Quick answer: Smart Bidding uses Google’s data to set bids for each auction. It works well once conversion tracking is accurate and volume is steady.
Bidding strategies tell Google what you want and how to spend your budget. Smart Bidding strategies use Google’s automated bidding to set a bid for each individual auction, based on how likely that search is to lead to a conversion.
The main bid strategies
- Maximise clicks: gets as many clicks as possible within budget. Useful for brand-new accounts with no conversion data, ideally with a maximum CPC limit.
- Manual CPC: you set bids yourself. Maximum control, but more work and no use of Google’s real-time signals.
- Maximise conversions (Smart Bidding): gets as many conversions as possible within your budget.
- Maximise conversions with a target CPA: aims for an average cost per conversion you set.
- Maximise conversion value / target ROAS: for businesses that track the value of each conversion, such as online stores.
When to use Smart Bidding
Smart Bidding needs reliable conversion tracking. Without it, the system optimises towards the wrong thing. A sensible path for most small accounts:
- Set up and test conversion tracking. Read Google Ads conversion tracking.
- Start with Maximise conversions (or Maximise clicks with a CPC cap if you’re very new).
- Once you have a steady stream of conversions (as a rough guide, around 15 to 30 a month or more), consider setting a target CPA close to your actual average.
Setting a target CPA
Start your target at or slightly above your current average cost per conversion. Setting it far lower than reality usually restricts delivery and you get fewer conversions. Lower it gradually as results allow.
Make sure you’re counting the right conversions
Smart Bidding treats every primary conversion action as a goal. If you count page views or clicks on your email address as conversions, it will chase those. Keep primary conversions to real enquiries, such as form submissions and calls of a reasonable length. Read 7 signs your ad tracking is broken.
Give it time
After changing bid strategy, there’s a learning period, often a week or two, while results settle. Avoid big changes during that time and judge on several weeks of data.
Sources and further reading
Written by Gregory
20 years building websites and running lead generation, mostly with my own money on the line. Based in Sydney, working with clients worldwide. How I work →