AI & Google Ads – A Rundown of Smart Bidding Strategies

Google Ads

Google Ads is an extremely powerful platform for advertising both products and services. While social media advertising has become highlyeffective, if you want to generate highly relevant traffic and drive sales within days, then Google Ads is the best advertising format.

When people are using their social media accounts, they will typically be scrolling through their newsfeeds. In contrast, when people search for specific services or products on Google, they usually intend to make a purchase. With the intelligent use of Google Ads, you can get in front of people looking to buy or sign-up, there and then. 

In this article we will examine the use of automated bidding and look at how it can make managing Google Ads campaigns easier and more effective.

What is Smart Bidding?

The only downside of using Google Ads to promote your business is that advertising space in profitable niches does not come cheap. With this in mind, it is crucial to monitor and optimize campaigns to get the best return on your advertising spend. 

Managing your Google Ads campaigns can often feel somewhat complex and time-consuming when you constantly attempt to optimize advertising copy, ad schedules, demographic targeting and bidding strategies.

Google’s Smart Bidding options can take care of some of the campaign optimizations for you. Once a Smart Bidding strategy is put in place, Google goes through a learning phase whereby it will analyze the performance of your ads and the behavior of those users who click on your ads. By using machine learning, Google can take the demographic data of users, their search history data and other contextual information such as their location and device to decide on how likely they are to ‘convert’ on your website. 

When Google has enough data, it can begin to adjust how much you are willing to pay for a user’s click according to its analysis, which in turn should help you achieve your marketing goal for the lowest cost possible.

If you are new to Google Ads, you can find bidding strategies by clicking on the name of your campaign, then clicking “Settings,” which is on the side menu on the left (on a desktop device) and then click “bidding.” Near the top of the bidding section, there should be a drop-down menu that contains a list of all the bidding strategy options, such as “Manual CPC.” You may have to click “Change bid strategy” to see the drop-down menu.

Why Google Smart Bidding Doesn’t Always Work

Smart bidding requires data. The more data it has available to analyze, the better your results will be. If you have a campaign with a relatively low budget that only gets a dozen or so clicks per day and a handful of conversions, then Google’s smart bidding strategies might not be for you.

On the other hand, if your campaigns typically drive thousands of clicks and hundreds of conversions per day, then smart bidding is likely to work very well when it comes to optimizing your campaigns. Google will still need at least a few days – up to 3 weeks, to take your data and learn how to optimize your bids. As a rule of thumb, only use smart bidding strategies if you have over 100 conversions per month. Smart bidding can work with less conversion data, but proceed with caution and monitor your campaign performance closely.

Campaign Adjustments & Smart Bidding

One of the issues with smart bidding is that manual adjustments to your campaign can dramatically impact its performance. So, for example, if you have a campaign targeting competitive keywords such as “phone answering service” and you are using a smart bidding strategy on day 1, but then on day three, you adjust the bids on mobile devices, it’s likely that performance will drop and that Google will have to relearn and re-optimize the smart bidding strategy, starting again from day 1. 

With this in mind, if you are a very hands-on Google Ads manager who likes to make lots of manual changes and tweaks to your campaigns, then smart bidding might not be the ideal bidding strategy for you.

You should also make sure that each campaign that uses smart bidding has its own specific daily budget and does not use a shared budget.

Specific Smart Bidding Strategies

If you think smart bidding strategies might be suitable for your management style and your campaigns, then next, you will need to pick a specific strategy. There are a number of automated bidding strategies to choose from.

Maximize Clicks

Maximize clicks is similar in terms of its performance to the old “accelerated bidding” setting that used to be available in Google Ads.

As you would expect, this strategy will look to get as many clicks as possible while staying within your daily budget. 

If your product or service is very profitable and your website conversion rate is high, this strategy may work well. However, if your budget and return on ad spend is very tight, and you need to be cautious and selective about how much you spend on ads and who clicks on your ads, then Maximize Clicks is probably not a good bidding strategy for your campaigns.

When using maximize clicks, ensure that your targeting is accurate and specific. For example, if you use broad match keywords, Google might drive many irrelevant and low-value clicks on your ads. It is generally best to keep your targeting as specific as possible, including variables relating to keyword match types. 

You may also want to look at your location targeting carefully. It may typically be cheaper for Google to drive clicks from the mid-states of the U.S., for example, whereas your most profitable customers may normally come from the big cities on the east and west coast.

Target Impression Share

Impression share relates to:

“…the percentage of impressions that your ads receive compared to the total number of impressions that your ads could get. Impression share = impressions/total eligible impressions”. Quote source

So if your target impression share is 50%, that means you are showing on Google’s results pages half of the time that user’s search for a specific keyword or keywords.

When you select “Target impression share” as your bidding strategy, you will be presented with more options.

First, you need to select “where you do you want your ads to appear.”

For this, you can choose:

  • Anywhere on the results page
  • Top of results page
  • Absolute top of results page

Remember that Google Ads can be placed at various places on results pages, depending on the device and the ad format. Generally speaking, you will want your ads to appear at the top of the results pages – usually within the top 4 ads, above the organic listings, or at the “absolute top,” which would be position 1, at the top of the adverts, and above all other listings. 

Sometimes it can be overkill to use the “Absolute top of results page” setting and substantially more expensive than the “Top of results page.” With this in mind, if you are unsure which option to choose, “Top of results page” is often a good starting point.

Once you have decided on where you want your ads to appear, next, you will need to determine what “Percentage (%) impression share to target.” 

For example, if you want your ads to show at the top of the results 90% of the time, choose 90% here.

Finally, choose your maximum bid amount – i.e., how much you are willing to pay for someone to click on one of your ads.

You must set a maximum CPC bid limit – otherwise, Google can bid whatever they want to get your targeted impression share. Start with a bid that is around 10% higher than the average of what you typically pay for a click, and then after a few days, see if you need to increase the maximum bid.

Maximize Conversions

As you would expect with the name “maximize conversions,” this strategy aims to generate as many conversions as possible within your daily budget. The success of this strategy will be dependent on how you track conversions in your Google Ads account. For example, if you track live chat conversations as a conversion, but only a small percentage of live chats convert into clients, then you may not experience a positive return on ad spend. 

If this was the case, it could be worth removing live chats as a Google Ads conversion so that the bidding strategy looks to generate form completions and phone calls only.

You only want to drive conversions that provide value for your business. Otherwise, this smart bidding strategy is unlikely to produce favorable results. For more information on setting up conversion tracking, please see this YouTube video.

Be aware that the cost per click can ramp up drastically with Maximize Conversions, as Google is sometimes willing to pay 3 or 4 times more than your typical amount per click for a user that it thinks is likely to convert. 

Conclusion

Smart bidding offers a variety of opportunities and can often make it much quicker and more efficient to manage your campaigns. However, you should monitor your campaigns closely when changing bidding strategies and keep a close eye on performance for the first month. To compare the performance of an automated bidding strategy to a manual bidding strategy, you can also use a Google Ads experiment to compare performance in real-time.

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