For a long time, advertisers have looked askance at Google's Smart Bidding strategies. However, the constant improvement in these algorithms is turning them into a lever that can help you achieve profitable growth in your online business.
It's been a long time since Google implemented Smart Bidding strategies and for a long time most advertisers have viewed them with suspicion.
In addition, using broad match keywords was seen as a bad practice, as it drove too much irrelevant traffic to the website, with few conversions.
However, the constant improvement in bidding algorithms, as well as recent changes in keyword modifiers, along with the shift to an account management system focused on simpler structures, are turning this strategy into a growth lever for both eCommerce and lead generation.
What really is Smart Bidding?
When a user search occurs, it generates, among other processes, an auction (bid) in which advertisers participate with bids in which they determine the maximum money they are willing to pay per click, among other factors.
Here we might think that setting a certain CPC may be enough to guarantee a certain number of auctions won. However, keyword prices are not fixed and fluctuate in real time, just like electricity prices.
To give an example, let's think about food delivery.
When do you get the most take-out orders? Probably on weekends, certainly more if the weather is bad. Then, attracted by the potential profits, more restaurants will be willing to bid more to appear in the ads. This will cause CPC levels to rise dramatically, and if the price we were willing to pay was lower, we won't appear in the ads. This is where Smart Bidding comes into play.
Smart Bidding automates all the bids of our campaign to achieve our goals through conversions. That is, we tell Google what we want to achieve, whether orders, leads or any other type of conversion, and we establish how we want to achieve it, and we forget about raising and lowering CPCs to appear in auctions.
The most interesting bidding strategies in general are:
Maximize conversions, where we will get the maximum number of conversions with the specified budget.
Target CPA, where conversions are achieved as long as the target cost per convention is not exceeded.
Maximize conversion value, where we try to achieve the highest conversion value within the budget.
Target ROAS: where you try to achieve the highest conversion value through ROAS.
In this way we forget about the CPC manually, we leave it to the system and we work with the real conversion goals of the business.
How is the bidding determined then?
Individually, for each auction, Google Ads starts adjusting our CPC based on 3 levels:
Learning Algorithms: based on time of day, ad position, ad shown, user location, browser or operating system.
Dimensions: Based on match type, device, location and remarketing list membership.
Learning Query: High traffic words generate learnings that are applied to low volume words to get results as quickly as possible.
In this way, smart bidding helps us to obtain the best possible results through fully automated bids, as they are unique to each auction and use data and signals that are impossible for a human to manage.
By using strategies based on conversion value (Target CPA, Target ROAS and maximizing conversion value) we can keep our cost or profit at desirable levels for the business, beyond bidding that only cares about the number of conversions.
Keywords, broad match is key
Until very recently, using keywords in broad match was considered by the entire Google community as malpractice, since it generated very poor quality traffic.
However, with the constant improvements in Smart Bidding, the elimination of the Modified Broad Match and the improvement in the Broad Match, make the latter the protagonist to obtain the best possible results.
The improvements that Broad Concordance has been receiving are vital to optimizing its performance:
Improved Variation Relevance: it will trigger the same queries as exact and phrase matches.
It considers additional signals, such as user location and recent search activity and landing page to ensure that searches are relevant.
Holistic combinations and improved keyword intent, based on all keywords in the ad group.
In addition, it receives unique signals that other concordances do not.
Thus, using Broad Matching brings us more benefits and information than in the past and proves far superior to phrase and exact matches; as it improves efficiency by avoiding clicks on variations that don't work. It saves time by avoiding long lists of keywords created by hand, expands reach and coverage, and feeds the system with relevant signals to understand keyword-related search intent.
Bringing it all together: Expanding reach while maintaining cost targets with smart bidding and broad matching
Until now, the options we had were either to use broad matches with non-value based bidding strategies, or to use keywords in phrase or exact matches; with the drawbacks of generating a lot of non-relevant traffic in the former, or choking the campaigns too much so that they didn't get the desired number of conversions.
However, using this combination of broad keywords and value-based Smart Bidding, we achieve these results by combining the best features of both tools:
Accurate predictions of how different bids can affect conversions and value.
Capturing high-value searches while maintaining cost targets.
Smart Bidding will only bid on relevant searches, ensuring relevance with broad matching.
Simplified account structure.
Real-time relevant data will be fed to algorithms for each particular search.
Use machine learning to optimize conversions and conversion value for each auction.
The real challenge
So far, we have explained the ideal situation where we expand search with broad match keywords and maintain efficiency with value-based bidding strategies. However, this must be a state to get to and the real difficulty is in providing the algorithms with the right data to achieve the right growth and the right signals we need.
To do this, we must perfectly configure:
The measurement: Our conversions or value events must be perfectly implemented in our account, including their monetary value, such as the attribution dates.
The attribution model: It will determine to a greater or lesser degree the readiness for account growth.
Audiences: Will represent the target audiences that will generate the most value for us.
Creativities: We will determine them through the study of the best ads.
Account restructuring; It will allow a simplification of management and a results-based approach to business objectives.
Why work with us?
Rocket has a multidisciplinary team, expert in all aspects necessary to carefully plan and carry out a complete and effective online campaign in order to boost your business sales on all digital platforms. With a team with extensive experience in leading companies such as Mango, Stradivarius or Desigual, Rocket adapts to the needs of each client to design a plan focused on improving the conversion rate of your website.
If you are thinking of making your business grow through Google Ads and you want Rocket Digital experts to help you implement these strategies to help you achieve your goals do not hesitate to contact us!
