AdWords applies Smart Bidding to automated bidding strategies

Innovations / July 26, 2016

The robots are coming, hooray hooray.

In late July, AdWords announced the arrival of Smart Bidding to its AdWords and DoubleClick Search advertising networks. According to a recent Inside AdWords post, Smart Bidding is the new name for a subset of automated bidding strategies that apply machine learning to optimize bids based on conversion data.

Possible learning curve ahead

Do we really get to sit back and let the AdWords robot manage our bids for us? As with all AdWords tools, there is a learning curve involved. Anyone who is using automated bidding in their campaigns may already be applying Smart Bidding to their account, if they’re using Target CPA, Target ROAS and Enhanced CPC.

For those who don’t yet use automated bidding, here’s the lowdown: AdWords provides six types of automated bidding strategies, each crafted to optimize your campaign based on metrics you target. In other words, automated bidding will adjust your bids to optimize toward a desired goal.

In understanding how automated bidding works, it’s also important to wrap your head around auction-time bidding. Rather than setting bids a few times a day, auction-time bidding adjusts bids for each individual auction, taking into consideration contextual signals such as time of day, device and ad creative.

Applying algorithms to three bidding strategies

Smart Bidding simply applies machine learning algorithms to three automated bidding strategies — Target CPA, Target ROAS and Enhanced CPC. These algorithms seek out patterns and similarities in your campaigns to predict how bids will impact conversions or conversion value.

A new and useful feature of Smart Bidding is the ability to set CPA targets by device. If you know that one device drives better results, Target CPA lets you set separate targets per device, based on the actual conversion value of traffic generated by each device.

Put Smart Bidding to work on your campaign

You must have conversion tracking enabled to use Smart Bidding. Google also recommends that advertisers who implement Target CPA have at least 30 conversions tracked in the last 30 days. Similarly, advertisers who use Target ROAS should have at least 50 conversions in the last 30 days.

To activate Smart Bidding, select a campaign or AdGroup, click on the Bid Strategy dropdown and select Change bid strategy.

Inside this interface, select Target CPA, Target ROAS or Enhanced CPC and enter your desired target metric. And voila, Google is now applying its algorithmic mega mind to your AdWords campaign.

What’s not to love about relying on an algorithm to adjust your bids based on how well your campaign is converting? We know it’s not always that straightforward. While the machine is learning, we’ll all be learning along with it. Have you implemented Smart Bidding on some of your campaigns? We’d love to hear how it’s working for you.