Smart bidding has changed the way businesses approach their ad campaigns on Google. Instead of relying on manual CPC bidding, where you set a maximum cost per click (CPC) for each keyword, you can now use Google’s automated bidding strategies that adjust your bids based on real-time signals. This includes the user’s device, time of day, location, and even past browsing behavior. With more automation and access to deeper data, advertisers can focus more on their strategy and less on constantly tweaking bids based on performance.
In 2025, smart bidding has become a core feature of many successful ad campaigns. But while the promise of better performance and easier management is appealing, using smart bidding incorrectly can lead to poor results. A smart bidding strategy needs enough conversion data and the right structure to work effectively. In this article, we’ll explain how smart bidding works, the main strategies available, and how to use them depending on your business goals.
What Is Smart Bidding in Google Ads?
Smart bidding is part of Google’s automated bidding strategies. It uses machine learning to set bids based on how likely it is that a click will result in a conversion or drive high conversion value. Unlike manual CPC bidding, where you place your keyword bid, smart bidding strategies use real-time data and historical data to make decisions for each auction. These decisions take into account multiple signals, including time of day, device type, location, and the user’s past behavior.
The goal is to increase the number of conversions or maximize conversion value while making efficient use of your ad spend. Google’s system learns from every interaction and adjusts bids based on what’s most likely to perform well at that moment. This is why smart bidding often outperforms manual strategies, especially once the system has gathered enough data over a period of 30 days or more.
Google Automated Bidding Strategies Explained
Google’s automated bidding strategies are designed to help advertisers get better results without having to constantly adjust bids manually. Each smart bidding strategy uses machine learning to predict how likely a user is to convert, then adjusts bids based on real-time signals like device, location, time of day, and user behavior.
These strategies allow your ad campaign to react quickly to trends and user intent, giving you a better chance of reaching the right audience at the right time.
The key is to align the bidding strategy with your specific goals. Some strategies work best when you want to get the most conversions, while others focus on getting the highest return from your budget. The strategy you choose also depends on how much historical data and conversion data you have, and whether you’re optimizing for the number of conversions or the value of those conversions.
Maximize Conversions
Maximize Conversions is one of Google’s most popular automated bidding strategies, especially for advertisers who are just getting started or launching new campaigns. Instead of setting a manual cost per click (CPC) for each keyword, Google uses real-time signals to set bids that are most likely to result in a conversion. The system aims to use your entire daily budget to drive as many conversions as possible.
This strategy is especially useful when you don’t yet have enough conversion data to set a target CPA or target return on ad spend ROAS. Since there’s no fixed cost per conversion goal, the system can experiment more freely and learn faster. Over time, this approach can help build up enough conversion volume and performance history to support more advanced strategies. Maximize Conversions is also helpful when your priority is volume, such as generating leads or sign-ups, even if each conversion has a similar value.
Because bids are based on real-time signals and adjusted automatically, advertisers can avoid the constant monitoring required by manual bidding. However, it’s still important to regularly review results and make sure your tracking is set up properly.
Maximize Conversion Value
Maximize Conversion Value is a smart bidding strategy that focuses on driving the highest total value from your conversions, rather than simply increasing the number of conversions. If you assign different values to various actions—such as product sales, service sign-ups, or quote requests—this strategy prioritizes conversions that are expected to generate the most revenue.
This makes Maximize Conversion Value ideal for businesses with a range of products or services that vary in price or importance. For instance, an e-commerce company may want to prioritize sales of high-margin items. A service-based business might value one lead more than another based on the type of service requested. By using this strategy, Google will place higher bids on clicks that are more likely to produce higher-value outcomes.
To use Maximize Conversion Value effectively, you need to make sure conversion tracking is set up to include values. This can be done through transaction data, lead scoring systems, or custom conversion value setups. The more accurate your data, the more effective the system will be.
Target CPA (Cost-Per-Acquisition)
Target CPA is ideal when you have a specific cost per conversion in mind. You set the average amount you’re willing to pay for a conversion, and Google adjusts bids to try to meet that goal. This strategy works best when your campaigns generate at least 30 conversions over the past 30 days. It uses both real-time signals and your historical data to predict which clicks are most likely to convert within your target cost.
Target ROAS (Return on Ad Spend)
Target Return on Ad Spend (ROAS) is another value-based bidding strategy. With this option, you tell Google the return you want for every dollar spent. If you set a target ROAS of 500%, for instance, you’re asking Google to aim for $5 in conversion value for every $1 spent. This strategy works best when you have reliable conversion tracking and a high number of conversions over time.
Maximize Clicks
Maximize Clicks is not conversion-focused but is still one of Google’s automated bidding strategies. It aims to get as many clicks as possible within your budget, making it a good option for traffic-based goals or brand awareness campaigns. This strategy is useful if you’re trying to bring more visitors to your website, promote a new product, or test ad copy without focusing on conversions just yet.
Enhanced CPC
Enhanced CPC is a semi-automated bidding option where you still set your own bids, but Google adjusts them based on the likelihood of a conversion. It works by increasing or decreasing your bids based on real-time signals. It’s a step between full manual control and full automation and can help you test the waters of smart bidding.
What’s a Benefit of Using Smart Bidding with Broad Match?
A common concern with broad match keywords is wasted spend. However, when used with smart bidding, broad match becomes much more effective. One major benefit of using smart bidding with broad match is that the system can identify high-intent search queries that you may not have targeted manually. Because it uses real-time and historical signals, it can match your ads to searches that are likely to convert, even if the exact keywords aren’t in your ad groups.
This combination also expands your reach, helping you discover valuable keywords you may not have considered. To get the most out of it, make sure you have strong conversion tracking, enough data (ideally over 30 conversions in the past month), and a solid list of negative keywords to prevent irrelevant clicks.
What Are Two Types of Value-Based Smart Bidding Strategies?
If you’re wondering what are two types of value-based smart bidding strategies are, the answer is Target ROAS and Maximize Conversion Value. Both focus not just on the number of conversions, but on how valuable each conversion is to your business. They are particularly helpful in e-commerce or high-ticket service industries, where not all conversions are equal.
For example, a company selling $1,000 services and $100 services wouldn’t want to treat those conversions the same. Using a value-based smart bidding strategy lets the system prioritize bids based on the expected revenue.
Pros and Cons of Smart Bidding
Like any strategy, smart bidding has advantages and trade-offs. It can significantly improve performance when used correctly, but it also requires proper setup and realistic expectations. Before switching from manual CPC bidding or Enhanced CPC, it’s essential to understand where smart bidding can help—and where it might fall short.
| Pros | Details |
| Saves time and reduces manual work | Smart bidding automates the bidding process using machine learning, freeing up time that would otherwise be spent on adjusting keyword bids manually. |
| Uses real-time signals for better decision-making | Google adjusts bids based on factors like device, time of day, location, and user behavior at the moment of the auction, which is difficult to do manually. |
| Scales efficiently across campaigns and ad groups | For advertisers running multiple campaigns or large accounts, smart bidding helps maintain consistency and performance without needing constant attention. |
| Improves accuracy with enough conversion data | When campaigns have reliable tracking and enough historical data (usually 30+ conversions in the past 30 days), smart bidding often outperforms manual strategies. |
| Cons | Details |
| Reduced control over keyword-level bidding | You can’t set individual keyword bids, which can be frustrating if you want tight control over specific terms. |
| Performance dips during the learning period | When you launch or make changes, smart bidding enters a learning phase that typically lasts 7 to 14 days, during which results may fluctuate. |
| Depends heavily on accurate conversion tracking | Without reliable data, smart bidding strategies may misfire, overspend, or focus on low-value actions. |
| Not ideal for low-data campaigns | Campaigns with too few conversions may struggle, as the algorithm needs data to make practical, real-time decisions. |
Smart bidding is a powerful tool when used with the right foundation: solid tracking, clear goals, and enough data. Weighing the pros and cons upfront can help you decide whether automated bidding strategies make sense for your current campaign or if manual CPC bidding is still the better fit.
How to Avoid Common Smart Bidding Mistakes
Smart bidding can work well, but minor missteps can lead to wasted budget and poor performance. Google’s machine learning system needs the right conditions to function correctly. Avoiding a few key mistakes can make a big difference in your campaign results.
- Don’t start with too little data: Most smart bidding strategies need a strong foundation of conversion data, typically at least 30 conversions in the past 30 days. Without this, the system doesn’t have enough information to make smart, real-time bidding decisions.
- Avoid frequent changes to campaigns: Making constant edits to your ads, budgets, or bidding goals resets the learning phase. This delay can interrupt performance and make it harder for the system to find patterns that increase conversions.
- Don’t set aggressive goals too early: If you place a very low target CPA or an overly high target return on ad spend (ROAS) before the system has stabilized, performance may suffer. It’s better to start with broader targets and adjust once you see consistent results.
Getting smart bidding right isn’t just about choosing the right strategy; it’s also about giving the system the right signals, room to learn, and time to perform. With a thoughtful approach, your campaigns will have a better chance of success.
When to Use Smart Bidding, and When to Avoid It
Smart bidding works best when you have steady conversion data, clear goals, and enough budget to let the system learn. If your campaign has had at least 30 conversions in the past month, you’re in a good position to switch from manual bidding. Google’s system also performs better when your daily budget is high enough to generate regular conversions—typically, this means starting with a minimum of $50–$100 per day (or roughly $1,500–$3,000 per campaign over the first few months).
But if you’re launching a brand-new campaign, testing a new product, or working with a tight budget, manual CPC bidding may be the better choice. In those cases, you have more control over keyword bids and can make quick decisions based on early results. Once you’ve built up solid conversion data and understand which ads and keywords are performing well, you can consider moving to a smart bidding strategy.
What Is Manual Bidding in Google Ads?
Manual bidding is where you set your own cost per click (CPC) for each keyword. This gives you full control, but also requires constant attention. You’ll need to adjust bids based on performance, test different match types, and monitor results daily.
Manual bidding is helpful when you don’t have much conversion data, or when you’re testing new campaigns and need tighter control. It’s also useful for advertisers with smaller budgets who want to maximize every dollar.
How to Transition from Manual to Smart Bidding
If you’re ready to move from manual bidding to smart bidding, start by setting clear goals. Use portfolio bidding strategies to group similar campaigns and test different options. You can also run Google Ads Experiments to compare results without changing your main campaign. Begin with Maximize Conversions or Maximize Conversion Value, and switch to Target CPA or Target ROAS after you’ve built up enough data.
Which Smart Bidding Strategy Optimizes for Value?
If your business is focused on revenue and return rather than just conversion volume, the best approach is to use one of Google’s value-based smart bidding strategies: Maximize Conversion Value or Target ROAS. Both of these strategies go beyond simply generating leads or sales and focus on the actual dollar value behind each conversion.
Maximize Conversion Value allows Google to use your full budget to bring in the highest possible value from all tracked conversions. It doesn’t have a specific ROAS target, which gives the system more flexibility. This can be useful for businesses that have a wide range of product prices or want to trust Google’s algorithm to get the most from their spend.
Target ROAS, on the other hand, is best used when you have a specific goal for how much revenue you want to make for each dollar spent. This strategy requires a good amount of conversion value data and a consistent pattern of past conversions. If your account has enough historical data and you understand your profit margins, Target ROAS can be an effective way to control spending while maximizing return.
Both strategies require proper conversion value tracking and a stable campaign setup. They work best in accounts with consistent activity over the past 30 days, enough conversions to analyze, and goals that go beyond simply increasing conversion count.
Key Metrics to Watch During Smart Bidding Campaigns
To evaluate the success of your smart bidding strategy, it’s important to monitor key metrics throughout the life of your campaign. These include cost per conversion, conversion rate, ROAS (return on ad spend), and impression share. If your goal is to maximize value, then pay special attention to total conversion value and how it compares to your spend.
The learning status is another essential indicator. When a campaign is in the learning phase, performance can fluctuate. This phase usually lasts 7 to 14 days, but can restart if major changes are made to the budget, targeting, or bidding strategy. Avoid making frequent changes so the system can learn effectively.
Other helpful insights come from metrics at the ad group and keyword levels. Look for areas where performance is strong and where it’s underdelivering. This helps you decide if you need to add negative keywords, restructure ad groups, or adjust your creative assets. With smart bidding, the system does much of the work, but you still need to guide it based on performance.
Experienced Support to Maximize Your Smart Bidding Results
Smart bidding offers real benefits, but only if your campaigns are set up and monitored correctly. Many businesses waste budget by relying too heavily on automation without understanding how it works.
At Oyova, we help clients use automated bidding strategies in a way that supports their business goals, whether that means increasing conversions, improving ROAS, or managing spend more effectively.
Our team can help you:
- Choose the right smart bidding strategy for your goals: We evaluate your campaign history, business type, and conversion tracking setup to determine whether you should start with Maximize Conversions, Maximize Conversion Value, Target CPA, or Target ROAS.
- Structure ad groups for cleaner performance: A messy account structure can confuse Google’s algorithms. We organize your ad groups and keyword match types so that smart bidding can make more accurate, effective decisions.
- Set up accurate conversion tracking and assign proper values: Smart bidding only works when Google has the right data. We help ensure your tracking is correctly installed and that each action—like a form fill, purchase, or phone call—has an appropriate value attached.
- Monitor and fine-tune campaigns as they scale: Even automated systems need guidance. We keep a close eye on key metrics, learning status, and performance trends, making adjustments to bids, budgets, and strategy as your goals evolve.
If you’re ready to improve your ad campaign performance and get more from your budget, contact Oyova today.
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