After switching to Google Smart Bidding, Online dating site March.com saw an uplift of 145% for their online registrations within the first 20 days, but which one is right for you?
Google Smart Bidding strategies use machine learning to access exclusive and unique contextual signals to set the right bid during auction time bidding. On top of signals such as the time of day, presence on a remarketing list, users device and location, smart bidding also has access to unique signals including users operating systems, web browsers, language settings and much more to optimise bids effectively and capture unique context across users and platforms.
We all know data is king within the realms of Google Ads. It allows us to make smarter decisions, understand consumer trends, target the right audiences and produce data-driven results for our paid media campaigns.
However, with so much data to analyse these days it is no wonder that smart bidding strategies have become so popular with paid media marketers. Smart bidding strategies such as Maximise Conversions, Maximise Conversion Value, Target CPA (target cost-per-action) and Target ROAS (return on ad spend) allow you to spend less time on the wrong keywords and more time finding valuable conversions and revenue elsewhere.
Trying to manage campaigns with hundreds to thousands of keywords and optimising them across multiple consumer touchpoints like device, location, and match type can lead to human error, which can cost you revenue and performance. This is particularly true due to the dynamic nature of auction time bidding where the right bid can be a constantly moving target.
But which smart bidding strategy is the right fit for your paid media campaigns?
Don’t panic! This article will shed light on four different bidding strategies and consider which smart bidding strategy is the right fit for your marketing objectives.
Smart Bidding Strategies
Four key smart bidding strategies to consider are;
- Maximise Conversions
- Target CPA
- Maximise Conversion Value
- Target ROAS
1. Maximise Conversions
When to Use Maximise Conversions
If your goal is to maximise the number of conversions your campaign produces, then using Maximise Conversions is the right bidding strategy for you. It uses exclusive, auction-time bidding capabilities to automatically set the right bid for each auction and help you attain the most conversions without having to increase your budget.
“We wanted to increase the conversion volume of our high-priority campaigns without raising budgets. In our first test campaign, we saw a 73% increase in conversion volume, 59% increase in CVR , and 42% decrease in CPA, with no change in our spending.”Chris LaRoche, PPC Team Lead, Seer Interactive
Our Key Recommendations:
- Make sure you are already tracking conversions that are important to your business such as; event registrations, lead form registrations or event brochure downloads.
- Maximise Conversions campaigns should have their own allocated budget instead of being part of a shared budget. This bidding strategy will try to use the full campaign budget. This means that if your campaign using Maximise Conversions is part of a shared budget, then Google will spend the full shared budget, and not just the campaign budget using the Maximise Conversions bid strategy.
There is also an option to set a Target CPA within the Maximise Conversion bid strategy. See below for a full breakdown of Target CPA.
2. Target CPA
When to Use Target CPA
Target CPA bid option will predict how profitable a search query is and try to get as many conversions as possible within your Target CPA. Set a Target CPA within Maximise Conversion bid strategy.
You should use Target CPA when you want to get as many conversions as possible and you have a strict Target CPA you would like to achieve.
This is also a great bidding strategy if your event tickets have no associated costs or if you are trying to drive leads or exhibitor/visitor registraion interest.
To determine what your Target CPA should be, take a look at the historic CPA over the last 30 days and set your target based on that data. It is always best practice to give the bidding strategy enough wiggle room to optimise effectively.
For example, if you find out your historic CPA over 30 days is $50 then you should set your target 10% or 20% higher to give the algorithms room to function properly. You can then slowly lower this as performance improves.
Our Key Recommendations:
- Make sure you are not constrained by budget. Having a constrained budget is not ideal for this bidding strategy as you will limit the abilities of the algorithm. For instance, if your historic CPA is $50 but you only have a daily budget of $50, then this is not the bidding strategy for you. Instead, use Maximise Conversions. You want your daily budget to be at least 2 to 5 times higher than your Target CPA.
- You have to generate at least 15 conversions in the last 30 days before switching to a Target CPA bidding strategy. This bidding strategy needs to be backed by conversion data to work properly. Without any conversion data, the system will not understand what the most profitable search queries are and could lead to a downturn in overall campaign performance.
- Finally, we recommend setting up an A/B split test of 50% to test if this bidding strategy will perform better than your original campaign. This allows you to understand how Target CPA compares to your original bidding strategy.
3. Maximise Conversion Value
Maximise Conversion Value not only takes into account conversions but also conversion value. It will try to optimise bids to increase sales revenue and profit margins.
This is a great bid strategy option if your event tickets have an associated cost and you want to generate as much revenue from ticket sales at a profitable ROI. You should also use it if you have multiple tickets with different prices and want to weigh each individual conversion based on its total value.
You also have an option to set a Target ROAS when using Maximise Conversion Value, which we explain in more detail below.
4. Target ROAS
Target ROAS is a Google Ads Smart Bidding option within the Maximise Conversion Value bidding strategy that uses auction-time bidding capabilities to automatically set the right bid for each auction and help you get the highest conversion value possible at your Target ROAS.
Set a target return on ad spend within Maximise Conversion Bidding Strategy:
Happy Socks used target ROAS to grow to 20+ markets with minimal time spent on bidding and a 30% increase in ROAS and a 10% increase in sales.
Our Key Recommendations:
- You must be tracking conversions or conversion value. You can either use the same conversion value for each conversion or use different values for each conversion.
- Your campaign has at least 15 conversions in the last 30 days that are passing conversion values through Google Ads
- To scale your campaigns with target ROAS, set a ROAS target that is 200% lower than your historical ROAS on your account. This will give the smart bidding strategy enough freedom and make sure you are not limiting the campaign during auction time bidding.
It is important to identify the smart bidding strategies that work best for you and align most closely with your marketing goals.
Have questions? Book a call with the Tag Digital team here.
Written by: Euan Adam, PPC Specialist at Tag Digital
5 May 2022