot 2020 03 05 at 9.24.42 PM
No one wants to see this...

2. Target ROAS

Compared to the other smart bidding options available, Target ROAS specifically targets revenue (the main reason you’re using Google Ads to begin with). Target Return On Ad Spend uses the historical conversion values (revenue) in your account to automatically set bids.

However, in order to use this smart bidding strategy you must have a conversion value set for your conversion so Google has data to work with.

Now, you might be thinking:

“This bid strategy means nothing for me if I don't have conversion values”

This is most often the case for advertisers that have a lead generation business. If you’re a lead gen business then you most likely have been optimizing for lower CPAs and increasing lead volume. BUT what if you had offline conversion tracking set up to import the revenue from your CRM?

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Ooooooh well that’s something to consider - image source

Like I mentioned earlier, your account can reach new heights like never before. Now with revenue being imported you can set a target ROAS and start optimizing for return on ad spend for your lead gen account instead of cost per lead.

3. Maximize Conversions

Maximize Conversions is designed to get as many conversions as possible within your daily budget within Google Ads. Simple as that. Now, some may say that Okham’s Razor would suggest that this is the best Smart Bidding option out there. I mean, who doesn’t want to “maximize conversions?”

But it’s a bit more complicated than that. Over-prioritizing the volume of conversions can sometimes leave you open to the spiking CPAs (cost per acquisition).

So, why would you use maximize conversion over Target CPA? If you’re more focused on the volume of conversions over CPA goals or achieving a specific ROAS, then using maximize conversions may be the best strategy for you. This might be the case if your campaigns are limited by budget or your industry is extremely competitive.

4. Maximize Clicks

This strategy is exactly what it sounds like; Google automatically sets bids to get as many clicks as possible within your budget. This isn’t a conversion or revenue focused strategy but instead focuses on driving as much volume to your ad and landing page as possible.

In my opinion, there are two scenarios why an advertiser would be using Maximize Clicks Smart Bidding:

  1. You are extremely confident in your ad, landing page, and/or offer.
  2. You want to gather as much data as possible for your campaigns and eventually will switch to a conversion or revenue focused bidding strategy.

Certain PPC strategies, like the Bottom Feeding Approach or Keyword Tapering (courtesy of yours truly here at KlientBoost), rely on starting off with broad level campaigns such as these to collect data on which search terms are worth targeting more aggressively.

But you can read those posts to learn more about them ;)

5. Target Search Impression Share

Similar to Maximizing Clicks, this bidding strategy isn’t revenue or conversion focused. This Smart Bidding strategy is focused on increasing the share of your search ad impressions as a whole. And depending on if you’re looking to generate leads/sales or actually generate initial demand, this may be just the thing for you.

With Target Impression Share you can set the target for the three options below:

Screen Shot 2020 02 27 at 5.54.57 PM
Depending on how picky you are and how much you have to spend...

Using this bidding strategy really depends on the objectives you have for your campaign. If you want to ensure that your ad shows for lets say your branded campaign, then this may be the strategy for you but it is not designed to increase conversions volume or hit a target CPA.

The Secret Weapon: Portfolio Bidding Strategy

So far, I’ve walked you through the five different types of bidding strategies in Google Ads. But there is one last thing every advertiser should be aware of: Portfolio Bidding Strategies.

“A portfolio bid strategy allows you to utilize the same strategy across multiple campaigns. And because Smart Bidding strategies use the conversion and revenue data in your account, this only helps the algorithm learn faster by providing even more data from multiple campaigns.”

Of course I wouldn’t drop such a golden nugget in your lap and not teach you how to crack it open. So in the next section we’ll cover how to set up your Portfolio Bidding Strategy.

Setting Up Your Portfolio Bidding Strategy

Let's look at an example of when you would use a Portfolio Bidding Strategy:

Let's say you’re an online college and your Google Ads account has campaigns separated by different types of diploma courses. If each campaign has the same CPA goal then you can use a Portfolio Bidding Strategy to give the algorithm a little boost.

It’s easy to get started by following these steps:

  1. Go to shared library
  2. Go to bidding strategies and create a portfolio bid strategy for the desired smart bidding option (in this case we are focused on CPA).
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3.        Now you can go to your campaigns settings and apply the Portfolio Bidding Strategy:

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Now your campaigns can be bundled with the same CPA goals instead of granulating bidding strategies down to each campaign. This is a no brainer if your campaigns have the same CPA goals, because now your Smart Bidding strategy has more data for the algorithm to learn and give your campaigns that extra edge: ‘experience’.

Takeaways - What’s So Smart About Smart Bidding?

So in the end what exactly makes Smart Bidding so “smart” beyond simple automation?

Well it’s not actually the automation that makes Smart Bidding so smart. It’s the customizable goals and targets for these automated bid strategies that make this such a genius tactic to take advantage of.

If you’re looking to raise the IQ of your paid campaigns (and free up some spare time to raise your own thought leadership IQ while you're at it), Smart Bidding is perfect for you.

As Google and other paid platforms’ algorithms and machine learning capabilities become more and more advanced, “advertising mastery” isn’t going to come from the work in the trenches. It’s going to come from the needle moving wins you give yourself time to brainstorm and develop.

It’s time we all start working smarter not harder, and watch our PPC campaigns do the same.

Chapter 7:
Google Ads Bidding

What You’ll Learn: Learn the optimization routines we use to take poor-performing Google Ads accounts to turn into the envy of your competitors.

Chapter 8:
Google Ads Optimization

What You’ll Learn: Learn the optimization routines we use to take poor-performing Google Ads accounts to turn into the envy of your competitors.

Chapter 9:
Google Ads Tips

What You’ll Learn: Discover the unknown strategies we use to take your Google Ads performance to a whole new level.