Smart Bidding

Table of Contents

Smart Bidding: Google’s smart bidding strategies. What are the best practices for campaigns with automated auctions?

  • Smart Bidding: How does it work?
  • Why switch to Smart Bidding?
  • Smart Bidding: ROAS objective or CPA objective?
  • What is the goal for smart bidding strategies?
  • ROI Bidding Strategy: Is It For You?
  • Smart Bidding: How to optimize automation?

On Google, 15% of queries typed by Internet users are new.

That is to say that this is the first time that someone has carried out this precise research.

Requests are becoming more complex and lengthening.

This is all the more true for Shopping: for example, 60% of searches for purchase have upper funnel formulations.

That is to say broad queries, sometimes generic or with more keywords.

27% of Internet users use voice search with an even richer and more complex formulation of the query.

Smart Bidding
Smart Bidding

So how, as an advertiser, do you target these requests?

Google offers a solution to reach these intentions: automatic bidding strategies and intelligent bidding strategies (Smart Bidding in VO).

Smart Bidding: How does it work?

Principle of automatic Google Ads auctions

Smart bidding analyzes a lot of information and will process weak signals in a few milliseconds (months of 100 ms to be precise.

Of the more than 15,000 advertisers who use SEISO to optimize their Google Ads campaigns, 68.3% of them use automated bidding strategies.

Smart Bidding
Smart Bidding

These Google products, therefore, have a good adoption rate and we can even speak of a strong trend in the SEM universe.

Google Ads Smart Bidding Criteria

The main factors that enter into the calculation of the algorithm for automating the delivery of your ads in Smart Biding are as follows:

  • The device used;
  • The time of day;
  • The geographic area;
  • The remarketing list;
  • Socio / Demo Profile Language ;
  • The OS (operating system), etc.
Smart Bidding
Smart Bidding

The key to success with automation

To succeed in your Smart Bidding strategies, it is essential to start well:

The KPI that you choose to drive the auction strategy, as well as the Data that you will share with the algorithm so that it learns and improves its distribution, are the 2 key success factors.

Barometer of automated bidding strategies.

We carried out a study on more than 15,000 advertisers with SEISO.

Here is what we see about the performance observed on smart auctions: For Google Ads accounts that spend less on advertising budget, Smart Bidding’s onsite conversion rates are 4X better than manual campaigns.

However, the performance in terms of ROI or CPA is the most striking on the most important advertisers.

We can guess behind the question of the maturity of advertisers by the level of expenditure …

Google and Facebook for the self-employed

The digital transformation of businesses is here.

The COVID episode has further accelerated the trend in the self-employed and SMEs / VSEs niche.

Automation is a solution for the Google or Facebook agencies to penetrate this new market of advertisers with low digital maturity.

In theory, automated campaigns and automated bidding strategies allow anyone to get started with digital advertising.

In fact, we have a paradox that appears: automation is designed above all for small or medium businesses and yet it is for large accounts that it works best

It makes sense, in fact, to get the most out of smart bidding strategies you need to:

  • Have a nickel tracking
  • Choose your campaign objective KPI intelligently
  • Feed the algorithm with a maximum of well-structured data

And that is more within the reach of mature and structured marketing teams!

Conclusion: automation is something potentially interesting but you have to know how to make the most of it!

Read more: What are the differences between ROI, ROAS, and target ROAS?

Why switch to Smart Bidding?

It is a business decision and strategy.

Overall, we can see good results with certain players, all of whom have the particularity of having optimized e-commerce tracking.

  • + 20% conversions at constant CPA with a “Maximize conversions” strategy
  • + 35% in turnover with target ROAS or conversion value maximization strategies.

To help you, follow these decision trees.

Decision: Should you switch to automatic strategies?

Make sure you already have the correct tracking.

If not, stop there.

Do you value your conversions? Choose a strategy at tROAS.

Otherwise => Do you have a CPA goal? tCPA Otherwise Maximize conversions.

Do you have a target ROAS goal? So choose a tROAS type strategy

Otherwise, => Opt for a “Maximize conversion value” strategy

The different objectives of automated campaigns

The different types of automatic bidding strategies classified by the advertiser’s business objective according to official Google recommendations:

Objective: Increase the number of visits to the site

Bidding strategy: The Maximize Clicks bidding strategy automatically sets your bids so that you get as many clicks as possible within your budget.
It is available as a standard strategy in a single campaign or as an auction portfolio strategy for multiple campaigns.
Learn more about the “Maximize clicks” strategy Learn more about the “Maximize clicks for Shopping campaigns” strategy.

Objective: Improve visibility

Bidding strategy: The Target Impression Rate bidding strategy automatically sets bids to show your ad in absolute first position, top of the page, or anywhere on the Google search results page.
It is only available on the Search Network, as a standard strategy in a single campaign or as a portfolio auction strategy for multiple campaigns.
Learn more about target impressions.

Objective: Get more conversions with your target CPA

Bidding strategy: The target CPA bidding strategy automatically sets your Search or Display bids to drive as many conversions as possible for the target cost per action (CPA) you specify. The cost of some conversions may be higher or lower than your target amount.
This bidding strategy is available as a standard strategy in a single campaign or as a portfolio bidding strategy for multiple campaigns and ad groups.
Learn more about the target CPA

Objective: Achieve a return on ad spend (ROAS) goal when you assign a different value to each conversion

Bidding strategy: The Target ROAS strategy automatically sets bids to get as many conversions as possible with the return on ad spend goal you set. The ROAS of some conversions may be higher or lower than your goal.

It is available as an auction portfolio strategy and a standard strategy for each campaign.

Find out more about the “target ROAS” strategy

Learn more about the “Target ROAS for Shopping campaigns” strategy

Objective: Get more conversions using your full budget

Bidding strategy: The Maximize Conversions bid strategy automatically sets bids so that your campaign generates as many conversions as possible while using your full budget.
Learn more about the “Maximize Conversions” strategy

Objective: Increase conversion value by leveraging your entire budget

Bidding strategy: The Maximize Conversion Value strategy automatically sets bids so that your campaign achieves the highest conversion value while using your full budget.

Smart Bidding: ROAS objective or CPA objective?

Here are some decision trees to help you position yourself.

Google Ads official recommendation:

Automatic bidding strategy: Target ROAS

When to use this bidding strategy?

You are an e-merchant with fairly uniform margin rates in your catalog, you have a profitability objective to maintain.

Can I launch a campaign directly in target ROAS strategy?

Advertisers must have a minimum of 15 conversions in 30 days to be able to opt for a target ROAS.

How do I choose my ROAS?

It is advisable to implement the target ROAS on the search according to the historical data of the campaign or the account (this is also how a target ROAS is recommended by the platform).

To start effectively, your target ROAS should be close to the current ROAS and you can adjust it for a more ambitious target if necessary when performance reaches the initial target.

What happens if I increase the Target ROAS?

Increasing the target ROAS further forces the algorithm to seek conversions with high profitability.

What happens if I decrease the Target ROAS?

Lowering the target ROAS gives the algorithm the opportunity to find conversions at a lower value compared to the cost spent and thus to come and seek more conversions. Thus, lowering the target ROAS makes it possible to increase the volume of conversions generated by the campaign.

Can I set a target margin rather than turnover?

You cannot integrate the gross margin in the campaign setup. However, you have the possibility to add a custom column in order to have visibility on the gross margin generated.

ROAS Target: Points of attention

What are the minimums required to obtain satisfactory results in target ROAS?

In order to obtain results, we recommend that you use a ROAS strategy while respecting the following prerequisites:

● Search: ≥ 15 conversions / month

● Shopping: 20 conversions / 45 days

● Display: ≥ 15 conversions / month

Auto Bid Strategy: Maximize Conversion Value

When to use this bidding strategy?

You have a budget, you are conquering the e-commerce market

Auto bid strategy: Target CPA

The tCPA (or Target CPA / Target CPA) is your cost per conversion.

Target CPA: Prerequisites

Track conversions on Google Ads.

Target CPA: When to use this auction strategy?

You are a single-product or service salesperson, You have a profitability objective to maintain.

Can we start directly in strategy at the target CPA?

Yes. No minimum conversion is required at launch. If the ad group does not have historical conversion data, the target CPA will use the data on queries at the account level and in similar auctions.

What happens if I increase the Target CPA?

Increasing the target CPA gives the algorithm the opportunity to spend more to come and seek conversions. Thus increasing the target CPA makes it possible to increase the volume of conversions generated by the campaign.

What happens if I decrease the Target CPA?

Lowering the target CPA further forces the algorithm to seek low-cost conversions. Be careful not to lower the target CPA unrealistically because this will cut campaign volumes.

Target CPA: Points of attention

Don’t change your goal too drastically as this may disrupt advertising delivery. We recommend operating in steps of +/- 15% per week

Auto Bid Strategy: Maximize Conversions

When to use this bidding strategy?

You have the budget, you are conquering the market and you have not configured unnecessary or too granular micro conversions.

Will it increase my CPC?

Certainly yes.

Since the goal of Max Conversions is to drive as many conversions as possible within your campaign’s budget, it automatically optimizes bids to get you relevant clicks and more conversions when possible.

Oftentimes, this means that the strategy will drive up the bids on those cases where the detected intent level is higher, but you will only pay what is needed to earn the most conversions within your budget.

The Maximize Conversions strategy increases CPC very sharply only if the campaign in question does not have sufficient click volume.

The goal of Maximize Conversions is to use the entire campaign budget. If the campaign has only a few clicks initially, mathematically, the cost per click will increase so that the algo manages to exhaust the daily budget …

What is the difference between a target CPA strategy but a high target CPA?

When you determine a limit to a tCPA or tROAS strategy, you introduce an additional condition to the algorithm.

Machine learning will potentially require more budget to test and collect data.

In a campaign limited by the budget, the algorithm will not have enough headroom to conduct tests in order to meet the determined restriction.

In this case, “Maximize Conversions” will be the most effective strategy because it will use the budget in order to maximize a marketing objective while minimizing the conditions to be met.

Conclusion on smart auction goals

The three strategies are each relevant in different cases:

● Maximize conversions: report a large conversion volume

● Target CPA: report as many conversions as possible at a stable price

● Target ROAS: ratio as many conversions as possible to a stable ROI.

Other smart bidding strategies

Printing rate

This automatic bidding strategy improves the visibility of your brand by seeking to distribute as much as possible and on the first position in the ranking of the search engine.

Maximize clicks

This automatic bidding strategy allows you to increase the number of visits to your website by promoting the sites where you will get good CTRs and wide distribution.

Maximize conversions

This automated bidding strategy will automatically use up all the available budget while trying to generate as many conversions as possible (be careful with intermediate conversions that would have too little value for you!)

Maximize conversion value

E-commerce oriented, this automated auction strategy will automatically use up all the available budget to generate a maximum of turnover… But regardless of any notion of ROI!

Importance of Micro conversions in Smart Bidding

The intelligence of Google’s so-called smart strategies is based on the amount of data available for profiling and choices.

Concretely, this means that more granularity in the events of your customer journey that you report in your tracking will help the algorithms to understand the behavior of visitors and adjust their targeting accordingly.

Examples of micro-conversions for SaaS software like SEISO: Contact form Registration (Ex: Launching a Google Ads account audit) Visit Cart Page Premium Version Premium registration These intermediate conversions allow Google to measure the nuances of engagement of your traffic and therefore to seek the audiences most likely to engage strongly.

Examples of micro-conversions for SaaS software like SEISO :

  • Contact form
  • Registration (Ex: Launching a Google Ads account audit)
  • Visit Cart Page Premium Version
  • Premium registration

These intermediate conversions allow Google to measure the nuances of engagement of your traffic and therefore to seek the audiences most likely to engage strongly.

How to promote the intermediate stages?

Valuing intermediate conversions is a good practice that I strongly encourage.

Indeed, this valuation will allow you to weigh each commitment signal against the others.

To fix the valuation then we will base ourselves on the existing.

There are several ways to go about it.

This encourages Google’s algorithm to seek audiences that will engage more.

Target ROI Bidding Strategy: Is It For You?

Special case: New campaign

Do you want to automate a new Adwords campaign? Directly prioritize a revenue maximization goal if you can.

In the conquest phase or need of quick learning, you can prime the pump with a “Maximize conversions” strategy.

Special case: Converting an existing manual campaign

Be careful, if this campaign is already profitable and is generating significant volume in your account, think twice and start with isolated tests.

If the volume is sufficient, then seek directly set a target ROAS Target bid.

Special case: Converting an existing target CPA campaign

The idea is to move from controlling the acquisition cost to controlling profitability.

Very easy in e-commerce, for actors who lead it is a little more complicated.

The Target ROAS strategy is a good SMart Bidding option if you have enough conversion volume each month. Otherwise either you force the algorithm with maximization of conversions / CA, or you optimize the campaign to gain visibility without spending more.

Special case: Converting an existing “Maximize conversions” campaign

If the results of your campaign are satisfactory, then you can try to get more volume of conversions with a strategy of maximizing them.

On the other hand, if you have little budgetary room for maneuver or a fair amount of profitability, choose a strategy with target ROAS (keeping your margin rates in mind).

The Risks Of Smart Bidding… And How To Avoid Them

Transforming manual campaigns that work into Smart Bidding… And crashing

To avoid a drop in turnover and performance at the launch of the new campaign, you must have set the right target objective value.

Tip: The goal should not be more ambitious than the result over your last 30 days.

For example :

  • the target ROAS: set a target ROAS less than or equal to the existing one
  • the target CPA: set a target CPA greater than or equal to the existing one

Questions: Smart Bidding Strategies

Why consider an automatic bidding strategy to “maximize conversions when campaigns are on a tight budget?

A campaign to maximize conversions will attempt to spend the entire daily budget in order to get the highest volume of conversions possible within that budget.

If the campaign is “limited by budget”, it means that the daily budget is already spent in full.

Thus, switching to maximizing conversions will not result in a sharp increase in campaign expenses since the campaign was already using its entire budget.

Is it really recommended for a campaign already in place with very low volumes?

The Maximize Conversions or Target CPA automatic bid strategy has no volume prerequisites. However, if you have less than 10 clicks per day, Maximize Conversions may lead to CPC inflation, due to the lack of traffic which will limit the algorithm in finding your marketing goal.

The structure of the campaigns is important so that the algorithm has enough data to function. Consider grouping campaigns by the objective to increase volumes and use advanced strategies in your account structure.

If you have low conversion volumes, we recommend that you pretend you have consolidated all low volume campaigns into one.

In the case of an account where several conversions are tracked, can we configure the campaign to maximize conversions on one type of conversion?

Smart bidding strategies (including Target CPA and Target ROAS bid strategies) only consider conversions recorded in the “Conversions” column.

So pay attention to the way you configure the micro conversions!

Can we cap the CPC for security?

No.

Smart campaigns automatically adjust bids to optimize your performance against goals. In the case of maximizing conversions, the sole objective of the strategy is conversion volume.

The CPC is therefore not a criterion of success or failure of the strategy according to the Google algorithm.

Can I refine the strategy with bid adjustments?

Yes, but not really.

Not with all the bid adjustments traditionally available in Google Ads in Expert (Manual) mode anyway.

By Device, for example, we can only exclude devices by an adjustment to -100%. Not possible to be thinner.

For other bidding adjustments (geo, release schedule, etc.): No, it is not possible to make manual bidding adjustments to an automatic bidding strategy.

How does the algorithm behave during special periods?

In theory, Google Ads smart bidding strategies already handle seasonal events.

Seasonality adjustments are expected to accommodate short events (between 1 and 7 days). They may be less effective for longer periods (more than 14 days at a time).

Seasonality adjustments are currently available for Shopping, Display, and Search campaigns.

However, we recommend that you consider disengaging these campaigns during particularly good and strategic periods such as sales, Black Friday, or even the end of year celebrations.

On this point, we have already shared the details of our recommendations and optimization strategies in our article on Smart Shopping.

What signals does the target ROAS strategy take into account?

Changes have been made to the target ROAS to improve its performance. The most important change is the prediction of value at the time of auction – using any unique signals to predict how much value conversion is likely to deliver in real-time and bid accordingly.

Which Budget to choose?

In terms of budgets, it is obviously imperative that the budget be greater than the CPA, or even much greater simply so that the algorithm disseminates your advertisements as little as possible.

When to choose Target CPA over Target ROAS?

If you have a business objective of cost per action (CPA) or cost per lead (CPL), then the target CPA is a priori more relevant …

If you have more volatility in your trade: you are willing to spend more on conversions with higher values ​​and less on conversions with lower values. We recommend that you then use Target ROAS as a smart bidding strategy.

If you still want to manage your business with CPA, and you have very different conversions in target CPA terms, then we recommend putting them in separate campaigns (parameters> conversions> conversions at the campaign level).

So they can have their own target CPA and budget.

It is possible to prioritize ad groups by assigning them different target CPAs, but using this strategy too frequently is not recommended.

Note that it is necessary to assign a value to a conversion to use the target ROAS, think about it if you do not do e-commerce and value the engagement of your users according to it!

In other words, it is not possible to weigh the different conversions of the same type or different types of conversion other than by the conversion value.

Smart Bidding: How to optimize automation?

Smart Bidding
Smart Bidding

Optimize target ROAS or CPA campaigns

What is the best practice to set up a target ROAS if the desired ROAS on the products is very different?

So if the ROAS or CPA is too heterogeneous, we recommend running different campaigns (for example high-margin product campaign, recruiting product campaign, expensive and low-margin product campaign, etc.)

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