Smart Bidding Strategies: How to Automate for Better Results

Smart Bidding in Google Ads has changed how advertisers manage their campaigns. Instead of guessing which bid amount works best, Smart Bidding uses machine learning to automatically set bids that help achieve your goals. This article explains what Smart Bidding is, its key types, benefits, and how you can use it to improve performance and get better return on investment (ROI).

What is Smart Bidding?

Smart Bidding is a set of automated bid strategies in Google Ads that use real-time data and AI to improve campaign performance. These strategies adjust bids for every auction — known as “auction-time bidding” — by analysing many signals, such as:

• Device
  
• Location
  
• Time of day
  
• User behaviour
  
• Browsing history
  

It’s available for Search, Shopping, and some Display and YouTube campaigns (Google, 2024a).

Types of Smart Bidding Strategies

There are five main types of Smart Bidding strategies in Google Ads:

1. Target CPA (Cost Per Acquisition)
   Google sets bids to get as many conversions as possible at or below a target cost per action. Best for lead generation.
   
2. Target ROAS (Return on Ad Spend)
   Google tries to get as much conversion value as possible based on your target return. Ideal for e-commerce.
   
3. Maximize Conversions
   Bids are automatically adjusted to get the most conversions within your budget.
   
4. Maximize Conversion Value
   Focuses on getting the highest total value (like revenue) rather than just the number of conversions.
   
5. Enhanced CPC (Cost Per Click)
   Semi-automated — adjusts manual bids to increase conversions while keeping your set CPC limit (Google, 2024a).
   

Benefits of Smart Bidding

1. Time-Saving
   No need to manually adjust bids across campaigns.
   
2. Real-Time Signals
   Google uses multiple signals in real-time to optimize bids better than human guesswork.
   
3. Improved Performance
   Studies show Smart Bidding can improve conversion rates and lower CPA. For example, a Google study found that Target CPA strategies reduced CPA by up to 20% (Google, 2024a).
   
4. Scalability
   Easy to manage large accounts with multiple campaigns.
   
5. Better ROI
   Smart Bidding aligns bids with your business goals, helping increase profits.
   

How to Choose the Right Strategy

Business Goal	Recommended Smart Bidding Strategy
Get more leads	Target CPA or Maximize Conversions
Drive online sales	Target ROAS or Maximize Conversion Value
Promote awareness	Enhanced CPC (with manual control)

Tip: Start with “Maximize Conversions” if you have no past data. Switch to Target CPA or ROAS once you collect enough conversions (usually 30+ per month) (Google, 2024a).

How to Set Up Smart Bidding

1. Create or Edit a Campaign
   
2. Choose a Bid Strategy
   
3. Set Your Budget
   
4. Track Conversions: Make sure conversion tracking is active and accurate.
   
5. Add Target CPA/ROAS (if applicable)
   

For full setup instructions, visit Google Ads Help (Google, 2024a).

Best Practices for Success

1. Set Realistic Targets
   Don’t aim too low on CPA or too high on ROAS. Start with average past performance.
   
2. Give It Time to Learn
   Let campaigns run for at least 2–3 weeks before making big changes.
   
3. Use Broad Match with Smart Bidding
   Broad match keywords paired with Smart Bidding can improve performance by letting Google find more relevant searches (Google, 2024a).
   
4. Use First-Party Data
   Upload customer lists via tools like Google Ads Customer Match (Google, 2024b).
   
5. Review Bid Strategy Reports
   Check performance over time to refine strategy. Go to Tools > Bid Strategies > Portfolio Strategy Reports.
   

Case Study: L’Oréal

L’Oréal adopted Smart Bidding and saw great results:

• Used Target ROAS for product sales
  
• Reduced CPA by 33%
  
• Increased conversion value by 70%
  

(Source: Think with Google, 2023)

Common Mistakes to Avoid

1. Changing Targets Too Often
   Allow time for the system to learn and adjust.
   
2. Using Wrong Conversion Actions
   Make sure you’re tracking valuable actions — not just clicks.
   
3. Setting Unrealistic Goals
   Pushing the algorithm too hard too fast can hurt performance.
   
4. Ignoring Budget Allocation
   Make sure budget supports your bidding goals — e.g., Target ROAS needs enough spend to learn.
   

References

Google. (2024a). About Smart Bidding. Google Ads Help. https://support.google.com/google-ads/answer/2979071?hl=en

Google. (2024b). Customer Match: Reach your customers with first-party data. Google Ads Help. https://support.google.com/google-ads/answer/6379332?hl=en

Think with Google. (2023). How L’Oréal uses Smart Bidding to grow online sales. https://www.thinkwithgoogle.com/intl/en-apac/marketing-strategies/search/smart-bidding-case-study/