The Problem with Smart Bidding
Smart Bidding is a popular automated bidding strategy for Google Ads. It uses machine learning to optimize bids for conversions or conversion value. The idea is that the system will adjust bids based on factors such as device, location, time of day, and user intent, to name a few. This approach can help advertisers save time, reduce manual labor, and potentially increase conversions. However, it also has its drawbacks.
The biggest danger of widely adopted automated bid strategies like Smart Bidding is that Google technically determines all CPC bids. Smart Bidding as a concept works very well, but if left unrestricted, it can result in overbidding and overspending. For example, we’ve seen CPCs of 20-35 times the average CPC, which can result in wasted ad spend.
High CPCs aren’t always bad. Google bids more when a conversion is likely to occur. Therefore, it’s okay to see higher CPCs here and there. However, seeing CPCs 20-35 times your average CPC is not right. That’s why you need to take back control and reduce wasted ad spend.
The Solution: Portfolio Bid Strategies with Maximum CPC Bid Limits
Portfolio bid strategies work similarly to regular bid strategies, but you can use them to group multiple campaigns together. Available portfolio bid strategies include Target CPA, Target ROAS, Maximize Clicks, Target Impression Share, Maximize Conversions (with or without a tCPA), and Maximize Conversion Value (with or without a tROAS).
The biggest advantage of using portfolio bid strategies over regular bid strategies is that you can set up maximum CPC bid limits on Target ROAS and Target CPA. By doing so, you can restrict how much Google can bid per click, which can reduce overspending.
Here’s how to set up portfolio bid strategies with maximum CPC bid limits:
- Click on ‘Tools & Settings’
- Click on ‘Bid Strategies’
- Click ‘+’ to create a new portfolio bid strategy
- Configure your preferred bid strategy
- Click ‘Advanced Options’
- Enter a maximum bid limit
- Click ‘Save’
It’s essential to read through each step carefully because setting up your maximum CPC bid limits incorrectly can decrease your performance.
Setting Up Maximum CPC Bid Limits
When setting up your maximum CPC bid limits, you should aim for a limit of 3-5 times your average CPC on the campaigns you’re adding the portfolio bid strategy to. However, there are no hard and fast rules on what your maximum bid limit should be. If you set the limit too low, you will limit the algorithm. So, it’s crucial to ensure you have given the algorithm enough
Now, let’s take a look at some final notes to keep in mind when using portfolio bid strategies with max CPC bid limits.
Firstly, keep in mind that bid limits aren’t the only factor affecting your performance. There are many other variables that can impact the success of your campaigns, such as ad copy, landing pages, targeting, and more. So, don’t rely solely on bid limits to improve your performance.
Additionally, it’s important to monitor the performance of your campaigns regularly. Keep track of your metrics and adjust your bid limits as needed. If you notice that your performance is suffering, you may need to adjust your bid limits or even try a different bid strategy altogether.
Lastly, don’t be afraid to experiment with different bid strategies and bid limits. Every campaign is unique, and what works for one may not work for another. So, be open to trying new things and be willing to adjust your strategies as needed.
In conclusion, portfolio bid strategies with max CPC bid limits are a powerful tool for reducing wasted ad spend in Google Ads. By setting bid limits, you can take back control of your bids and prevent Smart Bidding from overspending on your campaigns. Just be sure to set your bid limits carefully, monitor your performance regularly, and be willing to experiment and adjust as needed.