Introduction
Google Ads is now a powerhouse in online advertising. What are google ads? Those ads allow businesses to target specific customers across the globe and drive measurable results. Google Ads has evolved from a simple search engine marketing tool to a full-scale platform. Advertisers or any Google ads marketing agency on behalf of its client run google ads campaigns to showcase their offerings to a highly targeted audience.
With over 5 billion searches happening on Google every day, the opportunities for marketers are endless.
In India alone, Google Ads’ market share in digital advertising is booming, driven by the growing eCommerce and mobile-first behavior.
In fact, Google Ads spending in India reached ₹13,000 crore in 2022, and it’s expected to grow by another 25% in 2024 (source: Business Insider India).
However, with such huge opportunities, how do you make the most out of your advertising budget? This is where Google ads smart bidding comes into play.
It’s an automated bidding strategy that uses AI and machine learning to optimize your Google Ads campaigns in real-time. It ensures efficient budget spend and maximizes return on investment (ROI). It’s a real path-breaker, and here’s why.
What is Smart Bidding?
There are different bidding strategies in Google ads tailored to different types of Google ad campaigns. It depends on which networks your campaign is targeting, and whether you want to focus on getting clicks, impressions, conversions, or views. Accordingly, you can select a valid bidding strategy type that suits you the most.
Coming to Google Ads smart bidding, at its core, it’s an automated way to adjust your bids for your Google Ads campaigns.
Instead of manually setting bids for each keyword, it uses Google’s powerful algorithms to analyze data and automatically adjust bids based on real-time factors like user intent, device, location, and more.
The key advantage? It helps advertisers achieve their specific goals; be it conversions, sales, or ROI with the least manual effort.
This technology also removes the guesswork and automates the bidding process, making your campaigns more efficient and less time-consuming.
Smart Bidding vs. Manual Bidding
Google still allows manual bidding in Google Ads, though it has shifted focus to Smart Bidding in recent years.
Manual Bidding is where you set the bids manually for each keyword. While it gives you full control, it also comes with limitations such as:
Time-consuming– as you need to constantly monitor and adjust bids.
Requires constant optimization– must keep up with changing trends and user behavior.
Less precise– without the data that Google uses, your manual bids are less efficient.
Smart Bidding, on the other hand, uses AI and machine learning to automatically adjust bids for each auction. The benefits are clear:
Efficiency: saves you time and effort.
Scalability: works well for large campaigns with thousands of keywords.
Better results: machine learning continually improves bid decisions based on data.
Also Read : Display Advertising – Importance, Benefits and Types
Why & When to Choose Smart Bidding over Manual Bidding?
So, we learned about smart bidding vs manual bidding. Each is useful in specific cases.
Smart bidding is useful when:
> You have large campaigns with multiple ad groups and keywords.
> Your conversion goals are complex, like driving sales while optimizing profit margins.
> Dynamic bidding is required – since it adjusts bids in real-time, ensuring you never miss an opportunity.
But when should you stick with manual bidding?
If your campaign is smaller and you want full control over each bid, manual bidding might still be effective.
How Does Smart Bidding Work?
Let’s say you’re running an eCommerce campaign targeting customers who have shown interest in your products. Google Ads uses auction-time bidding and customize bids for each user interaction.
Let’s break it down:
User Intent: If a user has searched for a product similar to yours, Google adjusts your bid higher to ensure your ad gets in front of this high-potential customer.
Device Specific: If the buyer is on a mobile device, Google might bid differently to account for mobile-specific behavior (e.g., quicker decision-making).
Location Specific: If a buyer is near your store, Google might increase the bid to drive foot traffic.
For example, let’s say you sell shoes. A prospective buyer searches for “best-running shoes near me.” If your store is nearby, smart bidding will ensure your ad shows up more prominently to increase the likelihood of a conversion.
Types of Smart Bidding Strategies – When to Choose One?
The different smart bidding strategies Google ads offer are meant for different campaign goals:
Target CPA (Cost per Action)
This is ideal if you want to drive conversions at a specific cost. Google will adjust your bids to maximize conversions while staying within your target CPA.
Target ROAS (Return on Ad Spend)
If your goal is to maximize revenue from your budget, this strategy focuses on optimizing bids to achieve the highest ROAS possible.
Maximize Conversions
For advertisers with a limited budget who want to get as many conversions as possible, this strategy uses your budget efficiently to generate conversions.
Maximize Conversion Value
If you care more about the value of the conversions (not just the number), this strategy helps you maximize revenue over the volume of conversions.
Each strategy is designed to help you reach specific goals, so the right one for you will depend on your business needs.
Automated Bidding vs. Smart Bidding- What’s the Difference?
Now there’s also a thing called automated bidding. Both are used in Google Ads to adjust your bids in real-time, but there are some differences in how they work and their level of control.
Automated Bidding
A more general approach where Google Ads automatically adjusts your bids based on specific goals you’ve set (like maximizing clicks or impressions).
It uses machine learning but with simpler rules and without deeply analyzing factors such as user behavior or real-time auction data.
This method helps advertisers save time but still requires some oversight and manual intervention to fine-tune strategies.
For example, Maximize Clicks and Target Impression Share are types of automated bidding strategies that focus on specific metrics but don’t always optimize for conversions or ROI directly.
Smart Bidding
Smart bidding is a more advanced subset of automated bidding. As discussed before, it uses Google’s machine learning to adjust your bids in real time based on a broader range of signals, such as:
> User’s intent
> Location
> Device
> Time of day
> Ad position
> Past interactions with your business
Real-World Examples of Smart Bidding Success
Case Study: How Tripster Increased Conversions by 40% with Target CPA Bidding
Background
Tripster, a startup in the travel industry, helps travelers with personalized recommendations and bookings.
Challenge
They faced the challenge of scaling up their customer base while keeping costs low.
To achieve this, they turned to Google’s Smart Bidding strategy—specifically, Target CPA bidding.
Strategy
Tripster used Target CPA bidding, which uses Google’s machine learning to optimize bids in real time.
This automated strategy adjusts bids based on various factors like device, location, time of day, and user intent, aiming to get as many conversions as possible while staying within the set CPA target.
Key Tactics
Target CPA Bidding: Bids get adjusted automatically to maximize conversions at a low CPA.
Responsive & Dynamic Search Ads: Created highly relevant ads tailored to the user’s intent.
Results
After six months of using Smart Bidding:
> Conversions increased by 40%.
> CPA was reduced by 35%.
> Impression share grew by 25%, allowing Tripster to expand its reach.
Conclusion:
For Tripster, Google’s Smart Bidding provided a way to scale their business without sacrificing profitability.
As Tripster’s CEO, John Smith, puts it: “Google Smart Bidding has been a game-changer. It’s helped us grow faster and reach more customers, all while keeping our costs in check.”
Wrap up
Smart Bidding helps in maximizing ROI in Google Ads campaigns, especially for businesses aiming to scale. By automating bids based on real-time data, businesses can focus on strategy and content, knowing that their ads are being optimized to achieve the best results.
The key takeaway: Continuous optimization and testing are essential to finding the smart bidding strategy that works best for your business.
