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Google Ads Smart Bidding in 2022: What You Need to Know

Updated: Dec 8, 2021

Google Ads Smart Bidding in 2021
Google Ads Smart Bidding in 2022

Over the past year, Google has made several changes to Google Ads, many of which are dramatically changing digital marketing trends in 2021 and will likely continue to do so far into the future of marketing. Since April this year, Google has added some changes to the Smart Bidding feature on Google Ads. While Google Ads remains one of the best things to happen in digital marketing, the new changes come with a need for little adjustments.

In this post, we’ll discuss Google Smart Bidding in detail, including the benefits, cons, and current updates that marketers need to know.

What is Google Ads Smart Bidding?

Smart bidding is a group of automated bid strategies that automatically help you optimize conversions or conversion value for your Google Ads bids. Smart Bidding incorporates machine learning to optimize your bids to maximize conversions and conversion value across your campaign or bidding portfolio.

The Smart Bidding strategies bundled into Google Smart Bidding include Target CPA, Target ROAS, Maximize conversion, and Maximize conversion value. Essentially, you can “set and forget” your Google Ads bid and let Google do the bidding and optimizing based on your set budget. This approach to paid advertising allows newbies and markets who do not have the time to manually set their bids to achieve optimal results from their advertising budgets while also freeing up time for other business activities.

You’ll need to first set up your Google Smart Bidding account, at the end of which is a learning period. Google gathers information about your target audience based on your settings, then uses this info to optimize targeting your audience. The data includes the users’ device, location, time of day, browser, language, age, and more.

Smart Bidding Strategies

Here are the four main Smart Bidding strategies and the specific conversion goal you can use them for.

1. Maximize Conversions

With this strategy, you can tell Google Smart Bidding to get you as many conversions as possible. It is designed to get you the maximum number of conversions using your set ad budget and your maximum daily budget. The algorithm chooses the cost-per-click (CPC) bids based on this goal.

With this strategy, you want to enable conversion tracking to allow you to see your cost per conversion (how many conversions you’re winning with your budget). Otherwise, you would be running blind investments, which could amount to waste in the end.

2. Maximize Conversion Value

Rather than focus on just conversions, you can prioritize conversion value using this strategy. This means that your Ads will automatically find an optimal CPC bid for every time your ad appears. Maximize Conversion Value still attempts to use your full daily ad budget, and you can start with this if you are particular about your ad budget.

Google Smart Bidding essentially recognizes that you need to bring in revenue from your ads, and is designed to help you achieve that using the Maximize Conversion Value method.

3. Target CPA (Cost per Acquisition)

To ensure you get the most bang for your buck, you can set a target CPA, which tells Google Smart Bidding to maximize your conversions (downloads, signups, sales, etc.), while keeping your cost per click as low as possible. For this, you need to set a target “cost-per-action.”

This strategy is ideal for either search and display ads, helping you to keep conversion and profitability as high as possible. Essentially, this setup instructs Google to avoid bidding for idle clicks that yield nothing but to go for clicks that yield more sales and desired actions based on the cost you set. Make sure that conversion tracking is set up so you can keep track of your progress.

4. Target ROAS (Return on Ad Spend)

With Target ROAS, you can set up your ad campaign to automatically target an optimal return-on-ad-spend. The strategy predicts the target ROAS then adjusts your keyword bids to optimize for those keywords. Additionally, you can define the min and max limits for the bids based on your budget.

So, instead of focusing on clicks or conversions, you will be optimizing your return or revenue amount by targeting the most profitable bids. You may need to start with a low ROAS before and then gradually increase it as you get a better grip on the process to further boost your ROI.

Benefits of Smart Bidding

  • Smart bidding includes a wide range of signals to tailor bids to users’ unique contexts. These typically include devices, location, time of day, remarketing lists, browser, language, etc.

  • Flexible controls that allow you to set performance targets to drive bidding performance and optimize search bids as you want.

  • Includes transparent reporting and status updates to help you test how well Smart Bidding is working for you. It also helps you monitor activities under your bid strategies.

  • It is automated with AI, so you have more time to concentrate on strategy, analytics, and content.

  • It is good for startups that are still on low advertising budgets.

Cons of Google Ad Smart Bidding

  • Google doesn’t know your business as well you do. It can only perform and optimize your ad bids based on data collected from your setup.

  • Google has a very large pool of data (perhaps the largest amount of user data), but you do not have visibility or control over the data being used

  • Google’s data might not have a good enough profile of your target audience

  • You’re faced with limited campaign goals and reduced budget control.

What Has Changed in 2021?

Google Ads Smart Bidding has undergone many updates in recent years. In 2021, Google tweaked the service a bit and implemented changes that discontinued tROAS and tCPA as separate strategies. In other words, advertisers can no longer create tROAS or tCPA bid strategies in Smart Bidding.

The search engine giant reorganized Smart Bidding by adding tCPA as a new field to the ‘Maximize Conversions’ strategy and tROAS as a new field to the ‘Maximize Conversion Value’ strategy. tCPA and tROAS strategies have now become fully absorbed in ‘Maximize Conversions and Maximize Conversion Value, respectively.

Not much has changed, but in order to stay on track, marketers need to stay apprised of this new update. Now, marketers will have to use a different setting to achieve the same results they’ve always wanted.

Final Thoughts

Google Smart Bidding is ideal for small businesses and marketers who are yet to get the hang of regular PPC campaigns. While Smart Bidding is automatic and produces results, it may not always understand your target audience or how to reach them as well as you do. Furthermore, you also want to be in control of your marketing budget and your cost per click. After all, Google still charges you based on the number of clicks your ad gets.

To learn more about PPC campaigns and maximize your conversion rates, contact us at Mission HR today. Based on our digital marketing expertise, we help businesses like yours successfully implement the best growth strategies for their businesses.

As leading partners in the PEO, HR, payroll, and benefits outsourcing marketplace, we provide result-oriented services for small and medium-sized organizations and government contractors, serving as a trusted partner in integrated human resource compliance, risk management, employee benefits, employment practices liability insurance (EPLI), and payroll processing.


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