In this guide, we’ll take you behind the scenes and walk through how Google Ads automated bidding and Smart Bidding work. You’ll learn what signals are used, how bids are calculated, and what you can do to improve performance.
The bidding challenge
- Marketers often choose automated bidding solutions to make frequent bid optimizations using comprehensive data models.
Why: Given the dynamic nature of search auctions, the “right” bid can be a moving target.
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Google Ads automated bidding
- Smart Bidding offers true auction-time optimization that sets bids for each individual auction, not just a few times a day.
Why: This gives advertisers a more precise level of bid optimization and the ability to tailor bids to each user’s unique search context.
- Smart Bidding uses query-level data across your account.
Why: This gives the bidding algorithms significantly more data to make decisions with, and helps reduce performance fluctuations when keyword-level conversion data is scarce.
- Smart Bidding evaluates how signals interact with each other to identify meaningful correlations that impact conversion rates.
Why: By seeing which signal combinations are most predictive of conversion performance and adding these to bidding algorithms, Smart Bidding can calculate more holistic bids that account for how certain signals work together.
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Bid strategies to help you meet your goals
- Smart Bidding offers conversion and value-based bid strategies.
Why: These bid strategies help meet your business objectives of maximizing conversions and conversion value.
- Automated bidding also offers awareness-based bid strategies.
Why: These bid strategies help meet your business objectives of maximizing clicks or awareness.
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How Google Ads calculates bids
- Smart Bidding uses Google’s machine learning technology to optimize for conversions across every ad auction.
Why: This allows you to set millions of unique bids every second across campaigns.
- When calculating bids for Maximize conversions or Target CPA, your bid strategy will take into account your specified budget or target CPA, contextual signals at auction-time, and search query-level performance across your account.
Why: This helps your bid strategies predict the auction-time conversion rate before setting a bid.
- When calculating bids for Maximize conversion value or Target ROAS, your bid strategy will take into account your specified budget or target ROAS, contextual signals at auction-time, and search query-level performance across your account.
Why: This helps your bid strategies predict the auction-time conversion value per click before setting a bid.
- The same bid is applied across all keywords when using the Maximize clicks bid strategy.
Why: Bids are adjusted up or down to ensure you hit your campaign budgets while getting as many clicks as possible.
- Bids are set to help achieve your Impression Share goal when using the Target impression share bid strategy.
Why: This will help you show your ad in the Google search results in the optimal location based on your goals.
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How our bidding algorithms learn
- Ensure that you measure all conversion actions that are valuable to your business and include them in the “Conversions” and “Conversion value” columns.
Why: Implementing a bid strategy with a solid foundation of conversion data will help drive results faster.
- As your business grows and you make changes to your campaigns, Smart Bidding continues to update your bidding algorithms to align with any corresponding shifts in performance.
Why: By adapting to your performance changes, Smart Bidding can help you meet your goals.
- You should feel comfortable changing CPA and ROAS targets as frequently as you would like, and by as large a magnitude as you would like.
Why: Smart Bidding reacts immediately to any target change by adjusting bids.
- Our algorithms apply adaptive historical weighting to rely more heavily on recent data when adjusting bids while also accounting for the length of your conversion cycle.
Why: Adjusting for data recency and conversion delays helps deliver better performance.
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Key takeaways
- Bid strategies that align to your goals:
- Choose from a variety of bid strategies to meet your business objectives, conversion goals, and conversion value goals.
- True auction-time bid optimization:
- Smart Bidding optimizes bids for each and every auction, helping you set more precise bids tailored to each user’s search context and meet your performance goals more effectively.
- Query-level performance modeling:
- Smart Bidding uses search query-level conversion data across your account to help solve for data scarcity that individual keywords may face. This allows the algorithms to bid more accurately on low-volume keywords or keywords that are still building performance history.
- A richer set of contextual signals:
- In addition to evaluating key signals like device, location, and time of day, Smart Bidding accounts for other signals like browser, operating system, language, and many more. This helps incorporate the search context and conversion likelihood of each auction into every bid. It also considers signal combinations that have a statistically significant impact on conversion rate, which individual bid adjustments may not capture.
- Algorithms that keep learning:
- Smart Bidding continuously updates your bidding algorithms to align with changes in performance and adapts to your business’ specific conversion cycle to know how heavily to weigh recent versus historical data.
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