Today I will be covering your question and answers. There's been a few questions that were sent across to me.
Okay. The first question is about Google Ads Smart Bidding. It is, "I'm very confused about Smart Bidding. When, why, and how to use. Please can you explain this to me? Thank you for your videos. They are great to help me." Thank you for logging in watching the videos and also sending me this question. Smart Bidding can be a very powerful tool if you use it the right way. Unfortunately, a lot of people use it the wrong way, thinking that it's going to work straight off the bat which quite often it doesn't. What needs to be done before you go onto Smart Bidding is to run your campaigns manually, give your account or your Google the data so it knows exactly what you're looking for, and then switch over to Smart Bidding. We need to get some conversions in, to begin with, and I would say depending on how big or small that account is, you need to have at least 25 to 30, and you'll find that once you switch over to the smart bidding from the manual one, it will start to work pretty well and get you the results which you are looking for.
So let's cover the four main Smart Bidding types. They are not in any particular order. I'll start off with the TCPA. T stands for Target Cost Per Acquisition, cost per action.
This helps to increase your conversions while targeting a specific cost per action. What you want to do is to give the campaign or Google a target cost per acquisition, that I want to get leads for $50, a hundred dollars, and so on, but the TCPA, bidding is mostly for lead generation. What you want to do is any kind of e-commerce campaigns you may be running. You don't want to be running on that. You want to go onto a target ROAS, which I'll cover in a minute. With the TCPA, once Google has got enough data, and it knows that you are looking to get a lead for $50, it's going to go out and put your ads in front of those people who are most likely to sign up or become a lead and bid less aggressively who are not likely to convert. What this does is it gives you a hands-free, pretty much hands-free campaign management. It's kind of like, you know, the manual gear shift cars and automatic cars.
You put the car in auto and drive but nowadays there's now the self-driving cars as well. We're just taking the driving experience to the next level and it is improving day on day. Within the next couple of years or so, pretty much most of the cars will be self-driving, and Google as is in my humble opinion, absolutely heading it that way as well. We don't know where we will end up, but the algorithm and the machine learning is getting powerful day by day. You feed them the right data in and you're going to get some pretty good results. I've got one of my campaigns right now. I've set the bid at about 45 pounds and Google, a machine learning or the algorithms or the target CPA bidding is getting me conversions at about 47, 46, 47. It's very close to my target CPA, but it does work and it works wonderfully well because the heavy lifting is done by Google then. You don't need to worry about keywords, bidding, bid adjustments, pretty much everything. You set it and you let it run. What you want to do is to give it some time. Don't expect instant results the next day because the machine does take a bit of time. It needs to shift gears from the first, second, third, and so on, and then once it's on the motorway or the freeway and going at, you know, a hundred miles an hour, it is pretty much unstoppable.
The next one is Troas - Target Return on Ad Spend. This is where Google will optimize your campaigns for the conversion value and not the conversion. ROAS bidding is mainly for e-commerce. If you are selling something online, a product, not for lead generation, the difference between these two is a lead will be a leader because the value of that lead will be the same, whereas a value of conversion when somebody makes a purchase through your shopping cart will never be the same. One person or a customer can make a purchase for a hundred dollars. Another one could be $10 or another one could be 500. What you want to do is to work out how much return on ad spend you need. Most companies are happy with the minimum of 300% return on ad spend. What that means is you give $1 to Google and you get back a three in retail.
So as long as you are profitable, or some companies may be running at breakeven because they want to talk about the lifetime value, which I'll cover in a bit, it's not costing them money to run these campaigns so they can scale up very quickly and aggressively. The lower the Troas, the more leeway you are giving to Google and for these smart campaigns, what you want to be doing is to give enough budget to all these campaigns to run on. If your target, let's say target CPA is $50 and you are bidding 50, or you're budgeting, I should say, 50 a day, you will find your campaigns will hardly get any impressions you need to give at least four to five times. Some of the Smart Bidding strategies need a bit more, 10x. You need to be prepared to spend a bit upfront because once that target CPA or the ROAS is what you want, then the budget should not come into play. Unless you cannot cope up with the number of leads you are getting, or you can't cope up with the number of orders you are getting from Google. You give a good enough budget so that you can give Google that leeway to keep going out aggressively in front of your target audience and getting you those conversions.
The next, strategy is ‘Maximize Conversions.’ This obviously as the name suggests. It maximizes the conversions. For this bidding strategy, you don't need to have a 4X or 5X budget. Whatever budget you are comfortable with, you put it out, and then Google will try and get you those conversions with the budget you have. Most likely you will find that all your budget is being spent with this Smart Bidding. The next one is ‘Maximize conversion value’ where instead of the maximize conversion it will try and get you to value where instead of the maximize conversion value it will try and get you higher conversion value for your business. If you want to maximize the ROAS, then you need to switch over to maximize conversion value and set up or target a specific ROAS number, which you want to bid for. These are the four main bidding strategies that you can start with and there are a couple others as well, where we go into the display network and the videos, which I will cover in a separate video.
There's one more, I beg your pardon, the fourth one, which was the enhanced, cost per click or the CPC. This is when you run a manual campaign but there's a little checkbox where you check it off and tell Google to bid more aggressively, and it can double up your CPC because you are enhancing your CPC. You try to get into that auction even if it is costing you a higher cost per click, but you can limit your highest maximum CPC so you can say, I don't want to pay more than $30 or $50 and so on. It will automatically adjust the bids accordingly. What Google is going to do is going to, again, bid more in front of those audiences, who it thinks are likely to convert and bid less, who are things is not going to likely to convert.
If you enjoyed this article, you may also like:
- Google Ads Target CPA Bidding
- Google Ads Bid Strategy Report
- Understanding Return On Ad Spend (ROAS)
- Google Ads Attribution Models Explained
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