In today’s dynamic digital marketing landscape, automation is crucial for maximizing campaign performance and efficiency. One of the most effective tools in this regard is Google’s Smart Bidding, a subset of automated bid strategies that leverages machine learning to optimize for conversions or conversion value in every auction — a process known as “auction-time bidding.”

The Power of Smart Bidding

Smart Bidding stands out as a robust and durable solution because it combines your clients’ conversion data, such as sales or leads, with Google’s powerful machine learning algorithms. This combination uses the client’s account conversion data along with billions of signal combinations to set precise bids in each auction. This ensures that the bids are optimized to drive as many conversions as possible, thereby maximizing your clients’ return on investment (ROI) or staying within their budget targets.

How Smart Bidding Works

Smart Bidding uses various strategies to help achieve specific business goals. Here are the primary strategies:

1. Target CPA (Cost Per Acquisition): This strategy sets bids to help get as many conversions as possible at the target cost per acquisition you set.
2. Target ROAS (Return on Ad Spend): This strategy sets bids to help get as much conversion value as possible at the target return on ad spend you set.
3. Maximize Conversions: This strategy automatically sets bids to help get the most conversions for your campaign while spending your budget.
4. Maximize Conversion Value: This strategy automatically sets bids to help get the most conversion value for your campaign while spending your budget.

Leveraging Business Data for Optimization

One of the significant advantages of Smart Bidding is its ability to use first-party data to optimize toward business goals. Here’s how different types of businesses can leverage Smart Bidding:

For eCommerce Clients

An eCommerce client looking to optimize for higher-value conversions should start with readily available values, such as the cost of sales and revenue. Even if these are not available, starting with static or proxy values, like the average order value, can significantly enhance the optimization process.

For a more advanced approach, eCommerce advertisers can use business data, such as profit margin, to optimize for profit rather than just revenue. By focusing on the profit margin, Smart Bidding can help prioritize items that yield better returns, ultimately optimizing the overall profitability of the campaigns.

For Lead Generation Advertisers

Lead generation advertisers can use their historical data to estimate the probability of a specific type of lead generating a conversion. This probability can be factored into the revenue associated with this potential conversion and used as a lead conversion value. This allows advertisers to assign values to conversions and use value-based bid strategies like Maximize Conversion Value with a ROAS target.

For Clients with Repeat Customers

Businesses with repeat customers, such as an eCommerce retail store, can leverage historical purchase data to calculate the future conversion revenue each customer will generate. This data can then be imported into Google Ads for optimization, allowing Smart Bidding to target users likely to provide long-term value, thereby optimizing for lifetime value (LTV).

Privacy-Safe Performance

Smart Bidding is designed to be a privacy-safe solution. It ensures the security and privacy of user data while optimizing bids to achieve the best possible performance. By using a client’s first-party data, Smart Bidding can maintain high performance levels even as third-party cookies and other pixel-based tracking solutions become less reliable due to privacy regulations.

Key Takeaways

• Smart Bidding: Uses machine learning to optimize for conversions or conversion value in every auction.
• Durable and Privacy-Safe: Combines client’s conversion data with Google’s machine learning, ensuring data privacy and security.
• Versatile Strategies: Includes Target CPA, Target ROAS, Maximize Conversions, and Maximize Conversion Value.
• Leverages Business Data: Can use profit margins, historical purchase data, and estimated lead conversion probabilities for optimization.
• Enhanced Performance: Helps advertisers get the most out of their budget by predicting a user’s probability of conversion or future lifetime value.

In conclusion, Smart Bidding is an essential tool for modern digital marketers looking to optimize their campaigns in a privacy-safe manner. By leveraging first-party data and sophisticated machine learning algorithms, Smart Bidding helps businesses achieve their specific marketing objectives efficiently and effectively.

The following are the questions from this article:

• Q: How does Smart Bidding drive performance in a privacy-safe way?
• Q: What’s one way that an eCommerce client can use Smart Bidding?
• Q: If a client is looking to optimize for higher-value conversions, where should they start?
• Q: What type of data does Smart Bidding use to optimize toward business goals?
• Q: Which of the following statements is true?

Resources

To learn more about this topic, select the following links.

• Ready to help your client get the most from automating and optimizing your bids? Check out the official guide .
• Watch this video tutorial on how Smart Bidding works on the Google Ads platform.
• Check out the digital marketing playbook.