Even when starting new Google Ads campaigns, it is recommended to use smart bidding strategies unless there is a specific reason to run on manual bidding. When it comes to small budget accounts, there are benefits as well as limitations to adopting this best practice.
The Four Different Smart Bidding Strategies
Before we dive into the benefits and limitations of smart bidding, it is important to understand what your options are within this strategy. There are four different options you can choose from depending on your specific goals.
- Target CPA (cost per action): When you want to optimize for conversions while also targeting a specific cost per action.
- Target ROAS (return on ad spend): When you care more about profitability than the number of conversions. The majority of ecommerce businesses will opt for Target ROAS.
- Maximize Conversions: Aims to get the highest possible number of conversions while staying within your budget. This strategy is often used when volume is the primary goal.
- Maximize Conversion Value: Tries to get you the highest conversion value using your budget. If you have tiered offerings, this strategy will prioritize the more expensive offering first.
Smart Bidding in Small Accounts: What to Expect
Because small accounts have different budgets and goals than a larger account, there are going to be specific benefits and limitations when using smart bidding:
Benefits
- Data Driven Decisions: Google’s algorithm builds off of millions of signals that help determine user intent and which users to bid higher towards. The smart bidding algorithm will optimize its bidding towards those who are more likely to convert, and less to those who aren’t. We could never come close to bidding that efficiently ourselves.Â
- Saves Time: Using machine learning, smart bidding strategies free up the time that would otherwise be used to manually tweak individual bids.
- Uses Conversion Data to Improve Accuracy: As your account continues to get more conversions, the algorithm learns from your conversion history. Once you gain enough historical data, smart bidding will often outperform manual strategies.
Limitations
- Lack of Conversion Data: Compared to larger accounts, small accounts – especially Lead Gen – can lack sufficient conversion data. Google’s smart bidding algorithms rely heavily on that data to become more efficient. (Google’s recommendation is at least 15 conversions in14 days.)
- Learning Phase: Any account is going to go through a slower learning phase when launching a new campaign using smart bidding if there is a lack of conversion data to build off of. But that learning phase may take significantly longer if you have a small account that doesn’t convert much to begin with. There is a good chance your campaign may get little to no traffic if you choose to start using a strategy like Max Conversions.
*Tip: If this happens, you may need to switch it to Manual CPC to get more traffic and conversions, then switch it back to Max Conversions so the algorithm has something to build off of. - Lack of Control: You won’t have the option to set individual keyword bids, which can be frustrating for those who prefer tighter control within their campaigns.
Smart Bidding, Realistic Expectations
Despite the limitations of smart bidding on smaller accounts, it is still the best choice in most cases. However, it is important to set expectations that the campaign is going to take longer to optimize with the limited conversion data. A smart bidding strategy will save you time and is almost always going to be more effective at driving conversions or conversion value, depending on what bid strategy you use.
