Smart Bidding: The pros and cons of automated bidding in Google Ads

What exactly is Smart Bidding?

Smart Bidding is a set of automated bid strategies in Google Ads that use machine learning to maximise conversions. Google looks at historical search behaviour and contextual data to predict the likelihood of a conversion and then increases your bids when a conversion appears more likely.

This contextual data can include location, time of day, user devices, your ad’s historical performance and a wide range of other factors, depending on each query.

There are five different Smart Bidding strategies that each prioritise a specific conversion goal:

• Maximise Conversions: Optimises bids to maximise conversions from your budget.
• Target ROAS: Optimises your bids to achieve your target return on ad spend (ROAS) from your budget.
• Target CPA: Optimises bids to maintain your target cost-per-action (CPA) from your budget - in other words, the amount you pay for each conversion.
• Target impression share: Sets bids to show your ad at the top of the page as often as possible.
• Enhanced CPC: Optimises your maximum cost-per-click (CPC) to maximise conversions.

Those are five powerful optimisation strategies and Smart Bidding takes care of all the work for you.

It’s not all good news, though.

The pros and cons of Smart Bidding

As with anything in PPC, there’s no perfect strategy for every situation and it’s important to understand the pros and cons of Smart Bidding.

Smart Bidding pros:

• Saves time
• Allows you to “set and forget” campaigns
• Google has a lot more data to work with than you do
• Opens Google Ads to smaller businesses

Smart Bidding cons:

• Google doesn’t know your business
• You have no visibility or control over the data being used
• Google’s broad data might not reflect your target audience
• It takes time for Google to “learn” your campaigns
• Limited campaign goals
• Reduced budget control

Essentially, it all comes down to convenience. Smart Bidding takes care of bid optimisation for you and this means you can “set and forget” campaigns. Google also has far more data to work with than any one advertiser but this can be problematic in some ways, too.

Firstly, Google’s broad data doesn’t necessarily reflect your target audiences, which are unique from the average user. More importantly, Smart Bidding gives you no visibility or control over the data being used, which means you’ll never truly maximise performance.

However, Smart Bidding might be able to achieve “good enough” results quickly and this is important if Google wants more small businesses to start using its advertising platform. It’s no coincidence that we’re seeing a lot of automated Google Ads features being introduced for smaller businesses.

Should I use Smart Bidding in Google Ads?

The most obvious use case for Smart Bidding is a small business that wants to start using Google Ads without the technical knowledge to optimise bids or the means to hire an agency.

That said, there are genuine campaign scenarios where Smart Bidding can be useful:

• Brand awareness: Total impression share can make your brand, new products and other offers more visible.
• Increase traffic: Maximise for clicks and you can generate more traffic to work with.
• Increase conversions: Maximise for conversions and your bids will adapt accordingly.

Smart Bidding offers a quick answer to some common PPC challenges but the impact is generally short-lived. To truly maximise the performance of your campaigns, you need to take control of your own bids and the data being used to optimise them.

Instead of relying on Google, you can implement your own algorithms, tailored to your campaign goals and target audiences. This is the approach we take with our Google Ads clients, allowing us to optimise for the specific needs of our customers.

For example, you can automate bids to constantly adapt for the most profitable hours, days or months of the year if you see significant changes in sales. Or, instead of simply optimising bids for conversions you can adapt them to increase the percentage of conversions that actually turn into paying customers, even if this results in lower conversion rates overall.

You decide what your bidding goals are, control what data is being used and maintain visibility to ensure your goals are being met.

If you’d like to talk to us about how we can help with your bidding strategies, don’t hesitate to get in touch.