How to Maximize ROI with Google Smart Bidding

For marketers running paid search campaigns, there's a constant push and pull between maximizing results and controlling costs. Google smart bidding promises to help strike that balance through machine learning and automation. But does it deliver?

Yes and no. Google’s algorithm is amazing at honing in on the keywords that deliver results and doubling down on bidding for them. The problem is that, with its own data alone, Google can’t actually tell which keywords are providing value for your business. 

It can tell you which ads drive the most clicks, but it can’t discern which clicks actually result in qualified leads and sales. If you want it to bid based on actual value, you have to give it more information.

In other words, Google smart bidding works if you’re feeding it the right data.

This guide breaks down exactly how to maximize your ROI with Google smart bidding. We'll cover common pitfalls to avoid and show you how to give Google's AI the high-quality data it needs to optimize your campaigns effectively.

What is Google Smart Bidding?

Google smart bidding uses machine learning algorithms to optimize your bids in real-time, taking into account hundreds of signals that impact conversion probability. Instead of manually adjusting bids based on limited data points, smart bidding analyzes a comprehensive set of factors. The system considers things like:

• Device type
• Location
• Time of day
• Operating system
• Language
• Browser preferences

It then processes this data to automatically adjust your bids, helping achieve your specified conversion goals—whether that's maximizing conversions or hitting a target cost per click.

What Google’s algorithm can’t track are factors like:

• Conversion outcomes
• Whether a conversion came from a qualified prospect
• Sales value of specific leads

However, you can supplement Google’s data with this key information using a third-party platform, like WhatConverts.

Why Smart Bidding Matters for ROI

Traditional manual bidding strategies often leave money on the table. While a human manager might consider a handful of factors, smart bidding evaluates hundreds of signals in real-time. It offers unmatched precision, making granular bid adjustments for each auction based on the likelihood of conversion.

The system also continuously learns and adapts. As user behavior changes, market conditions shift, and seasonal trends emerge, the algorithm automatically adjusts its approach to maintain optimal performance.

However, this machine learning is only as good as its training data. Without information about lead quality and value, smart bidding optimizes for quantity alone—potentially driving more low-quality conversions that don't translate to revenue.

Choosing the Right Smart Bidding Strategy

Google offers several smart bidding strategies, each designed for different business objectives:

Maximize Conversions

This strategy aims to get the most conversions possible within your budget. It works particularly well for new campaigns without historical data or testing periods to gather baseline conversion data, but is less effective as a long-term strategy.

Target CPA (tCPA)

The tCPA strategy, which stands for Target Cost Per Acquisition, aims to maximize the number of conversions while maintaining your desired cost per acquisition. Acquisitions can include things like:

• Form submissions
• Appointment bookings
• Calls from Google Ads
• Ad click-throughs and page visits
• Video views
• Chat initiations
• File downloads
• Button clicks

This strategy is less effective when using only the data collected by Google ads, since it treats all acquisitions of the same type as having an equal value. In order to target cost per valuable acquisitions, Google needs supplementary information about which specific conversions are worthwhile.

Target ROAS (tROAS)

Target ROAS (tROAS) optimizes toward a specified return on ad spend target. For instance, a 300% tROAS goal means that you’re aiming for $3 in revenue for every $1 spent on ads.

tROAS works best when you have consistent and predictable conversion values that can be accurately tracked and fed back to Google in real-time. The most typical use case is in ecommerce, where purchase values are known immediately.

For businesses with variable conversion values (like lead gen, where one lead might be worth $500 and another $5000), the tROAS strategy isn’t as effective if it only has access to Google Ads data. You’d need additional tools like WhatConverts to capture actual lead values and feed that data back to Google, so the smart bidding algorithm can optimize for true revenue potential.

Maximize Conversion Value

This strategy aims to generate the highest possible total conversion value within your budget, rather than just maximizing the number of conversions. Conversion value can be measured as:

• Purchase revenue
• Lead value
• Quote amount
• Estimated customer lifetime value
• Custom value assignments

Like tROAS, this strategy works seamlessly for ecommerce where purchase values are immediately known. However, for lead generation businesses, maximizing conversion value requires users to supplement Google's data with actual lead values. Without this additional data, the algorithm can only optimize for quantity of conversions rather than their true business value.

The key difference between this and tROAS is flexibility—while tROAS requires you to maintain a specific return target, Maximize Conversion Value simply aims for the highest possible total value within your budget constraints.

Setting Up Smart Bidding for Success

Success with smart bidding hinges on three key factors: data quality, conversion tracking, and proper setup.

1. Clean Historical Data

Smart bidding needs quality historical data to make informed decisions. There’s a reason that optimization with Google Ads is Step 5 in WhatConverts’s 6 Step Process—smart bidding is most effective when it has a clear picture of your baseline conversion data to start with.

Before switching, ensure you have at least 30 days of consistent conversion data. Remove significant outliers and maintain stable campaign settings during this period.

Most importantly, make sure you're tracking the right conversion metrics. Raw conversion numbers won't help if they include low-quality leads, spam calls, or unqualified prospects. Your historical data should reflect actual business value.

2. Proper Conversion Value Tracking

This is where many marketers struggle, especially in lead generation. While ecommerce businesses can easily track purchase values based on product costs, lead gen requires a more nuanced approach to valuing conversions.

You need to track not just conversion actions, but also:

• Which conversions are from qualified leads
• Quote values
• Close rates
• Final sale values

WhatConverts solves this challenge by tracking lead value data and feeding it back to Google Ads. The platform allows you to track both initial quote value and final sale value for each individual lead, giving Google's AI the quality data it needs to optimize for your most valuable leads.

Updating all of that info manually may sound time consuming, but it can actually be done in just a few minutes each day. If you’re a true efficiency aficionado, you can also automate the process by using Lead Intelligence to automatically qualify leads and integrating your CRM to share sales info across platforms.

3. Strategic Implementation

A gradual approach to smart bidding implementation yields the best results. Start with your highest-volume campaigns first, using campaign experiments to test smart bidding against manual bidding. Allow 2-4 weeks for the learning period before evaluating results, then gradually roll out to other campaigns based on performance data.

But volume alone isn't enough—you need quality data during this learning period. If your test campaign generates many low-value conversions, that's what the algorithm will optimize toward. Make sure you're passing conversion value data from day one.

Common Pitfalls to Avoid

1. Switching to Smart Bidding without Sufficient Data

Smart bidding requires adequate data to make informed decisions. Many marketers fail by switching to smart bidding too early, applying it to low-volume campaigns, or making frequent campaign changes during learning periods. Give the system time to learn and optimize before making major adjustments.

Keep in mind that volume isn’t everything—you need sufficient data quality, too. A campaign that generates 1000 conversions in two weeks might seem ready for smart bidding, but if you can’t tell whether any of those conversions actually generated revenue, you’re optimizing blind.

2. Poor Conversion Setup

Your smart bidding is only as good as your conversion tracking. Many campaigns suffer from mistakes like:

• Tracking too many unnecessary conversion actions
• Failing to differentiate between high and low-value conversions
• Missing critical lead value data

With WhatConverts, you can automatically filter out low-quality leads before they reach Google Ads, ensuring your smart bidding optimizes for genuine business opportunities.

Read More: Lead Intelligence — Automatically Score, Qualify, & Value Your Leads

3. Impatience During Learning Periods

The learning period is crucial for smart bidding success. Avoid making major changes during this phase, and resist the urge to judge performance too early. Give the system time to gather sufficient data before making strategic adjustments.

The learning period is crucial for smart bidding success. But don't just wait for the algorithm to learn—use this time to verify your value tracking is accurate. Check that:

• Lead values are being captured correctly
• Quality scores reflect actual lead performance
• Value data is flowing properly to Google Ads

Measuring Success

In order to evaluate your smart bidding performance properly, you need to look behind basic conversion metrics. Compare not just conversion volumes, but also lead values, qualification rates, sales rates, and true value-based ROAS. Compare pre- and post-implementation data using appropriate date ranges that account for seasonal factors and market changes.

WhatConverts helps marketers prove ROI by connecting ad spend to actual revenue. The platform tracks leads from first touch to final sale, letting you see exactly how your smart bidding campaigns impact bottom-line results.

Smart Bidding Success Requires Both Strategy and Data

Google smart bidding can significantly improve your PPC performance, but success requires both the right strategy and the right data. While Google's algorithm excels at optimization, it needs accurate value data to optimize toward business results—not just conversion volume.

The solution is combining smart bidding's powerful automation with granular lead tracking and qualification. Tools like WhatConverts provide the crucial value data needed to transform smart bidding from a conversion optimization tool into a revenue generation engine.

Ready to take your smart bidding campaigns to the next level? Start a free 14-day trial of WhatConverts to see how better lead tracking can improve your PPC performance.