InspireIf you're running Google Ads campaigns for your business, you've probably noticed that Google is heavily pushing advertisers towards automated bidding strategies. The idea is pretty straightforward: Google’s AI-driven Smart Bidding can help you get better results while saving you from micromanaging your campaigns.
Sounds great, right? Let Google’s machine learning do the heavy lifting, optimize your campaigns towards your marketing goals, and find the users most likely to click or convert.
However, Smart Bidding relies on data to ensure ads reach users most likely to meet our goals. This includes factors like user device, location, time of day, demographics, past behavior, and keyword intent.
For example, Smart Bidding might increase bids for users on mobile devices during peak times, or lower bids for users in locations with a lower conversion rate. Similarly, demographic data can be used to adjust bids to target users who are more likely to be interested in your product or service.
It follows that the more clicks and conversions you have, the more data the algorithms have to work with in spotting relevant bidding signals.
So, what if you're a smaller business that doesn't drive a lot of traffic, or a larger business selling high-value products that don't rely on a high volume of conversions? With less data to work with, can Smart Bidding still be effective?
It might be challenging, particularly if you’re optimising for conversions rather than just clicks, but here are some things I’ve learned about making conversion-based Smart Bidding work for you.
1. Use micro conversions to fuel the algorithm
Identifying the primary points of conversion on your website is usually fairly straightforward. For most of us, it will be a mix of sales, lead form submissions, or phone calls. Assuming you are effectively tracking these interactions, Google suggests Smart Bidding requires a minimum of 15 conversions a month at a campaign level to work effectively.
When primary conversions are few and far between, using micro conversions is an excellent way to give the algorithm more data points to work with. Micro conversions are smaller, valuable actions that indicate user interest.
For this you need to understand user journeys on site and identify interactions that indicate a genuine interest in your offer. This might include downloading a PDF, signing up for a newsletter, creating an account or adding products to a basket.
For example, on our Training site, we found that the quality of leads coming through live chat was similar to those coming through our main contact form.
Creating a Key Event in GA4 to measure these interactions and passing the data to Google Ads has enabled us to increase our attributed conversions by around 30%.
2. Enable Enhanced Conversions in Google Analytics
Enhanced conversions in Google Analytics can be a game-changer for businesses with limited conversion data. By using additional first-party data, you can improve the accuracy of your conversion tracking and give Smart Bidding better signals to work with. This feature enables better attribution, helping Google Ads understand the touchpoints leading to conversions and allowing the algorithm to be more effective.
If you are using lead gen campaigns to drive offline sales, enabling Enhanced Conversions for Leads can also be a great way to increase conversions attributed to your Ad campaigns.
This process allows for you to pass hashed Personally Identifiable Information from lead forms to Google, which they then use to match customers when you feed offline sales back into Google Ads.
3. Be cautious with broad match keywords
Recommendations to add or switch to broad match keywords is something you’ve almost certainly encountered in Google Ads.
Using broad match keywords enables Google to identify potential customers through AI and data signals, even if their search does not suggest they are looking for exactly what you are selling in that moment.
For example, if somebody searches for 'google analytics’, the term does not necessarily suggest they would interested in one of our GA4 training courses. However, what if that user had previously searched for and visited pages selling competitors' courses?
In this scenario, they now seem like a much more likely prospect and somebody Google's algortihms may decide to bid for. However, we may have missed them using only exact match targeting.
The principle is sound here - Google AI and Smart Bidding can help us to identify a much wider base of potential customers than exact match. However, AI relies on data and the more conversion signals you have the more effective broad match campaigns are likely to be.
Broad match keywords can be a bit risky when conversion data is limited, and can be a good way to spend budget inefficiently. The key here is to use broad match keywords carefully. With lower budgets, or lower conversion numbers, I’d suggest starting with exact or phrase match targeting and then test broad match on a limited basis as your campaigns mature. However, keep a close eye on your search terms report to make sure you’re not wasting money on irrelevant clicks that are not converting. Make good use of negative keywords to filter out searches you know are unlikely to convert.
4. Don't pause campaigns as a way to control budget
If budgets are tight it can be tempting to pause campaigns towards the end of the month or the year if spend is reaching your limits. The algorithm relies on a steady stream of data to make good decisions, and pausing campaigns disrupts that flow and can send your campaigns back into a period of learning.
It’s important to budget effectively to avoid being forced to pause campaigns. Work out your maximum spend for the month or year and calculate your daily budget from there for each campaign. Google will then average out your daily spend to ensure that you are not overspending each month.
5. Take maximum advantage of sitelinks and ad extensions
Sitelinks and other ad extensions are often underused, but they can be super helpful, especially in low-conversion environments. Adding extensions like sitelinks, callouts, and structured snippets can improve your ad’s visibility, boost click-through rates, and give users more reasons to interact with your ad.
The more clicks and interactions you generate, the more data Smart Bidding has to optimise towards conversions. You’ll also increase Quality Score, further enhancing campaign performance in the future.
6. Be generous with your CPA targets
One of the lessons I’ve learned is that being too conservative with CPA in low conversion campaigns can severely limit Smart Bidding’s effectiveness. Low data volume means the algorithm needs more flexibility to test and learn. By setting a higher target CPA at first, you give Smart Bidding the breathing room it needs to explore and find profitable opportunities.
The downside of this is that, in the short term, your cost per conversion may increase. As your campaigns build data over time, keep an eye on your actual ‘cost / conv.’ in Google Ads at a campaign level.
7. Avoid making too many significant changes at once
Ongoing optimisation is a key part of day-to-day management in Google Ads; however making too many significant changes to key elements can seriously disrupt the flow of your campaigns.
It’s best to take smaller incremental steps when making changes to settings that impact the bidding process.
For example, if you want to change campaign budgets or target CPAs by 50%, it’s better to increase/decrease by 10-15% every couple of weeks until you hit your targets. This allows the bidding algorithms to adapt over time, rather than shocking the system back into a learning process.
8. Consider value-based bidding
Rather than optimising towards conversions or a target CPA, Google is increasingly recommending moving towards value-based bidding
Rather than the number of conversions, Value-based bidding allows you to focus on maximizing the overall value of the conversions your campaigns generate. With the help of Google's AI, bids are automatically optimized in real-time to target individuals who are more likely to contribute higher value to your business.
This is simple enough if you’re a pure e-commerce business where sales are your primary point of conversion. The complexity comes for businesses that are driving sales offline and are using micro conversions that have no obvious direct revenue attached to them. Value-based bidding requires you to assign a monetary value to each conversion.
Value-based bidding is a next-level strategy that requires a solid measurement foundation and a firm understanding of the customer journey. For this reason, it should be approached alongside your analytics professionals.
In conclusion
Of course, Smart Bidding isn't suitable for everyone. If you are working with micro budgets where meeting the minimum required conversions is challenging, sticking with Manual Bidding may be a better option, especially with a focus on securing high-quality clicks.
However, Conversion-based Smart Bidding can be highly effective, even for businesses with lower conversion volumes, if you take the right approach. Maximising conversion data is key, while careful and measured management of budgets, CPAs and campaign settings can help the algorithm learn and adapt effectively. Remember to give the AI room to test and optimize, and leverage ad extensions and the right keyword targeting to boost performance. Finally, consider moving towards a value-based bidding strategy to guide the algorithms towards the actions that drive the most profitable returns.
If you need further assistance in navigating Google Ads or want to refine your skills, why not check out our Google Ads Fundamentals course or our new course on AI Powered Performance.
Chris Hutty
