Achieve profitable growth through Smart bidding and Broad Matches

FRANCISCO SÁEZ RUIZ

PERFORMANCE MARKETING SPECIALIST

10 June, 2021

Advertisers have long viewed Google's Smart Bidding strategies with suspicion. However, the constant improvement in these algorithms are turning them into a lever that can help you achieve profitable growth in your online business.

It has been a long time since Google implemented Smart Bidding strategies and for a long time most advertisers have viewed them with suspicion.

Also, using Broad Match Keywords was seen as a bad practice, as it brought too much irrelevant traffic to the web, with few conversions.

However, the constant improvement in the bidding algorithms, as well as the recent changes in the keyword modifiers, together with the shift to an account management system focused on simpler structures, are turning this strategy into a lever for growth both for ecommerce and for attracting leads.

What really are Smart Bidding Strategies?

When a user search occurs, an auction (bid) is generated, among other processes, in which advertisers participate with bids in which they determine the maximum money they are willing to pay per click, among other factors.

Here we might think that setting a certain CPC may be enough to guarantee a certain number of auctions won. However, keyword prices are not fixed and fluctuate in real time, just like electricity prices.

For example, let’s think about home delivery.

When are the most take-out orders produced? Probably on weekends, probably more if the weather is bad. Then, lured by the potential profits, more restaurants will be willing to bid more to appear in the ads. This will cause the CPC levels to go up dramatically, and if the price we were willing to pay was lower, we will not appear in the ads. This is where Smart Bidding comes in.

Smart Bidding automates all the bids of our campaign to obtain our objectives through conversions. That is, we tell Google what we want to achieve, be it orders, leads or any other type of conversion, and we establish how we want to achieve it, and we forget to raise and lower CPCs to appear in auctions.

The most interesting bidding strategies in general are:

  • Maximizing conversions, where we will achieve the maximum number of conversions with the specified budget.
  • Target CPA, where conversions are achieved as long as the target cost per convention is not exceeded.
  • Maximizing conversion value, where it comes down to getting the highest conversion value within budget.
  • Target ROAS: where it is about achieving the highest conversion value through ROAS.

In this way, we forget about the CPC manually, we leave it to the system and we work with the real conversion objectives of the business.

How, then, is the bid determined?

Individually, for each auction, Google Ads begins to adjust our CPC based on 3 levels:

 

  1. Learning Algorithms: Based on the time of day, ad position, ad displayed, user location, browser or operating system.
  2. Dimensions: Based on match type, device, location, and remarketing list membership.
  3. Learning Query: where high-traffic words generate learnings that are applied to low-volume words so that they get results as quickly as possible.

In this way, smart bidding helps us to obtain the best possible results through fully automated bids, since they are unique for each auction and use data and signals that are impossible for a human to manage.

Using strategies based on the value of the conversion (Target CPA, Target ROAS and maximize the value of the conversion) we can keep our cost or our benefits at desirable levels for the business, beyond the bids that only care about number of conversions.

Keywords, where Broad Match is key

Until very recently, using Broad Match keywords was considered bad practice by the entire Google community, as it generated very poor quality traffic.

However, with the constant improvements in Smart Bidding, the elimination of the Modified Broad Match and the improvements later applied onto Broad Match made the latter the protagonist when it comes to obtaining the best possible results.

The improvements that Broad Match has received are vital to optimizing its performance:

  • Improved Variation Relevance: This will trigger the same queries as exact and phrase matches.
  • Consideration of additional signals such as the user’s location and recent search activity and landing page to ensure that searches are relevant.
  • Holistic combinations and keyword intent enhancement, based on all keywords in the ad group.

Plus, Broad Match receives unique signals that other matches don’t.

Thus, using Broad Concordance provides us with more benefits and information than in the past and is much superior to phrase and exact matches; since it improves the efficiency avoiding clicks in variations that do not work. They save time by avoiding extensive hand-built keyword lists, expand reach and coverage, and feed the system with relevant signals to understand keyword-related search intent.

Bringing it all together: Expanding reach while maintaining cost targets with smart bidding and broad match

Until now, our choices were either to use broad matches with bid strategies that will not be based on value, or to use keywords on exact or phrase matches; with the disadvantages of generating a lot of irrelevant traffic in the first one, or of suffocating the campaigns too much so that they did not achieve the desired number of conversions.

However, using this combination of broad keywords and value-based Smart Bidding, we achieve these results by combining the best features of both tools:

  • Accurate predictions of how different bids can affect conversions and value.
  • Capture of high-value searches while maintaining cost targets.
  • Smart Bidding will only bid on relevant searches, ensuring relevance with broad match.
  • Simplification of the account structure.
  • Relevant data will be fed in real time to the algorithms for each particular search.
  • Use of machine learning to optimize conversions and the value of conversions in each auction.

The real challenge

So far, we’ve explained the ideal scenario where we broaden our search with broad match keywords and stay efficient with value-based bidding strategies. However, this must be a state to get to and the real challenge is providing the algorithms with the correct data to achieve the proper growth and the correct signals that we need.

To do this, we must perfectly configure:

  • Measurement: Our conversions or value events must be perfectly implemented in our account, including their monetary value, such as attribution dates
  • The attribution model: It will determine to a greater or lesser degree the disposition for the growth of the account.
  • Audiences: They will represent the target audiences that will generate the greatest value for us.
  • Creativities: We will determine them through the study of the best advertisements.
  • Account restructuring: It will allow a simplification of management and a results-based approach to business objectives.

Why work with us?

Rocket has a multidisciplinary team, expert in all aspects necessary to carefully plan and carry out a complete and effective online campaign in order to boost the sales of your business on all digital platforms. With a team with extensive experience in leading companies such as Mango, Stradivarius or Desigual, Rocket adapts to the needs of each client to design a plan focused on improving the conversion rate of their website.

If you are thinking of growing your business through Google Ads and you want the experts at Rocket Digital to help you implement these strategies to help you achieve your goals, do not hesitate to contact us!

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