Performance

Smart Bidding

Also known as: automated bidding · Target CPA · Target ROAS

Definition

Smart Bidding is Google's name for bid strategies that use its AI to set each bid at auction time, aiming for conversions or conversion value. The strategies include Target CPA, Target ROAS, maximise conversions and maximise conversion value.

The system optimises for whatever is counted, so the quality of the conversion data caps the quality of the result. Google's guidance is to evaluate results over a stretch that has produced at least 30 conversions, often a month or more, and at least 50 for Target ROAS. That is advice on judging results, not a minimum for switching it on: Google says you can start without history, provided conversion tracking is working.

Set targets from the economics, not from last month's average. A Target CPA above your break-even CPA buys customers at a loss, very efficiently. Small accounts, including many B2B and niche-service advertisers, may not reach 30 conversions a month in one campaign. Consolidate campaigns by offer and language instead of splitting them by keyword, or optimise toward a higher-volume step such as qualified leads while volume builds.

More in Performance

A/B testing

A/B testing compares two versions of one element, such as a headline, an offer or a page, by showing each to a randomly split share of traffic at the same time and measuring which produces more conversions. It needs enough traffic and one change at a time.

Ad fatigue

Ad fatigue is the decline in an ad's performance as the same people see it repeatedly, usually visible as rising frequency and falling click-through rate before cost per result climbs. The remedy is fresh creative or a wider audience, not a bigger budget.

Ad Rank

Ad Rank is the value Google Ads calculates in each auction to decide whether an ad is eligible to show and where it sits against others. It combines the bid with ad and landing page quality, minimum thresholds, competition, search context and the expected impact of assets.