A Guide to Google Ads Smart Bidding

   

A Guide to Google Ads Smart Bidding

Which one should I choose?

Smart Bidding Strategies

There are a variety of smart bidding strategies available to use in Google Ads, though it’s important that you understand which strategies are right for you. Each individual strategy optimises and performs differently… So your campaign objective will determine the strategy used. Take the time to consider which strategy is right for you before implementing smart bidding, as you will need to allow time for it to learn and perform. 

Smart Bidding Options:

  • eCPC
  • Maximise Clicks
  • Target CPA (Cost per acquisition)
  • Target ROAS (Return on ad spend)
  • Target Outranking Share
  • Maximise Conversions
  • Target Search Page Location

How does each strategy work?

eCPC

This strategy predicts the likelihood of a conversion for each auction and adjusts the bids accordingly. eCPC attempts to keep each keyword’s average CPC below the max CPC set by the advertiser.  

When using eCPC you do not need bid modifiers on location and time of day / day of the week or any other signal with the exception of device. This is because the strategy accounts for this. You do however, still require device bid modifiers. 

We recently tested this strategy for one of our clients, resulting in a 76% increase in CTR, a 38% increase in Conversion Rate, and a 27.3% decrease in Cost Per Lead

Target CPA 

This bid strategy predicts the Conversion Rate outcome for a click in each and every auction, based on the numerous contextual signals that are present. The algorithm will attempt to maximise conversions as well as hit the target CPA, set by the advertiser. If the strategy has been working efficiently and is currently under the target CPA the algorithm may increase the bids to capture more competitive conversions until it hits the target CPA. 

You can now apply Target CPA bidding without previous conversions on the account, as Google will take previous learnings from the masses of data it has available. It’s important to set a realistic CPA for the strategy, setting an unachievable CPA target that hasn’t been met previously will cause the strategy to under perform. It is also recommended that that campaign budget is at least 10 times the target CPA. For example, if you target CPA is £10 the daily budget should be at least £100 per day. 

Target ROAS 

This strategy predicts conversion values for each auction, allowing advertisers to optimise towards profitability, average order value or lifetime value. This is particularly relevant for subscription products or advertisers with multiple goals, rather than focusing on raw numbers this strategy allows you to focus more on the quality or value of those customers to your business. 

Retail advertisers in particular can use this algorithm to maximise revenue and lifetime value through paid search. 

Maximise Clicks 

This is fairly self-explanatory; the algorithm will focus on increasing clicks for your campaigns whilst spending a target amount. If a target spend amount is not specified, then the system will use the remaining daily budget. It can be used on a campaign or as a portfolio strategy; grouping campaigns together in to a single strategy.  

The strategy will adhere to a Max CPC bid if this is applied, otherwise it will adjust bids and attempt to obtain as many clicks as possible, whilst spending the target amount. 

This strategy is great for awareness campaigns or promoting new content and driving new visitors to your site, we've also seen this work effectively in Grant accounts.

Target Outranking Share 

This strategy helps advertisers outrank another domain. It is a portfolio bid strategy that automatically pushes or reduces bids to help outrank a specific domain. You can only target one domain at a time. Outranking another domain means your ads are displayed above the other domains or appear when the other domain does not show.

It is important to note that this strategy will not necessarily improve the overall ad rank of a campaign, it only improves the rank against a specific domain. Final ad placement is still ultimately determined by the outcome of the auction, which consists of the usual parameters of competitor activity and quality score. 

Target Search Page Location 

This type of bidding works much like the target outranking share strategy, with the difference being this strategy is attempting to display your ad at the top of a results page or on the first page of results. It is also a portfolio strategy that increases or decreases keyword bids several times a day. 

Placement at the top of a page or on the first page is not guaranteed - the auction outcome is still dependant on the usual factors. If you have specific generic keywords you want to be known for then this strategy could be for you. 

Maximise Conversions 

Another aptly named bid strategy, it does what it says on the tin! This algorithm automatically sets bids to help gain the most conversions from your budget. Advanced machine learning is used here to optimise the bids and it uses all the relevant signals and historical performance to determine the optimal bid. This strategy can be used in Grant accounts to remove the $2 bid limit!


Remember, each smart bidding option within Google Ads caters to a different objective or ambition, assess and select the strategy you use wisely! Quality of landing page and user journey still apply… It is important to give your user a good on-site experience so they don’t feel the need to head back to the search engine to find other providers. Consider your own objectives as well as the budget you want to spend. Be sure to run tests or 'campaign experiments' to see how the strategy performs. 

If you want to learn more about smart bidding strategies, click here to open the second part of our blog series - Vertical Market Smart Bidding Strategies:

Keep reading


If you're having trouble figuring out which strategy is suitable for your business or want to learn how you can maximise the effect of your bidding strategies, request your free Google Ads audit!

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