Smart Bidding Basics

Over the last few months, we have paired new Smart Bidding technology from Google with our low-funnel, lead generation campaigns to maximize performance for our clients. We have seen fantastic results across industries after implementing this new bidding technology.

What is Smart Bidding?

Smart Bidding is a bid strategy that allows us to access more bidding signals in real-time. Additionally, Smart Bidding offers new conversion strategies to optimize every auction for maximum conversions and assign unique values for different types of conversion. 

This all adds up to a bidding solution that allows advertisers to evolve from targeting keywords to targeting users.

Until now, most advertisers would manually set bids, collect and analyze performance data, and make adjustments accordingly. We would monitor signals like time of day and geo-location, collect data over a long enough time period to determine trends, and then make changes like increasing or decreasing bid amounts. 

While this approach has been highly productive, Google has had two things available that weren’t available to advertisers: More data and machine learning capable of real-time optimization. Those two elements are now available to advertisers through Smart Bidding. The new technology enables us to bid in real time based on all of the signals we have always used and brand new signals that we have never had access to before. We used to target users based on the keyword they searched for, time of day, type of device they are using, their specific geo-location, and dozens of more signals. 

With Smart Bidding, we are targeting the users and bid based on their intent, informed by the vast amount of user data Google has collected across its platforms. The new technology allows us to bid in real time based on all of the historical factors we’ve always looked at, and net-new signals that we’ve never had access to before like the browser the user is on, their operating system, their historical search history, and past conversion performance.

With manual bids, ad spend is focused on low-funnel, high-quality keywords within a limited geo-targeted area. The ad is shown to nearly all users within the targeted area but sometimes misses a few users due to budget, or users searching for irrelevant keywords. Now, if we know from someone’s combined activity that they are in the market for what we are advertising, we don’t need them to be good at entering in just the right low-funnel searches. With Smart Bidding, we can geo-target a broader area while only advertising to the individuals who have an intent to convert.

We are seeing amazing results with Smart Bidding, but that wasn’t always the case. Smart Bidding enables us to do real-time bidding based on intent, but simply “turning on” the new tech doesn’t work. Running with Google’s automation yielded increased cost and cost/conversion. After running dozens of tests for 12 months, we’ve identified how to make this powerful bid strategy perform for our dealership clients. 

How We’ve Made Smart Bidding Work for Auto Dealerships

Adpearance’s solution combines a unique account structure, premium conversion tracking, and Smart Bidding to generate more conversions at a lower cost.

Account Structure

Previously, we had a data-informed bidding strategy that was manually implemented, prioritizing the keywords we knew would perform well based on historical results. Smart Bidding’s ability to efficiently identify in real-time, in-market shoppers with the intent to buy enabled us to advertise on additional keyword variations that were previously too broad. 

For example, before Smart Bidding, it would be inadvisable for a dealer to advertise on the term “Honda.” It’s top of funnel, high volume, and low converting. However, there are absolutely people who are ready to buy who simply search “Honda.” With Smart Bidding, we can now advertise on a broad keyword like “Honda” and appear only to the people who are likely to convert. 

With examples like this, you can understand why Smart Bidding allows us to add more keywords and adjust our structure. Adpearance has always used a highly-granular account structure so that we could be really prescriptive about budgets and spends. With Smart Bidding, our accounts are still highly granular, but we realized we needed to allow more room for the system to breathe and optimize. Our new account structure hits the sweet spot of maxing Google’s machine learning without letting go of the spending reigns. This enables us to generate a higher volume of conversions with a low cost per conversion. 

Geo-targeting

Now that Smart Bidding allows us to target users rather than keywords, we’ve gotten more efficient and our cost per lead has gone down. We can look for more in-market users now that we’re not showing ads to users who were never going to convert. If we capitalize on all relevant users within your geo-targeted area close to the dealership, we can increase our geo-targeting to capture even more users. 

This change in how we approach geo-targeting means we need to change our thinking about impression share. Historically, we monitored impression share closely. However, with Google purposefully opting out of showing ads to irrelevant users, a lower impression share is often a good thing. The nuance here is to monitor impression share lost due to budget.

Conversion Tracking Technology

Defining what a conversion means for your goals and accurately tracking that data are some of the most impactful decisions you can make for Smart Bidding. Utilizing our sister company Foureyes’ tracking technology, we are able to better track all conversions (ad calls, website calls, forms, and chats), and we can feed Smart Bidding the high-quality data needed to determine which users are most likely to convert. 

Making Smart Bidding Work for You

If you haven’t seen a dramatic drop in your cost per conversion since Google released Smart Bidding, you should consider your advertising management. Adpearance’s strategy yielded a 6% lower cost per click and 37% more conversions while cutting our clients’ cost per lead nearly in half. Start a conversation by requesting a free digital analysis to learn how Smart Bidding + Adpearance can benefit your dealership.