Why Google Ads Automated Smart Bidding Doesn’t Work For You

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Video Transcript: Why Google Ads Automated Smart Bidding Doesn’t Work For You

You’ve gone over to Google Ads, you’ve set up a PPC campaign that’s been running on manual CPC. You’ve transitioned over to a smart bidding strategy like Target CPA or Target return on advertising spend or even Target impressions, but your performance for your campaign goes completely downhill. In this video, we’re going to explain why sometimes smart bidding strategies can cause your campaign performance to dip, and the reasons behind that, and what you should and shouldn’t be doing when it comes to setting up a smart bidding strategy. You’ll learn all of that and more coming up.

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Hey, guys. Darren Taylor of thebigmarketer.com here and my job is to make you a better marketer now. If that sounds up your street, you should consider subscribing to this channel. In this video, we are explaining why smart bidding strategies when you move from manual CPC over to a smart bidding strategy like Target CPA, for example, why your campaign performance can dip. Let’s explore those reasons but before we do that, I’ve already made a ton of videos around bidding strategies on Google Ads. Now, if you want help with Target CPA bidding, Target return on advertising spend, or Target impression share, or all of the Google Ads smart bidding strategies, check out the other videos across my channel as well and be sure to check those out because in those videos, I explain a lot about bidding strategies in general. Now I’ve got that out of the way, let’s go into the reason number one of why smart bidding strategies often fail on Google Ads.

The reason your smart bidding strategy might be failing when moving away from manual CPC is because you haven’t given it enough time. Now, if you’ve set up a manual CPC campaign, you’ve done all your bid optimizations, you’ve tweaked things, and you’ve used the data points available in the reporting within Google Ads. Now, a smart bidding strategy will use data points that go way beyond what you can find in a Google Ads account, and there’s going to be a period of adjustment. Google isn’t going to know instantly what’s going to work and what’s not going to work. There’s going to be a learning period of time. In that time, Google is going to try and tweak the bids and understand the performance of your campaign in order to find out where it needs to sit for your target strategy.

With that in mind, it also makes sense to not just be, I guess, more patient with your campaigns but also be persistent as well. Smart bidding might not work instantaneously. It’s something you should give enough time to work. If you’re panicking because on day one, you don’t suddenly turn on a tap and all of your CPAs come down or your impressions go up or whatever the strategy is you might be using, give it some time to do its thing because it needs enough time to gather enough data in order to improve the performance of your campaign. If you’re watching this video because you’re impatient and you’ve switched it over and you haven’t left much time, give it a little bit more time.

The second reason your smart bidding strategy might be failing is because you don’t get enough conversions in your accounts. Now, what does that mean? Well, essentially it goes back to data. Giving Google enough data points in order to make decisions with its bidding strategies is important. If you have very few conversions in your accounts, it means you have very little conversion data. When you have very little conversion data, Google struggles to find out what’s actually driving your conversion. Ideally, Google states you need at least 30 conversions in your account in the last 30 days for this strategy to work but even with that said, 30 isn’t quite enough to get great results out of this kind of bidding strategies and smart bidding, so you need a lot more conversions. Ideally, I would say, you need at least 50 conversions per month in order to take advantage of smart bidding.

Even then, I would say, if you got 100, then it will get more accurate. The more conversion data you get, the more accurate it becomes. If you do see your campaigns are low conversion and low volume, then what you will find is smart bidding might not work for you. Another key reason that smart bidding might not be the best strategy for you is because you have so few keywords in your accounts. Now, I know that some advertisers have very small campaigns with very targeted niches that don’t get much search volume. Of course, my previous points was about the low volume of conversions but in addition to that, low volume of search anyway is going to have a negative impact. Not just low volume of search but low sophistication of the account.

If your account has very few keywords in, if you’ve got three keywords in your account because you’re targeting something very specific and is a very small campaign then, by moving to a smart bidding strategy, it’s still not giving Google much to work with. Google won’t be able to do much more than what you could do yourself, so you might not see great results from doing that. If you’re on manual CPC and you move over to a smart bidding with a very small campaign, you might see little or no difference. Be sure to realize that the more data and the more volume you have in your accounts, the better smart bidding will work for you. You’re probably thinking around all of these negatives I’m mentioning, should you even consider using a smart bidding strategy if your manual CPC campaigns are working really well for you?

Now, even myself, I know in some instances, I’ve moved over from a manual CPC campaign over to a smart bidding campaign and I’ve seen little or no difference in results for some accounts I’ve worked on. That is a key thing to remember, it doesn’t work every single time. It’s not a failsafe. It’s not a get-out-of-jail card. Moving to a target strategy, for example, a target CPA strategy or something along those lines, it’s not a get-out-of-jail-for-free card. You are going to have to work with it. You’re going to have to be persistent and you’re going to have to have the right kind of campaign data as well because not having the right volume of data or size of accounts is going to have a negative impact on your campaigns moving to smart bidding.

Finally, one more thing to remember when it comes to smart bidding is that if you make changes to your account frequently, for example, I don’t know, if you’re selling umbrellas and it starts raining and you automate your bids to increase when it starts raining because you notice you might sell more products, then if you make frequent changes to your account, it can negatively impact smart bidding because as soon as you make a manual adjustments to your account, whether that’s adding or removing keywords, changing your scheduling, anything along those lines, will mean Google’s machine learning will have to start again and understand what the impact of the changes you’ve made on the account are going to be on the strategy.

For any reason, if you make any adjustments to your campaign, for example, if you have budget restrictions and you need to restrict your budget because you need to make sure you last a certain period of time, maybe it’s to do with your sales cycle, maybe it’s to do with the overall budgets that you have for your business. If you make changes or pause your campaigns or adjust your budgets along those lines, then that will mean the machine learning will have to start again and understand what the impact will be. If you make regular adjustments, remember that smart bidding might not necessarily be for your campaigns.

Now you guys should understand why using a smart bidding strategy may not always work as you expected it to but overall, it should be something you should transition to because ultimately, you can’t beat Google in understanding and learning the factors that affects your campaigns. In fact, you can’t even see the data Google uses to affect your campaign. That’s the reason you should transition to a smart bidding strategy, but as I said in this video, there are some specific scenarios it won’t work for you, and I’d love to hear about them in the comments below. Let me know if you’ve had any issues transitioning from manual CPC over to a smart bidding strategy. I’ll be happy to discuss it with you down there. Don’t forget to check out the other videos across my channel. Even more important than that, don’t forget to subscribe. I’ll see you guys on my very next video.