Will Maximize Conversions bidding inflate my CPCs?

It's time to address the skepticism and anxiety surrounding Smart Bidding in Google Ads. In Episode 42 of Inside Google Ads, Google Ads Coach Jyll Saskin Gales tackles common objections and misconceptions around AI-powered bidding, emphasizing that while Smart Bidding may have short-term drawbacks, it ultimately delivers better results in terms of conversions, ROAS, or customer acquisition cost.

Key Smart Bidding topics discussed:

• Manual bidding vs. Smart Bidding for brand search campaigns
• Maximize Conversions bidding for new Google Ads campaigns
• Target impression share bid strategy: is it Smart?

Plus, be sure to stay tuned 'til the end of the episode to test your skills with a new Insider Challenge!

You can get episode transcripts delivered to your inbox each week by signing up for free at https://free.jyll.ca/?utm_source=podcast&utm_medium=referral&utm_campaign=episode42

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Google Ads Account Audit
Jyll's Google Ads account audits are so helpful in driving better results that Google reps are recommending her to their clients. Get Smart Bidding on your side once and for all. Learn more at https://jyll.ca/pages/google-ads-account-audit?utm_source=podcast&utm_medium=referral&utm_campaign=episode42

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Transcript

I'm a proponent of Smart Bidding. There are certain things that humans will always do better than AI, but bidding in Google Ads is just not one of them. 

You have a lot of anxiety about Smart Bidding. I know because I see you in my comments, in my DMs, in our coaching calls, raising very valid objections about switching from manual to automated bidding. 

I get it. Change is scary. Automation feels uncertain. 

Take a deep breath. We'll get through this together.

I'm your host, Jyll Saskin Gales. I spent six years working for big brands at Google, and now I work for you. 

This is Inside Google Ads Episode 42: Smart Bidding Skepticism.

Our first question comes from digital.trendz_saquib on Instagram, and they say, just one question, don't you think it will have an inflated CPC? Also, giving Google full control on how much to bid on each keyword, considering within the recent few months CPCs have gotten really high. On the other side, we can still go with a Portfolio Bidding strategy, but limit bids through here. What do you think will be a good approach or stick to manual CPC?

That was a lot of questions. So I told this user I would respond in a podcast episode. 

When you use Smart Bidding, your CPCs will likely be higher than using Manual Bidding. But that's a feature. That's kind of the whole point. It's not a mistake. You see, when you use Manual Bidding, you're telling Google that your primary goal is cheaper clicks. So you get cheaper clicks, but you often miss out on the most valuable clicks, which cost more but are also more likely to convert. 

With Smart Bidding, however, you're telling Google that what you care about is revenue or customer acquisition cost or ROAS. You don't care about CPCs and Google will work with you to achieve those goals.

Now, there is this workaround where you can use a Portfolio Bidding strategy with a Smart Bidding strategy and then just apply it to your one campaign and set a maximum CPC cap. 

I don't like to do this.

It's sort of like this Goldilocks solution, of a little of column A, and a little of column B. And you know what? Fine. It is better to do that than just stick with Manual bidding, in my opinion.

AI will make mistakes. You'll make mistakes. But you need to give the AI sufficient time and budget to learn from and the whole picture to learn from.

It's like going to see the Mona Lisa but standing two inches away so all you see is her clothing. You would say, “What a boring, dark painting.”

You don't have the full picture. Step back. Let the AI learn on the full picture. Appreciate the full beauty of the Mona Lisa.

Or maybe you think the Mona Lisa is overrated, whatever. But the point is, you can't draw your own conclusions, you can't learn and AI can't learn, without seeing the whole picture. So if you're using Portfolio bidding but a CPC cap, you're not getting the true full picture.

Inside Google Ads is exclusively sponsored by Optmyzr, the ultimate platform for managing Google, Microsoft, Amazon, and paid social ads through automation layering. If you're thinking of taking on new clients or more clients and you need a little help, you should look into Optmyzr. One of my coaching clients recently started taking on their first Google Ads management clients. They were a Looker Studio devotee and very good at it. But now… they're using Optmyzr to save time and stay on top of account performance, review optimizations, and problem solve with ease. 

You can get a free, full functionality trial to test out with your clients at Optmyzr.com. That's O-P-T-M-Y-Z-R dot com or follow the link in the episode description.

Our second question today is actually a question I got from two of my industry colleagues on LinkedIn. Georgi Zayakov said, how about Manual Bidding for brand campaigns? Some of us are making very good experiences with it. 

And then Matt Bowen, who's actually also been a guest in my Inside Google Ads course before, also said on LinkedIn, Manual still wins in Branded Search campaigns in most cases in our data sets. Target ROAS inflates CPCs and drives down returns and Target Impression Share does the same. Not always, but 8 out of 10 times. 

All right, mad respect to Georgi and Matt, but I still think even with a brand campaign, you should be using Smart Bidding and specifically Target ROAS or Target CPA. A few reasons why. 

Your time or your agency's time has a cost. And so even if it's true that you're able to eke out slightly better efficiency via Manual Bidding - which by the way, I don't believe is true, but let's just say that's true - the trade off is all the time that you have to spend manually bidding, bid adjustments and data analysis and daily changes and on and on and on. When you could spend that time on other activities that would have a much larger and more sustainable impact. For example, creative testing, landing page optimization, new ad formats, audience testing, et cetera. So that's one reason why I don't buy that argument. Even if it's true that you get slightly better results, usually it's just not worth it.

And the flip side of that is I actually don't think you get great results more of the time. What I often see on coaching calls for clients who've been using this strategy, either because it's what they were taught or it's what their agency is doing for them, is if you go to their search terms from their Branded campaign, you're going to see a lot of irrelevant stuff in there. And you're going to see a ton of spend going towards those mysterious other search terms. 

Why?

Because you are not optimizing for conversions. You're just optimizing for the cheapest clicks. So you can end up with a lot of searches that get into your brand campaign that have nothing to do with your brand.

Why?

Because Google thinks it's a close enough variant. Gotta love those close variants. And you're not telling it that what you care about is conversions. You're telling it that what you care about is the cheapest clicks. So yes, even for a Brand campaign, especially for a Brand campaign, the best lever for optimization I've seen is putting it on Smart Bidding with a Target CPA or Target ROAS. 

Look, if you're still listening to this episode, it's because you either believe what I'm saying or you want to believe what I'm saying, but still don't feel confident it will work for you. Why not get me to audit your account? 

There are exceptions to every rule and you never know for sure until you apply it to the specifics of your business whether you might be the exception. Because yes, I see hundreds of Google Ads accounts in a year. There are some campaigns where I do end up recommending Manual Bidding, for example, but they are the exception, not the rule. 

You can learn more about my Google Ads account audits on my website, jyll.ca, that's J-Y-L-L dot C-A, or follow the direct link to my account audit page in the episode description.

Our final question today comes from Alamgir Anwar on LinkedIn. And they say, Maximize Conversions for a new account with no conversion history? I haven't tried this strategy. And this is in response to something I've shared on this podcast before that generally I like to start brand new campaigns on Maximize Conversions, even in a new account, even with no conversion history.

Now I'll say sometimes it doesn't work. And by it doesn't work, I mean it barely serves. This usually happens if it's in an account that's in a super niche industry or where there's super limited search volume. We have Exact Match and we're trying to go for a very specific part of the market. In which case, we'll then switch the bid strategy to Maximize Clicks and we'll start to get clicks through, but usually that's just a bandaid because in this scenario, the problem isn't the bid strategy. The bid strategy is doing what it's supposed to do. It's trying to maximize conversions and it doesn't think it can get conversions from those searches so it's not serving. It's doing what it's supposed to do.

The problem is actually low demand. And so Max Clicks may get a bunch of clicks through, but those clicks are going to have to convert. And the cheaper clicks that you're getting through Max Clicks may not be the same as the clicks that are more likely to convert. 

I say all that to say, yep, I still recommend Maximize Conversions for new campaigns and new accounts.

Look, our industry is divided in two, but it's not Google sympathizers or Google haters. It's people who are trying to hold on to the way things used to work and people who are accepting that Google Ads has changed and trying to work with the system to drive sustainable performance. 

I'm in the second camp. If you're not quite there yet, you're still welcome here. Perhaps it'll take a few more episodes to completely convert you over to the automation side because automation is not the future. It's now.

Today's Insider Challenge is this. A bid strategy we have not discussed here is Target Impression Share. Target Impression Share is an automated bid strategy, but it's not a Smart Bidding strategy. What is a situation in which you might want to use a Target Impression Share strategy? Or would you never use Target Impression Share? 

The beauty of the Insider Challenge is there's no right or wrong answer, just an opportunity to stretch your brain on real life Google Ads problem solving.

Last Episode's Challenge was this. Let's say you want to test RLSA, Remarketing Lists for Search Ads. What remarketing lists do you have available to use? Which would you like to use? And what keyword strategy will you try with those remarketing lists?

In my Google Ads account, I have YouTube remarketing lists, website remarketing lists, and the new Google Engaged Audiences list. Please ask me about that, by the way, because I would love to talk about it in an episode.

For my business, I would use my YouTube remarketing list to test RLSA on a dynamic ad group. My website is pretty well optimized, so whether it's my coaching or my courses or my audits, I would love to advertise on search, but I've done that before. CPCs in my industry are expensive, about $20 plus per click. Smart Bidding? Yes. It just doesn't make sense for the economics of my business to do that. But if someone has watched me on YouTube, and then they're searching for what I offer? Well, that's a different story.

I'm Jyll Saskin Gales and I'll see you next time Inside Google Ads.