Setting Smarter Search Bids

How our bidding algorithms learn


Setting your bid strategy up for success

Implementing a bid strategy with a solid foundation of conversion data will help drive results faster. You should measure all conversion actions that are valuable to your business and include them in the “Conversions” and “Conversion value” columns. Smart Bidding can optimize for conversions in your campaigns with Maximize conversions and Target CPA. With conversion values, Smart Bidding can deliver even better results by optimizing your return on investment with Maximize conversion value and Target ROAS. After you set up conversion tracking, wait for a few conversion cycles before implementing a new bid strategy so that our algorithms can adjust.

Note

A conversion cycle is the amount of time it takes for a click to result in a conversion. If you’re importing conversions into Google Ads, conversion cycles will also include the time it takes for conversions to be reported in your account. For example, if the majority of clicks yield conversions within 2 days, the system would adjust conversion performance in approximately 2 days.

Use the bid strategy report to identify how long it takes for your customers to convert. Where data is available, you can also use the bid strategy report to identify how many conversions Google Ads predicts could still be reported based on your typical conversion delay.

Looking at your optimization score and recommendations can provide suggestions on what bid strategy and targets to set. Overly-aggressive targets can affect your volume and make it harder to see if your bid strategy is delivering results. To avoid this, start with targets that align with your historical CPA or ROAS from a time period where no new conversions are expected due to conversion delay. For example, if you have a 2 day conversion delay, you can look at your historical CPA or ROAS over a 28 day period, while excluding the past 2 days from your evaluation.

When enough data is available, you may also see impact estimates surfaced alongside your Smart Bidding recommendation. These estimates answer the question “If my campaign used the recommended bid strategy and target, what impact would I have seen?” Impact estimates are based on your campaigns’ 7-day performance data and assume no other changes to auction dynamics and your accounts or campaigns.

Smart Bidding is always learning, even from campaigns using manual bidding. If you have multiple campaigns with the same performance goals, you can use portfolio bid strategies and shared budgets to manage them together. Once Smart Bidding is running, monitor performance and adjust as needed. 

Note

Use campaign drafts and experiments to test changes and understand their impact before committing. You can use drafts to prepare changes to a campaign. Then, apply these changes to your campaign or create an experiment to understand the impact of Smart Bidding before you apply it.

Bid strategy reports provide insight into what’s going on under the hood

Google Ads bid strategy reports give you visibility into how your automated bid strategies are performing. They include tailored metrics to show you what’s most relevant to each type of bid strategy, as well as other important data like your bid strategy status, top signals, target and budget simulators, average target CPA, average target ROAS, and conversion delay.

Example bid strategy report

When you have little to no conversion data available, Smart Bidding can still use query-level data beyond your bid strategy to build more accurate initial conversion rate models. This helps it make more informed bidding decisions from the start. It then uses Bayesian learning to continuously improve these models as it accrues conversion rate data at more granular levels (e.g. for a search query mapped to specific ad copy or landing pages).

You can also use Google Ads data-driven attribution (DDA) modeling to understand the contribution of each keyword across the conversion path. DDA is fully integrated with Smart Bidding in Google Ads. If you use an automated bidding strategy to drive more conversions or conversion value, your bids will use this data to help you meet your goal.

Adapting to your performance changes

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. Fluctuations in performance are often driven by internal factors like adding new keywords, testing new ad copy or updating landing pages. It can also be influenced by external factors like seasonality or competition. Allow enough time (at least one conversion cycle) to pass before evaluating performance.

Adjusting targets to meet your business objectives

When adjusting your targets, ensure they’re aligned with your overall business objectives. Consider factors like new performance goals, budgets, and market conditions. 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. Smart Bidding reacts immediately to any target change by adjusting bids.

To help you do this, you can use tools like Smart Bidding simulators to fine tune CPA and ROAS targets. Smart Bidding simulators show the relationship between various targets or budgets and how they affect cost, conversions and conversion value. It tries to answer the question: “What would be the impact on performance if I used a different target or budget?” When available, you can also use the Recommendations page in Google Ads to find opportunities to adjust your targets or budgets to get more conversions.

Note

Smart Bidding is always training on new data to set optimal bids. Changing a target won’t trigger a ‘learning’ status, and won’t reset anything Smart Bidding has already learned about your account. A target change will also quickly result in a change in bids. For example, if you need to increase spend on a campaign, you can quickly do so by increasing your CPA target by the same proportion that you want to increase bids. The advantage of Smart Bidding is that even though bids can be controlled in this way, Smart Bidding will continue to find the most cost effective conversions and conversion values.

As with most campaign optimizations, you can use the bid strategy report to monitor performance after making a change. In some rare cases, you may see some volatility for a conversion cycle or two. For example, you may see volatility if a large change in targets causes you to enter an entirely new set of auctions. This would be similar to what you would see if you were using manual bidding and suddenly ramped up your bids. Remember to evaluate performance after 1-2 conversion cycles to ensure conversions are complete due to conversion delay.

Note

Smart Bidding takes seasonality into account, and in most cases, it will automatically handle seasonal increases in traffic without requiring any input. At the same time, we know there are key moments for your business when you can anticipate significant shifts in conversion rate, like during a Black Friday sale or when a new product launches.

To prepare for these brief, anticipated changes in performance, you can adjust targets on the day of a sale or use seasonality adjustments. For example, let’s say you’re planning a flash sale for the weekend. Historically, you’ve seen a 50% increase in conversion rates when you’ve run a similar sale. With seasonality adjustments, you can apply a predicted conversion rate adjustment. Smart Bidding will then consider that adjustment for the date range selected while trying to hit your target CPA.

Adjusting for data recency and conversion delays

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. We recognize that recent performance is likely more predictive of future performance, but this should weigh less heavily against clicks that aren’t yet seeing conversions due to conversion delays.

For example, if you’re an advertiser such as a car dealership or travel booking company with lengthier conversion cycles, your recent data may not be as useful because those ad clicks require a longer period of time to yield conversions. As a result, we’ll weigh that recent data less heavily compared to advertisers with shorter conversion cycles such as a clothing retailer or food delivery service. This helps prevent overreactions to recent clicks that are experiencing conversion delays, which could lead to unnecessary bid reductions. We also automate this process so that advertisers don’t have to manually calculate and frequently adjust for these conversion delays themselves.

 

 

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