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Smart Bidding, a smart option

In a short time the field of SEM has become tremendously competitive, complex and at the same time, full of possibilities. Advertisers, large and small, have more and more options and tools to optimize their online campaigns.

One of the trends on the rise in 2019 are smart campaigns, wherein the Google algorithm applies machine learning technology in order to optimize the results of the advertiser. In this context, smart bidding is gaining strength, because it greatly simplifies the complex process of choosing bid strategies for the advertiser.

The algorithm takes into account the data collected by the user, the advertiser’s history, and the search engine itself, to choose the optimal bid strategy. The algorithm achieves this handling of variables in such a way that is difficult for a human brain to match. So, what is smart bidding?


Smart Bidding and campaign management

We know that for the good performance of our advertising campaigns, we must follow certain recommended practices; such as having well-structured campaigns, generating optimal ads that are related to the keywords of each ad group, having keywords for user searches, and apply bid adjustments that ensure our messages reach our potential customer. All this in addition to several important details at the time of activating a PPC strategy.

But once the structuring of our campaigns is finished, the next immediate step is to begin optimization. This is where the automatic or smart bidding strategy comes in.


What is the automatic bid strategy?

The automatic bid strategy is the strategy that helps us set up bids to achieve specific performance goals for our business, such as increasing website visits, increasing brand visibility, getting more conversions, getting conversions with a target CPA, etc. For each objective there is a different bid strategy:

Objective: Increase visits ………………………………………………… Bid strategy: Maximize clicks

Objective: Increase visibility ………………………………………… Bid strategy: Target impression share

Objective: Get more conversions ………………………………………. Maximize conversions

Objective: Get conversions with target CPA ……………………. Target CPA

Objective: Achieve the return of advertising investment …………….. ROAS objective


What is smart bidding?

Smart bidding is the automatic strategy based on conversions (target CPA, target ROAS and enhanced CPC). According to Google, “it’s the subset of automatic bid strategies that use machine learning to get more conversions.”


Why use Smart Bidding?

Because this strategy allows the Google Ads platform to evaluate the bids wherein campaigns are competing, and to define those bids wherein there is a greater likelihood that a conversion will be generated and in which bids there isn’t. The automatic bid strategy adjusts the manual bids using an algorithm, to increase the visibility for clicks that seem more relevant in the generation of the conversion, and reduce the visibility for clicks that seem less relevant.

If we take into account the amount of data and variables that it handles and its great calculation capacity, the use of smart bidding greatly surpasses the human predictive capacity. The variables that your algorithm takes into account range from geolocation to the time of day, device type, remarketing lists, and even browsing history to define whether a user is likely to become a customer.


How is this adjustment determined?

The system evaluates the history of the clicks and conversions of the campaigns, and compares the bids in which our campaigns are currently competing. This is how the tool identifies the highest likelihood of conversion and adjusts the bids to improve our competitiveness, or reduces our CPC if it detects that the conversion is not likely, with which we pay less value for the clicks that convert less.

During the optimization of the bid strategy of our campaigns, if we have not yet implemented any automatic strategy, the idea is to run a test using one or two campaigns, the test will engulf a certain period of time (no less than 15 days which is the tool’s learning period). At the end of the period we will analyze if we have obtained an improvement in the results. However it is very important to remember that this type of smart bidding strategy usually increases the average CPC of the campaigns, which is part of the process,  since our main objective is to reach the users with the highest probability of conversion and optimize based on conversions and not clicks.


Main advantages of using Smart Bidding

  • You can save time by selecting the ideal bids for campaigns.
  • Advanced learning: The artificial intelligence of the tool allows it to make more accurate predictions, through the evaluation of a large volume of variables that escape human management.
  • Improved campaign yields.


When can we use this strategy?

  • When we have a minimum of 15 search conversions in the last 30 days. Improved CPC and Maximize conversions.
  • When we have a minimum of 15 search conversions in the last 30 days. Campaigns must track real conversions and have no budget constraints. Target CPA.


Google’s machine learning is providing valuable tools to managers of digital marketing campaigns to achieve their goals and optimize results. It is true that some points have yet to be perfected and that this type of strategy is not valid for all campaigns, or for all advertisers (for example, if you do not have historical conversion data or are specific and short-term campaigns), but in many cases the advantages are considerable because it simplifies the work of the campaign manager a lot, and optimizes the results.

Here we leave a link to Google where you can see more information.


Liliana Rodrigues

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