Smart Bidding 101
Earlier this month we had the pleasure of an in house training session from one of our amazing team of Googlers. While Google Ads Smart Bidding is coming into its third year, it was great to touch base with the latest best practises and regroup on our agencies key learnings when it comes to making the most out of machine learning and automation.
Target CPA, Target ROAS, Max Conversions and Enhanced CPC are all subsets of automated bid strategies, with Target CPA and Max Conversions being most commonly used across our portfolio of clients. Before we get stuck into those two, a quick recap on what this smart bidding stuff is all about.
What is smart bidding?
From Google: smart bidding is subset of automated bid strategies that optimise for conversions or conversion value. Smart Bidding uses machine learning to optimise bids in order to maximise conversions and conversion value across your campaigns.
While us search executives are pretty darn great when it comes to optimising our clients Google Ads campaigns, we are only human. The major card that smart bidding holds is the ability to analyse over 70 million signals in 100 milliseconds. From device, location, time of day, browser, site behaviour and more, the attributes about a person and their individual context at the time of a particular auction, sadly but amazingly trumps human capability. This essentially means that smart bidding can take your Google Ads campaigns to the next level.
What is Target CPA bidding?
For businesses that know how much a lead needs to cost in order for that lead to be profitable to the business, Target Cost Per Acquisition bidding is a good place to start. With tCPA we set a target cost per conversions and Google Ads sets bids to help us get as many conversions as possible at or below the target that we set. Don’t go crazy rolling this one out just yet!
What you need to know about tCPA:
- An obvious one, use this strategy when your goal is a specific cost per conversion.
- This strategy does not work as well as it can if your daily budgets are limited. This strategy likes some room to breathe and learn, so we recommend setting your daily budget at 2 – 3x your target CPA.
- You need to start with a realistic CPA. If your campaigns have a historic CPA of $200, you won’t get much (any) traction by setting a tCPA that is below that mark.
- If you don’t know what a good CPA looks like or if you are launching new campaigns without conversion history, consider an alternate bidding strategy so you can determine what your CPA is.
What is Maximise conversions bidding?
As the name suggests, this one is all about maximising the volume of conversions generated by campaigns. This strategy DOES NOT take into account how much you pay for a conversion, the aim of the game is volume.
What you need to know about max conversions:
- Max conversions will use your daily budget, so ensuring that your campaigns are set to the ideal amount you want to spend is critical.
- From our experience, max conversions tends to work well when daily budgets are limited. If campaigns are not limited by budget, maximise conversions can and will raise your CPCs to amounts that can make you do a double take. I’m talking $30 on one click for a keyword that usually costs less than $5. Seriously.
- This strategy is great for advertisers that are looking for conversions and are new to the Google Ads game. SO if you don’t have conversion history, look at max conversions.
What I’d encourage you to bear in mind is that no smart bidding strategy likes constant changes. From keywords to ads to daily budgets and everything in between, each time you make a change to your campaign, Google’s machine learning needs to do just that – learn, with learning periods lasting from 7 – 14 days before data stabilises. Our tip? Make your campaign changes in 2 – 3 week cycles so that machine learning can do it’s thing as best it can.
Google Ads is a world of its own and the team at Bang Digital can help you navigate it. If you’re ready to start the conversation, get in touch.