Many advertisers jump into Smart Bidding, hoping it will solve everything, only to end up with wasted budget and disappointing results. The truth is, Smart Bidding isn’t a magic switch.
It’s a set of strategies, each designed for different goals, and success comes from knowing which one to use in which situation.
This article breaks down when and how to use each Smart Bidding strategy. It highlights where they shine, where they fall short, and the best practices that keep Google’s automation working for you.
Choosing the right smart bidding strategy (at a glance)
Strategy | When to Use | What You Need | Optmyzr Tools that Help |
Target CPA | You want steady lead costs and predictable CPAs | At least 30 conversions/month; consistent budget | Spend Projection ensures your budget doesn’t starve the algorithm. Landing Page Analysis identifies which pages drive leads vs. waste budget |
Target ROAS | Profitability and revenue matter more than volume | At least 50 conversions/month; accurate conversion values | Value-Based Bidding (VBB) refines Google’s conversion value rules so ROAS targets reflect real business impact. Express Optimization lets you test Target ROAS against Max Conversion Value before committing. |
Maximize Conversions | New or growth campaigns where you want volume fast | Flexible budget; tolerance for learning phase | Negative Keyword Finder cleans junk clicks. Rule Engine adds custom safeguards (e.g. auto-pause wasteful queries) |
Maximize Conversion Value | You care about revenue impact, not just conversion counts | Accurate conversion values; solid tracking setup | Budget Optimization + Alerts reallocate spend to higher-ROAS campaigns and notify you before overspending or underpacing hurts performance. |
How do Smart Bidding strategies work?
To better understand Smart Bidding strategies, let’s look at how they work.
As discussed before, Smart Bidding uses machine learning to optimize bids for each auction based on four key factors:
- Contextual signals, for example, device, location, and time of day.
- Predicted conversion rate
- Search query performance
- Target budget (e.g., CPA, ROAS)
This allows Smart Bidding to deliver the most conversions or conversion value within your budget. Let’s now dive into the different smart bidding strategies to choose the one most suitable for your needs:
Target CPA
Target CPA automatically adjusts your bids to get as many conversions as possible while keeping your average cost per conversion at or below your target.
When to use it:
- Lead gen campaigns with a clear acceptable cost per lead
- Campaigns with at least 30 conversions in the past month
- When conversion volume matters more than revenue value
How to make it work:
Set a realistic Target CPA based on your historical cost per conversion, but remember that Target CPA needs a consistent budget flow to learn effectively.
Use Optmyzr’s Spend Projection to forecast if your current budget will pace correctly through the month. If you’re underspending, Target CPA can’t gather enough conversion signals to optimize properly.
Target CPA only works as well as your landing pages convert.
Optmyzr’s Landing Page Analysis tool shows you exactly which pages fuel performance and which bleed budget.
The tool categorizes your pages into four groups:
- High Performers → great CTR + conversions
- High Potential → converts well but has low traffic
- Expensive → high traffic, poor conversions
- Others → everything else
Focus your Target CPA budget on High Performers and fix or pause the Expensive ones bleeding money.
💡Recent Update: Google’s recent ad quality changes affect how Target CPA campaigns perform, especially in lead gen. As Ginny Marvin (Google Ads Liaison) explains: "We will likely show ads that have landing pages with limited to no navigation less often because we found it is a poor user experience." |
📌 What this means: stripped-down, form-only landing pages may see reduced impressions. To maintain performance, add simple navigation while keeping pages fast and relevant. Watch the full video here:
And remember, Target CPA works only if the clicks it buys are relevant.
If irrelevant clicks keep eating up spend, the algorithm is learning from the wrong audience. Optmyzr’s Negative Keyword Finder scans your search terms and flags words that drive costs without conversions.
You can then add them as negatives across campaigns or build lists to keep them organized.
Target ROAS
Target ROAS automatically adjusts bids to maximize the revenue you generate for every dollar spent. Instead of simply chasing conversions, it focuses on the value of those conversions by predicting which clicks are likely to drive higher revenue.
When to use it
- Ecommerce businesses or lead gen models with clear revenue attribution
- Campaigns with at least 50 conversions in the past month (to give the algorithm solid ground to optimize)
- Advertisers who prioritize profitability and return over sheer conversion volume
How to make it work
- Assign accurate values to all conversions (online sales, closed deals, contract values, etc.).
- Feed back as much data as possible into Google Ads, including enhanced conversions, customer match, and offline CRM data.
The more context you provide, the better Google can differentiate between high- and low-value leads.
Optimize Value Rules – VBB makes it easy to apply conversion value rules directly in Google Ads. Instead of treating every conversion the same, you can tell Google that some audiences, devices, or locations are worth more.
Let’s take an example to understand this better.
- Each row represents a traffic segment (e.g., Austin, United States or Berlin, Germany)
- The Score column shows how valuable that segment is compared to others, based on your performance history
- Optmyzr then recommends a Suggested Adjustment (like x1.05), meaning you can tell Google that conversions from Austin are worth 5% more
- You can review or edit the New Adjustment column before applying, and even control how aggressive the system should be
When you hit Apply, these rules are pushed directly into Google Ads.
That way, Smart Bidding strategies like Target ROAS or Maximize Conversion Value learn that certain locations, audiences, or devices deserve higher bids because they drive higher revenue for your business.
Test before you commit
Not sure if Target ROAS will beat another strategy like Max Conversion Value? Optmyzr’s Express Optimization lets you spin up controlled experiments in just a few clicks.
You can test different bidding models side by side, monitor results, and then switch to the winner permanently without rebuilding campaigns from scratch.
Maximize Conversions
Maximize Conversions automatically spends your budget to drive the highest possible number of conversions. It works a lot like “Maximize Clicks,” but instead of clicks, it optimizes for conversions.
When to use it
- Campaigns where the goal is to scale conversion volume, not control CPA or ROAS
- New campaigns where you don’t yet know your ideal CPA or ROAS targets
- Situations where you want to quickly capture as many leads or sign-ups as possible within your daily budget
How to make it work
The strength of Maximize Conversions is speed, but that can also be its biggest weakness.
Since it will aggressively spend your entire daily budget, pacing becomes critical. As we saw with Target CPA, Smart Bidding only works if it has consistent fuel. Optmyzr’s Spend Projection helps you keep that flow steady, showing whether you’re likely to overspend early in the month or starve the algorithm of signals by underspending.
Traffic quality is just as important.
Maximize Conversions will happily chase any conversion, even low-quality ones, if irrelevant clicks are slipping into your campaigns.
We’ve already seen how Optmyzr’s Negative Keyword Finder helps filter those out, but you can also go deeper with rule-based negative keyword management. With rule-based optimizations, Optmyzr can automatically add non-converting terms as negatives at the campaign or ad group level.
You decide the rules, the system does the grunt work. Check out some pre-built strategies here!
Maximize Conversion Value
Maximize Conversion Value automatically adjusts your bids to generate the highest total revenue possible from your budget. Instead of chasing more conversions, it prioritizes conversions that bring in more value.
When to use it
- Ecommerce businesses with a clear revenue-per-conversion model
- Lead gen accounts where different deals carry very different values
- Campaigns with stable tracking and enough conversion data to support value-based optimization
How to make it work
Since this strategy focuses on value over volume, it depends on the quality of your value signals. If every conversion is tracked as equal, Google won’t know which ones truly matter for your business.
As we discussed with Target ROAS, Optmyzr’s Value-Based Bidding (VBB) tool makes it easy to refine conversion value rules in Google Ads.
Next, you need to focus on budget pacing. Optmyzr’s Budget Optimization tools show impression share lost to budget and suggest reallocations.
For example, if brand campaigns are spending heavily but competitor campaigns generate a higher ROAS, Optmyzr will flag it so you can shift spend to maximize revenue impact.
To stay proactive, you can also set up budget alerts.
Instead of manually checking whether campaigns are overspending or starving throughout the month, Optmyzr notifies you when spend drifts off target.
That way, you can catch pacing issues early and reallocate before Smart Bidding wastes budget on low-value clicks. Alerts can even be sent directly to Slack or Teams, so you and your team don’t miss critical changes.
5 best practices for Google Ads Smart Bidding strategies
1. Have sufficient budget
Smart Bidding needs room to work. Google’s algorithm learns by testing, so if your budget is too tight, it won’t gather enough data to optimize effectively. Always check whether you’re at risk of overspending or underspending, and adjust pacing before performance suffers.
2. Give Smart Bidding time to learn
Machine learning doesn’t optimize overnight. Campaigns usually need at least two weeks to gather enough conversion data to make reliable adjustments. Avoid making constant changes during this learning period, or you’ll reset progress.
💡Reddit Tip: Use Portfolio Bidding for Low-Volume Campaigns One expert advised: "If you don't have 50+ conversions per campaign, you need to wrap it in a portfolio bid where the individual campaigns then meet that threshold.” This allows Smart Bidding to learn from the combined conversion data across all campaigns, reaching Google's 50+ conversion learning threshold even when individual campaigns fall short. Check out the full thread here! |
3. Segment campaigns thoughtfully
Well-structured campaigns give Smart Bidding clearer signals. Group ads by similar themes or target audiences, and use bidding rules to automate adjustments for factors like device, location, or time of day.
Remember not to over-segment. Modern AI systems often perform better with consolidated data, so find the right balance between structure and flexibility.
4. Use conversion adjustments to steer performance
Not all conversions are equal. Seasonal shifts, lead quality, and business priorities should all influence how you value them. Conversion adjustments and value rules let you guide Smart Bidding toward the conversions that matter most for profitability.
💡Reddit Tip: Channel-Weighted Values. One Redditor shared that you should use phone and form tracking with offline conversion uploads to assign different values to lead types. For example, if your clients consider phone calls less valuable than form submissions, weight them accordingly so your campaigns optimize for what truly matters. |
Also Read: Value-Based Bidding: What Is It, Best Practices & Pitfalls
5. Optimize your ads and landing pages.
Smart Bidding can bring the right traffic, but it can’t fix weak creative or poor user experience. Ads should align closely with search intent, and landing pages should deliver on the promise in the ad. If there’s a mismatch, the algorithm ends up paying for wasted clicks.
💡 Remember: As Google leans more on AI to generate creative assets, inconsistent messaging or poor page experience will only amplify bad results. |
Steer smart bidding with Optmyzr
At the end of the day, Smart Bidding isn’t a magic switch. Each strategy has its moment:
- Target CPA if you want steady lead costs.
- Target ROAS if revenue predictability drives your business.
- Maximize Conversions when sheer volume matters.
- Maximize Conversion Value if profitability is the north star.
The real skill isn’t choosing one strategy forever. It’s knowing when to change lanes, when your campaign outgrows Max Conversions, or when your CPA target no longer reflects reality.
Optmyzr helps you spot those inflection points before they become expensive mistakes.
From pacing budgets with Spend Projection, to testing new strategies with Express Optimization, to uncovering weak pages with Landing Page Analysis, we give you the needed guardrails.
Thousands of advertisers already manage $5B+ in ad spend with Optmyzr. The question is: are you ready to stop reacting to Smart Bidding and start steering it?
Start your fully-functional 14-day free trial today! (no credit card needed)
FAQs
1. What exactly is Smart Bidding, and how is it different from regular automated bidding?
A. Smart Bidding is a subset of Google Ads automated bid strategies that uses AI to set bids for every single auction, known as “auction-time bidding,” to maximize conversions or conversion value.
It includes strategies like Target CPA, Target ROAS, Maximize Conversions, and Maximize Conversion Value. Unlike regular automated bidding options (like Maximize Clicks or Target Impression Share) that focus on volume or visibility, Smart Bidding specifically optimizes for your conversion goals.
2. What signals does Smart Bidding use to optimize bids?
A. Smart Bidding taps into a wide range of auction-time data, not just the usual device, location, or time of day. It also considers signals like browser, operating system, language, search query context, and combinations of those factors. This depth allows it to bid more precisely on long-tail or low-volume keywords by modeling query-level performance.
3. How much conversion history do I need before switching to Smart Bidding?
A. Google suggests waiting until your campaign has at least 30 conversions in the past month to lean into Smart Bidding, or 50 conversions for Target ROAS to give the algorithm solid ground to operate on.
4. What’s Smart Bidding Exploration, and when should I use it?
A. Smart Bidding Exploration is an opt-in add-on that helps the algorithm identify high-potential queries outside your existing reach, especially when you’re using broad match, DSA, or AI Max for Search targeting.
Instead of uniformly lowering your ROAS target, it bids selectively on new segments with higher conversion likelihood. It’s ideal for scaling, but only when your budget isn’t constrained. It’s best to run for at least six weeks to give the algorithm enough time to learn and perform.
