Smart Bidding – Five ways machine learning improves PPC advertising

30-second summary:

Smart Bidding is able to optimize for five objectives. Here’s how to use them.

PPC advertising is an integral part of many brands’ online marketing strategies. It can be difficult to get the best out of your PPC bidding, to put it mildly.

Many brands end up bidding too high for keywords, ranking well for a short time but consuming their marketing budget. Others aren’t as competitive and don’t see themselves reaching the conversion rates they desire.
There is a smarter way of bidding. Google’s Smart Bidding options are easily accessible via Google Ads and allow you to quickly see campaign results while still being more hands-off.
Smart Bidding is required to access some of the contextual signals that these advanced algorithms use to drive performance. These factors include local intent, remarketing list, ad characteristics, seasonality, and remarketing lists. You can also use machine learning to optimize your campaigns by applying bidding strategies at portfolio level.
You can let Google’s machine-learning algorithms handle a lot of PPC bidding so you can concentrate more on other marketing and conversion strategies, such as optimizing your landing page designs or copy optimization. Google Ads offers five Smart Bidding options. Here’s how each can help you improve your PPC advertising.

1. Target Return on Adspend (ROAS).

Target ROAS is a way to maximize the ROI of your campaign. It’s a measure of how much revenue you want for every dollar spent on PPC advertising. If your goal is to generate $7 per click, then you have a target ROAS at 350%.
After you have entered your target ROAS, Google Ads will create bidding for cost-per-click campaigns to help you reach this goal.
Target ROAS heavily relies on historical data. Google requires that your campaign has at least 15 conversions in the last 30 days to use Target ROAS to optimize for search ads. There are also minimums for other types of ads.
To achieve the best results, you need to convert 50 times in a period of 30 days before you can implement Target ROAS bidding. This will give the algorithm data to work with.
Google’s internal research shows that this bidding method can boost conversion value by 35% on average

2. Target cost per acquisition (CPA)

Target CPA allows advertisers set a goal for cost per acquisition (CPA), which they want to achieve through PPC advertising campaigns. This parameter is used as an optimization target by Google’s Smart Bidding algorithm. It aims to convert conversions at an average cost equal or lower than your target CPA.
You can increase your sales without having to overspend.
Google will use your Google Ads data to suggest a Target CPA if you have an existing Google Ads account. This guideline is often recommended as it could lead to a crash in your conversion rate if you set a goal significantly lower than your current CPA.
PPC advertising - Smart bidding

Source: KlientBoost
KlientBoost published a case study that showed how switching clients from manual bidding to Target CPA Smart Bidding led to a 107% increase of conversion rates and a 40% decrease in the cost per conversion. Target CPA allows you to convert more clients for less by using your historical data and context signals.

3. Share your impressions

Every PPC campaign will not be focused solely on conversions and sales. As a way to generate demand and awareness for their services and brands, many brands aim to increase search ad impressions.
These ads are often very effective in helping you get new leads. To maximize your impressions on the SERPs, target impression share bidding optimizes your bids.
Smart Bidding allows you to choose whether your ads will appear at the “absolute” top, near the top, or anywhere else on the search results page. These targets can be adjusted by users as they wish. Your ads may appear at the top of some search results and in a sidebar for others.
This strategy can include device optimization. A case study by Metric Theory and Target Impression Share bidding showed that the cost per click on both desktop and mobile devices increased. The campaign resulted in a significant increase in mobile spending of 87% due to the bidding shifting to low-cost mobile users.

PPC advertising - Impression share targeting

Source: Metric Theory
Target impression share bidding, which is based upon real-time data overrides any bid adjustments made to your manual campaign. Mobile bidding can be disabled with one exception.

4. Maximize clicks

Similar to target impression shares, optimizing clicks for Smart Bidding is not always about increasing your conversion rate. This can be a viable bidding strategy in your PPC campaigns.
Maximize Clicks allows Google to adjust bidding to achieve as many clicks as possible within your daily budget. You can increase traffic to your website by increasing it dramatically. This is a great way to collect data to help you prepare for Target ROAS and Target CPA bidding.
You can increase your brand and build lists by attracting more people to your site. This is a great strategy for B2B companies who rely on personalized sales calls.
PPC Hero’s case study found that Maximize Clicks was extremely successful in increasing clicks and reducing campaign costs per click. However, these campaigns were less successful in converting customers.
Maximize Clicks campaigns, like Target Impression Share should be more focused on awareness and leads rather than actual sales.
You can make a few adjustments to this campaign option, including the ability to schedule ads to show (or not) on certain days or times.

5. Maximize Conversions

Maximize Conversions, a smart bidding option that is highly attractive to conversion-focused digital marketers is an appealing choice. This bidding strategy, like Target ROAS and Target CPA, uses historical data as well as contextual cues in order to optimize ad placements.
Maximize Conversions has a big difference. It is less concerned with your acquisition costs and more about volume. This is especially useful if you have a limited budget.
Your company’s early years will help you increase sales volume. Customers will leave reviews and share their opinions via word-of-mouth. Social proof will help you make future campaigns more affordable because of the positive reviews.

Using machine learning for PPC advertising

Source: Google
This strategy does not account for ROI. It simply seeks to spend as much budget as possible to get the most conversions. If you closely track these metrics, this could lead to an increase in your daily or cost per acquisition.
Smarter ways to bid
It can be difficult to balance the task of determining which bid will best achieve your campaign goals while not exceeding your budget. Machine learning can help you achieve stronger results for your campaigns and give you more time to optimize other key elements of advertising.

Smart Bidding: Watch how machine learning can improve PPC advertising Search Engine Watch.

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