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Smart Bidding in Google Ads: An Up-to-Date Guide

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Smart Bidding in Google Ads: An Up-to-Date Guide

Smart Bidding is good. It’s really good, in fact.

If you aren’t already using it, you really should be.

If you are using it, you’re probably still trying to figure out how best to do it. I certainly am.

During the past 12 months since my last post about Smart Bidding, my team has been running countless tests across a range of client accounts, trying to develop a playbook for using this important new addition to the PPC toolkit.

This post is the fruit of those labors. In this article, I will break down the process of implementing Smart Bidding into four steps:

  • Assess the suitability of your account.
  • Select an appropriate Smart Bidding strategy.
  • Establish a testing strategy.
  • Optimize performance.

For each step, I’ll provide a number of key considerations and specific examples from Brainlabs’ own accounts.

This post won’t cover the basics. It is more of an intermediate level guide, for those who have already given Smart Bidding some thought.

Step 1: Assess the Suitability of Your Account

Google has published guidance on this, but I want to add a bit more detail based on our own client experiences.

Below is a list of possible reasons for not setting up a Smart Bidding strategy on your account. This list is not necessarily exhaustive, but should cover the majority of cases.

Too New, Not Enough Data

This depends partly on the bidding strategy you’re planning to use. Google’s advice is “30 conversions in the past 30 days” for Target CPA and “50 conversions in the past 30 days” for Target ROAS.

What about “Maximize Clicks” and “Enhanced CPC”?

Well, even though these are included as two of the four Smart Bidding strategies, they aren’t really in the same league as Target CPA and Target ROAS. So let’s ignore those for now.

Google’s advice provides a useful benchmark. The most important thing is that you feel confident in the reliability of your conversion tracking.

Once you have a method you’re happy with, and a decent volume of conversions, then I’d say you were ready to go.

Conversions Aren’t Segmented

This relates to the above point.

If your account includes different types of conversions, then you’ll need to make sure these conversions are properly segmented before beginning any Smart Bidding strategy.

I hope the reason for that is obvious.

Missing Data in Google Ads

For example, has the client’s revenue data been properly incorporated into Google Ads?

Are there any other key pieces of data which, if absent, will mislead Google’s machine learning?

Branding Is the Main Focus

Some clients will want to optimize for control over their account. Fair enough.

If that’s the number one priority, then perhaps the opportunity costs are worth bearing. But that’s a big perhaps – in many cases, it might still be worth exploring.

Lack of Trust or Bad Results in Previous Tests

Speaking of clients, some of them may just plain not trust Google or new technology, etc.

If you really believe in the value of Smart Bidding (like I do), then it’s part of your job to convince others to try it.

Some people may already have tested it and got some bad results. Keep testing.

To me, Smart Bidding should be the default. It will require a lot of refinement in some cases, but that’s the beauty of Google Ads – so much opportunity for testing and learning.

Unstable Market

Some businesses operate in highly unstable markets, where individual days can affect entire years. In some cases, the volatility will be so much as to discourage ever using Smart Bidding, due to the need for control.

In other cases, it might be wise to wait until things are more predictable, then give it a go.

KPIs Don’t Align With Smart Goals

What KPIs do Smart Bidding cover?

Currently, it’s website traffic (Maximize Clicks), low costs (ECPC), ROAS and, conversions – which, for most advertisers, is probably going to be fine.

There are some exceptions, though.

Andreas Reiffen wrote a great article recently about Smart Bidding, where he finds that customer lifetime value is a difficult KPI to factor into Smart Bidding. Google’s machine learning doesn’t distinguish between new and existing customers.

Some advertisers may have very specific goals, beyond the current scope of Smart Bidding.

Step 2: Select an Appropriate Smart Bidding Strategy

2 Tiers of Smart Bidding

Although Google groups them together, I don’t think Maximize Clicks, Enhanced CPC and Target Impression Share Bidding are the in the same category as Maximize Conversions, Target ROAS, and Target CPA.

Frankly, there are two tiers of Smart Bidding.

My advice: move to the top tier as soon as possible.

Tier 2 = Maximize Clicks, Enhanced CPC and Target Impression Share Bidding

These all provide a specific automated function, which is cool but:

  • It isn’t possible to apply at portfolio-level
  • It doesn’t take into account the full range of auction signals that the Tier 1 Smart Bidding strategies do

Tier 1 = Maximize Conversions, Target ROAS and Target CPA

These are the gold standard of Smart Bidding strategies. Google’s machine learning will look across the whole of your account, and draw upon the exclusive auction signals it has access to.

Portfolio-level optimization is a big deal. Run some tests, and you’ll see that it tends to outperform keyword-level optimization almost every time.

Choose the Strategy & Targets

It should be reasonably easy to link yours or your client’s objectives to one of the Smart Bidding strategies.

Google has a table with the basics, in case you’re very new to all of this.

For example, if you want to “Get more conversions with your target CPA”, then Google suggests using…”Target CPA”. And so on.

The more subtle part is setting the parameters within the specific strategy.

As one of the wisest folks in PPC, Frederick Vallaeys, recently wrote, “automation can’t magically fix your business.”

You need to set targets that are closely related to prior performance and aim for incremental progress.

You’ll also need to choose a single campaign or portfolio level approach. As discussed already, portfolio-level offers the best opportunities for optimization, so aim for that if you can.

Adapt the Existing Account Structure/ Features

SKAG

This is a bit more intricate, and really depends on each individual case.

At Brainlabs, for example, our search accounts normally have a single keyword per ad group structure. This is compatible with Smart Bidding, and I would recommend combining the two so that your ad copy can be optimized.

Audiences

You can pretty much maintain the same audience strategy, but there are a few things to note:

  • If you were using in-market audiences, you need to add them in again.
  • Remarketing lists don’t need to be MECE (Mutually Exclusive, Collectively Exhaustive), which is actually a lot easier!
  • You can’t use bid modifiers anymore.

Step 3: Establish a Testing Strategy

Basically, there are two questions that testing should help you answer:

  • Is Smart Bidding better than the original bidding strategy?
  • How can your Smart Bidding strategy be improved?

Use Drafts & Experiments (For Now)

Drafts and Experiments (D&E) is the fairest way to test in-situ, and it has the advantage of being applied across campaigns.

If you’re generally skimming this article, please pay attention to this next bit:

***The Bid Strategy must be applied to the control campaigns***

This is so that data from control campaigns is carried forward (if it wins).

D&E is the best testing software we have for now.

In due course, theoretically, Google will launch “Multi-Campaign Experiments”, which looks like it’ll be even better for testing Smart Bidding. Some of you might even be trying it out now in Beta mode?

Choose an Approach That Isolates Success

For the best tests, you want about 80+ conversions/ month. This will let you quickly make comparisons between the control and the test group. Less than this, and it will take longer to establish statistically significant results.

Ideally, you want about 3-5 campaigns with a full migration and similar budgets.

A few other things to aim for:

  • Portfolio bidding + shared budgets on small campaigns.
  • Large, stable campaigns (e.g. avoid campaigns with high seasonality).
  • Avoid overlap between Smart and static campaigns.

It isn’t always possible to run such ideal tests, but this is definitely what you should be aiming for.

Testing Smart Bidding on Shopping Campaigns

Drafts and Experiments for Shopping is still in beta. So, for now, you’ll need to find alternative ways of testing Smart Bidding for Shopping accounts.

For accounts with reasonably stable activity, one option is to do a simple before-and-after test. It isn’t the most scientific, but it’s better than nothing.

Another option is to duplicate existing manually structure Shopping campaigns, then split by location, and run at the same time. It’s possible to control for location to a large extent by splitting it randomly.

We did this for a few clients trying out Target ROAS and got some impressive results.

Step 4: Optimize Performance

This is very much connected to step 3, testing, but involves actually doing something based on the results of those tests.

Optimize Your Testing

Finding the most effective testing strategy is a big job in itself. And so so important. Keep testing your testing.

The More Data, the Better

Smart Bidding gets its smarts from Google’s machine learning, which relies on data. The more data you can provide, and the higher the quality of these data, the better.

Keep refining your conversion tracking, keep updating your conversion data. Wherever possible, use portfolio bid strategies to make use of more data

Be Patient

Smart Bidding is based on a process of learning. Learning takes time.

There may also be big fluctuations in performance, especially for the more ambitious target changes. Be brave, too.

Change Your Targets When Appropriate

There is a balance between letting it run and making too many changes.

The problem with continually adjusting the target, is that there are likely to be short-term dips in performance based on Google’s algorithm needing to readjust/learn.

Sometimes, though, there will be external factors that require a change of target. Like during a peak sales season, for example.

Some businesses fluctuate a lot during a year, or over many years. Your targets should be sensitive to this.

A general rule of thumb: change your targets if you aren’t happy with the performance.

Use Your Time Gains to Focus on Other Search Activities

Bidding used to be one of the most time-consuming parts of running a PPC account. Smart Bidding has changed that.

Brilliant, now you can focus on other stuff instead. Things like:

  • Keyword additions
  • Strategic work
  • Ad copy

It isn’t like a PPC account manager ever has a lack of things to do. Maybe in 50 years automation will replace every task a human can do.

For now, every breakthrough in automation is a blessing to the human account manager.

Final Thoughts

Smart Bidding is a massive change to Google Ads, but it doesn’t really change the nature of PPC. The same challenge applies as always: finding a way of doing it better than the rest.

As discussed in this post, there are opportunities in finding the best way to test Smart Bidding, or the best way to optimize different strategies over time.

Smart Bidding is ultimately one extra tool in the massive toolkit of the PPC specialist – more complex than a lot that has come before, but ultimately reliant on the expertise of the user.

Google is always changing the game. That’s what makes this industry so challenging and so fun.

If you’re a PPC specialist, Google is not coming for your job. However, you will need to adapt.

More Resources:


Image Credits

Featured Image: Created by author, May 2019

CategoryPaid Search
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Daniel Gilbert

CEO at Brainlabs

Daniel Gilbert is founder and CEO of Brainlabs, the smartest digital marketing agency on the planet. As the self-proclaimed superhero ... [Read full bio]

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