The Challenge
Performance marketing has always been a balancing act, requiring marketers to reach the right audience at the optimal price. Historically, this involved extensive testing and analysis, consuming valuable time and resources.
The Solution
The implementation of Smart Bidding, Value-Based Bidding (VBB), and Broad Match fundamentally changes the game. Marketers can now reach a larger audience while ensuring their ads appear for the most relevant searches, with bids optimally adjusted to their individual goals. How does this work? Let’s delve into the details.
Smart Bidding and Value-Based Bidding are two powerful AI-driven bidding strategies that help performance marketers achieve their campaign objectives. Smart Bidding is the ideal choice when marketers aim to increase conversions or revenue through their campaigns. Advertisers simply define their target KPIs, such as Cost Per Acquisition (CPA) or Return on Ad Spend (ROAS). Google AI then utilizes historical data and real-time signals like device, location, time of day, language, and operating system to optimize bids according to these targets. This is particularly effective when sufficient conversion data is already available.
Value-Based Bidding takes it a step further by considering the individual value of each conversion. This makes it especially useful when marketers focus on long-term profitability and maximizing the overall value of their campaign. However, Value-Based Bidding only works effectively when companies have a robust first-party data strategy and insights into their Customer Lifetime Value. Within Value-Based Bidding, two main goals can be set:
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Maximize Conversion Value: This option is particularly suitable for marketers aiming to use their budget efficiently to boost overall revenue. Google AI then optimizes bid management to maximize the total value of conversions within a set budget.
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Target ROAS: If a specific ratio between costs and profit is desired, rather than just overall revenue, marketers can define a target ROAS within Value-Based Bidding. Google AI will then optimize bids to achieve the target ROAS as closely as possible.
Performance marketers should have both strategies in their toolkit and use them based on their campaign goals and available resources.
Power Pair: Broad Match Provides Smart Bidding with More Relevant Data and Saves Marketers the Hassle of Managing Keyword Lists
Both bidding strategies work even more effectively as a power pair when combined with Broad Match keywords. Broad Match is a keyword option in Google Ads that uses AI to understand the intent behind a search query. It displays ads for relevant searches even when they don’t exactly match the defined keywords. For its predictions in Broad Match and Smart Bidding, artificial intelligence relies on signals such as device, time of day, location, and search history.
By utilizing Broad Match, marketers avoid the time-consuming task of maintaining millions of keyword variations. A key advantage of combining Broad Match with AI-powered bid management is that it provides Google AI with access to a larger volume of data. This enables the AI to learn faster and more accurately which word combinations, times of day, or demographic characteristics actually lead to conversions. Based on the patterns identified, the AI can adjust bids for Smart Bidding and Value-Based Bidding more precisely, for example, by placing higher bids on search queries with a higher likelihood of conversion.
In simple terms: Broad Match acts like a large funnel, trying to identify as many interested potential customers as possible. The AI-powered bid management system then decides which of these are most valuable and at what cost they should be targeted.
Power Pair
Broad Match
Expands search queries to reach relevant target audiences using AI-powered matching
Smart Bidding
AI-driven bidding strategies optimized for your campaign objectives
Better Together
Achieve precise bidding adjustments and efficient target achievement for optimized campaign performance
The Benefits at a Glance
Broad Match
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Increased Reach: Broad Match allows you to reach a larger target audience, as ads are displayed for searches that don’t exactly match the specified keywords.
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Improved AI Optimization: The larger volume of data generated by Broad Match enables artificial intelligence to optimize Google Ads bidding strategies (Smart Bidding and Value-Based Bidding) more effectively.
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Discovery of New Keywords: Broad Match helps identify new, relevant keywords that may have been overlooked, which can further improve campaign performance.
Smart Bidding
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Time Savings and Efficiency: Smart Bidding automates the bidding process, saving time and resources that would otherwise be spent on manual bid adjustments.
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Powerful AI Optimization: Google’s advanced AI continuously analyzes numerous signals and adjusts bids in real time to achieve campaign goals as effectively as possible.
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Flexibility and Adaptability: Smart Bidding offers various strategies (e.g., maximize conversions, target CPA, target ROAS) that can be adapted to different campaign objectives.
Value-Based Bidding
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Focus on Profitability: Value-Based Bidding optimizes bids not just for conversions but for the actual value of each conversion, leading to greater long-term profitability.
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Efficient Budget Utilization: By prioritizing users with higher conversion potential, the budget is used more efficiently, maximizing the overall value of the campaign.
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Better Campaign Control: With Value-Based Bidding, marketers have more control over their campaign performance by focusing on the actual value of conversions.
Power Pair (Smart Bidding and Broad Match)
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Maximized Reach and Relevance: Combining Broad Match and Smart Bidding reaches a larger target audience with relevant ads.
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AI-Driven Performance Optimization: Google AI and Broad Match data allow for even more precise bid adjustments and more efficient goal achievement.
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Time Savings Through Automation: Automated bidding and keyword optimization free up resources for strategic tasks.