How to Use Smart Bidding in AdWords

In an age of smartphones, voice activated home entertainment systems, and two day shipping, instant gratification dominates. To an ever increasing degree, we rely on computerized technology to help us better organize and run our busy lives. Indeed, digital marketing is not immune from this trend. AdWords and other PPC driven marketing systems have begun to introduce more and more automation to streamline their processes. One of the most obvious and helpful of these automations comes in the form of “smart bidding.”

A catch-all term for all of AdWords’ automated bidding strategies, “smart bidding” varies in method from placement to competition. In AdWords, you can access these options in the “bidding” section of your campaign settings. Is smart bidding right for your campaign? And if so, how will you know which kind to use?

Let’s have a look.

Types and Tricks

After stating your goal to AdWords, smart bidding will use Google’s extensive data to help you achieve it. Some examples of what Google has access to include: a user’s search history; which videos they’ve watched on YouTube; how long they spend on certain sites; their tendency to click on ads; and the apps they use on their phone. Having all of this information is great and can really help you target your ads. But which kind of smart bidding should you use? Here’s a brief breakdown of all seven types.

Enhanced CPC – The default bidding strategy for new campaigns, this type is useful if somewhat limited. It functions primarily in “on” or “off” modes. Enhanced CPC uses a limited range of information, such as geographic location, or time of day, to adjust an ad’s bid in the ad auction to try and increase the likelihood of that query resulting in a click. Some experts recommend using this mode with caution. Manual CPC can offer much more control over your bids, which can now range dramatically if Google believes it can earn you a conversion.

Target CPA – Divide your ad cost by the number of conversions you earn and you’ll have your cost-per-acquisition (CPA). It means the same thing as “cost-per-conversion”, which often goes into calculations of profit. This bidding strategy tells AdWords to adjust your bids to try and earn you conversions at or below your target CPA. If you want to limit your budget and achieve maximum efficiency, this strategy could be right for you. Note that AdWords recommends you set a target CPA and it can be tempting to set a rather low one. It would prudent to resist that urge, as setting a CPA that is too low can kill any good campaign in its infancy. Your ads won’t earn you anything if they aren’t bidding high enough to show at all!

More Types and Tricks

Target ROAS – Short for “target return on ad spend” this strategy is virtually identical to target CPA. The only key difference is that ROAS factors in the value of each of the conversions you’re earning. If purchase amounts for your business vary wildly, this strategy could be useful.

Maximize Clicks – Simply put, this strategy delivers the most possible clicks at a given budget. There are risks to this, of course. If you have a small budget, AdWords could favor clicks from users just searching for information. This could be a problem in that those users are far less likely to convert. At the same time, with a big budget, AdWords may ramp up individual bids just to try and get every impression possible. Use this strategy carefully.

Maximize Conversions – Same as above, but for conversions. Note that not all conversions are high value conversions, and this bidding strategy struggles to recognize that sometimes.

Target search page location – If you’re an aggressive advertiser with a plethora of competitors, this strategy may be helpful in trying to push them out of the way! Once again, the automation doesn’t always get this one quite right, so be careful when investing in it heavily.

Target outranking share – Use this strategy to ask AdWords to place your ads above a specific competitor. Like target search page location, this option is best for aggressive marketers who actively want to go after their competition. If you want more general success, try some of the other strategy options.

Conclusion

Having had a chance to learn a bit about all seven types of smart bidding, you’ll now be armed with the tools you need to decide if each type is right for your campaign or not. Automation could be your best friend in digital marketing, but only if you understand how best to utilize it.

Happy Marketing!

 

For further reading, please check out the following:

About AdWords Smart Bidding

Smart Bidding: Definition

About

Ricky Noel is a Google AdWords Certified AdWords Professional, a proud employee of eBiz, ROI. as well as a full-time student at SUNY Geneseo, where he studies English, Education, and Theater. Ricky got into the internet marketing industry when his father, Rick, introduced him to Google AdWords and showed him the possibilities online advertising represented for business owners and web-users alike. Ricky began working with eBiz in the summer of 2016, between senior year of highschool and shipping off to college. Since then, he has worked remotely from school thanks to the wonders of Google Hangouts and high speed internet connectivity. His passions include reading, writing creatively and analytically, and performing in plays and musicals. He is also an experienced Dungeons and Dragons aficionado, holds Abraham Lincoln and George R.R. Martin among his personal heroes, and is really excited to help businesses grow and spread their message online.

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