Smart bidding updates in Google Ads

As advertising engines change the way automation works, several effective tools can help advertisers reduce their impact.

Starting this month, Google Ads plans to move away from smart CPA (FCPA) and ROAS (Troas) bidding strategies and integrate the resources with other bidding strategies. For most advertisers, the only change is to switch to a different bidding strategy with minimal impact on performance.

However, with these changes, it’s always a good idea to check that your account is set up correctly for a smooth transition and that you have the monitoring and alerting features to quickly see if there are any issues.

What changes

From April 2021, some advertisers will no longer be able to create TROAS or CPA bidding strategies. Instead, you see a new field to add a target CPA when using the Maximize Conversions strategy and a new target ROAS field when you use the Maximize Conversion Value strategy. Hopefully, this transition will eventually lead to the CPA and TROAS strategies being fully incorporated into their new counterparts.

 What it means for advertisers

In fact, there have been few changes to the way Google Ads bid management works behind the scenes. It’s just that you have to use a different setup to get the same thing as before. In fact, smart search offers are a bit more like a smart buying offer, as advertisers already use a smart buying campaign strategy and strive to reduce advertising spending to maximize the value of success. With COMFORT.

Be aware of budget constraints

How your bidding strategies work depends on your limits. Some typical limitations you encounter when working with automated presentations are objective (FCPA or TROAS) and budget. But geographic goals, keywords, and other goal options also serve as constraints. Google’s advice is to remove as many restrictions as possible and provide clear automation, backed by unique conversion data.

It’s important to remember that the desired limits are necessary to ensure that your ads are shown to the audience you care about the most. However, we still need to decide what to do with the CPA or target ROAS and budget if both are constraints.

In the past, Google advised advertisers with the old CPA strategy and a low budget to remove the budget constraint (by increasing the budget) or to switch to the previous maximum conversion strategy. Of course, this will not work if CPA and Maximize Conversions come together and become the same.

This means that after April 2021, advertisers will need to increase the maximum number of conversions with a tCPA and budget setting or remove the CPA setting.

Because maximum conversions shouldn’t have a target CPA and a limited budget

While PPC influencer Martin Röttgerding is not directly mentioned, he is referring to what can happen behind the scenes when advertisers execute their bidding strategy with two constraints. They create conflicting goals.

A maximum conversion strategy is very clear with the aim of buying as many conversions as possible. If there are no budget constraints, you will have to buy all conversions (this is risky as you have no protection against too high an incremental cost per conversion).

If the budget for this strategy is limited, it won’t buy the next cheaper conversion until it runs out of budget. Setting a target CPA limit also sets conflicting goals, as the system can buy more conversions at lower prices or fewer conversions closer to the target CPA. What is the advertiser’s real purpose? Most conversions within a limited budget or if you hit the target with perhaps fewer conversions?

When you set conflicting goals, you lose one of the few controls you have over automation.  If the results aren’t what you want, it will be difficult to keep track of what happened because the system won’t tell you what to expect.

If you plan to use the maximum number of conversions with the CPA setting for a budget campaign, you should at least monitor the quality of the post-conversion conversions.

Analyze your conversions as part of this change

Keep in mind that cheap conversions may not be good conversions. It can be risky to switch to cheap because no free lunch is offered. If the conversion is cheap, there is an economic reason. Usually, there are very few advertisers who really like the conversion so there isn’t much competition for it. And don’t forget that Google Ads is the largest auction in the world. If conversion doesn’t attract many bidders because they think it is a less profitable conversion, the conversion will be available at a lower price.

So keep in mind that when you use maximum conversions without using a CPA setting, you can buy some of the less good conversions.

One way to make sure you’re buying the conversions you want is to help Google understand what you really value in a conversion. Many advertisers tell Google they are no longer converting, like a leader posting a form on their site. But they never keep Google informed of what happened to the leader after the sales team got in touch. With Offline-Conversion Input (OCI), advertisers can tell Google which conversions were the most or least profitable and what will help their machine learning systems perform better types of conversions. Check out our recent PPC for the City Council for Smart Business, where we discussed this topic.

Even with CPA or TROAS, Google Ads still charges the advertiser’s CPC

Technical details: Remember, even with CPA or TROAS, the ad auction uses CPCs. That’s why impressions are always sold by Google. Google’s automatic bidding allows advertisers to buy more clicks with an expected conversion rate or conversion value, which when combined with CPC can help them reach their CPA or ROAS goals.

Closing

For most advertisers, it doesn’t change much in the way bots are managed, even after Google combines the CPA and TROAS strategies into updated strategies to maximize maximum conversions and maximum conversion value. Advertisers can still use Optmyzr to optimize manual or smart bids as before and use advanced tools such as accounting rules and scheduling mechanisms to quickly implement new strategies in response to this or any other change. For advertising engines.

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