In this article, we’ll explore different Google Ads Smart Bidding strategies, provide examples, and explain when to use and avoid each one depending on your campaign goals.
Here are 5 Google Ads Smart Bidding strategies and what you need to know about each one.
- Target return on ad spend (ROAS)
- Target CPA (Cost per Acquisition)
- Maximize conversions
- Maximize conversion value
- Maximize clicks
Let’s go deeper
1. Target ROAS (Return on Advertising Spend)
Target ROAS (Return on Advertising Spend) aims to generate the highest possible return on your advertising spend by automatically adjusting bids based on the predicted value of each conversion.
This strategy optimizes bids to focus on conversions that generate the most revenue rather than simply increasing the number of conversions. It’s ideal for businesses looking to prioritize revenue generation over conversion volume.
You can’t simply set a high ROAS target and expect to hit it if you haven’t achieved similar performance in the past. Google Ads will suggest a ROAS target based on your historical data. When setting your ROAS target, it’s crucial to choose a realistic goal that’s aligned with your past performance. If you set an achievable ROAS, Google Ads will work to maintain or improve it, using it as a benchmark for future performance.
For example, if Google Ads suggests a 300% ROAS target based on your past results, this means that for every $1 you spend, you aim to generate $3 in revenue. By setting this realistic target, Google Ads will adjust bids to maximize the likelihood of consistently meeting or exceeding that target. However, if your past ROAS is significantly lower, setting an overly ambitious ROAS could result in less traffic and lost opportunities.
When to use:
- eCommerce Sales: If your goal is to maximize sales value while maintaining a profitable ROI, Target ROAS helps you focus on the conversions that generate the most value.
- Profitability-oriented campaigns: When your primary goal is revenue generation and you can attribute value to each conversion.
When to avoid it:
If you’re not sure of the value of each conversion or if you have a low volume of conversions, it may not work as expected.
2. Target CPA (Cost per acquisition)
Target CPA (Cost Per Acquisition) adjusts bids to help you get as many conversions as possible at a specific cost per acquisition or lower. The system automatically adjusts bids to try to hit your target CPA, regardless of auction competition or time of day. It’s designed to control how much you pay per conversion while maximizing the number of conversions.
As with ROAS, you can’t just set an arbitrary CPA target if you haven’t hit that cost before. Google Ads uses your historical performance to suggest a realistic CPA. Setting an unrealistic target can limit traffic and conversions. Your CPA target should be something achievable based on past results, allowing Google Ads to optimize bids and help you maintain or improve that target.
For example, if your past campaigns have achieved a CPA of $50, setting a target CPA around that amount is ideal. Google Ads will automatically adjust your bids to try to get conversions at $50 or less. If you set a CPA that is too low compared to your past performance, it may result in fewer impressions or clicks because the system won’t bid enough to compete for valuable traffic.
When to use:
- Lead Generation: If your goal is to acquire new leads at a specific cost (e.g. filling out a contact form or signing up for a newsletter), Target CPA helps you control costs while driving conversions.
- Tight budget control: When you have a clear understanding of how much a lead is worth to your business and need consistent costs for each conversion.
When to avoid it:
If conversion volume is too low, Target CPA may not find enough data to optimize bids effectively.
3. Maximize conversions
Maximize conversions is an automated strategy that adjusts bids to get the most conversions possible within your daily budget. Instead of focusing on controlling the cost per conversion, this strategy prioritizes generating the most conversions, even if this means variable costs for each conversion.
For example, if you have a daily budget of $200 and your goal is to generate as many leads or sales as possible, Maximize Conversions will automatically adjust your bids to capture as many conversions as possible within that budget. If your average cost per conversion is $25, the strategy will aim to get around eight conversions in a day, but if a lower-cost opportunity arises, it could be adjusted to get even more conversions with the same budget.
When to use:
- Limited Budget: When you want to spend your entire budget to get as many conversions as possible, Maximize Conversions works well.
- High Volume Goals: When the goal is to increase the volume of leads, sales or registrations without focusing on cost per acquisition.
When to avoid it:
If your goal is profitability or you have strict CPA or ROAS goals, Maximize Conversions might not give you the control you need over costs.
4. Maximize conversion value
This strategy adjusts bids to maximize the total value of conversions (e.g. sales revenue) rather than focusing on the number of conversions. Essentially, you adjust your bids based on the potential revenue each conversion can generate, rather than simply increasing conversion volume. It’s ideal for campaigns that aim to maximize overall revenue rather than just drive more conversions.
For example, if you’re running an eCommerce campaign with a variety of product prices, from $10 items to $500 products, when using the Maximize conversion value strategy, Google Ads will prioritize bids for users who are most likely to purchase higher-value products, with the goal of increasing your overall revenue.
When to use:
- Focus on sales value: If you are running eCommerce campaigns and want to prioritize high-value conversions, this strategy helps generate more revenue.
- Dynamic Product or Service Promotion: When conversion values vary significantly between products or services, this strategy optimizes based on value.
When to avoid it:
If you don’t track or assign values to your conversions, this strategy won’t work for you.
5. Maximize clicks
Maximize Clicks is an automated bidding strategy designed to drive as much traffic to your website as possible within a specified daily budget. Basically, you set your bids to the highest CPC (Cost Per Click) possible within that budget, with the goal of getting as many clicks as possible. This strategy doesn’t focus on driving conversions or sales, but is ideal for increasing the total number of clicks and driving traffic.
For example, let’s say you have a daily budget of $100 and your average CPC is $2. Using Maximize Clicks, Google Ads will adjust your bids to make sure you get as many clicks as possible within that $100 budget, which could mean 50 clicks in a day. This strategy is perfect if you’re running a brand awareness campaign and want to drive as many visits to your website as possible.
When to use:
- Brand Awareness: If your goal is to drive traffic and increase brand awareness rather than focusing on conversions, Maximize Clicks is ideal.
- Low-Cost Traffic: When your primary goal is to generate as much traffic as possible, especially in the awareness phase of your marketing funnel.
When to avoid it:
If conversions, sales or lead generation are your primary goals, other strategies such as Target CPA or Maximize Conversions would be more appropriate.
How to Make Your Google Ads Smart Bidding Strategies Work
Choosing the right Google Ads Smart Bidding strategy is crucial to achieving your campaign goals. Whether you focus on controlling costs, maximizing revenue, or driving traffic, Google Ads Smart Bidding options offer a range of automated solutions to fit your needs.
- Use Target CPA when you want to control your cost per acquisition.
- Choose Target ROAS to focus on maximizing the value of each conversion.
- Implement Maximize Conversions if volume is your top priority, without strict cost control.
- Choose Maximize conversion value if revenue is more important than the number of conversions.
- Choose Maximize Clicks to build brand awareness and increase traffic to your website.
By understanding these strategies and when to apply them, you can leverage Google automation to improve your campaign performance and achieve specific business goals.
