Surfside PPC Podcast

What's up everyone? Welcome to the Surfside PPC podcast. Today we're going to be going over smart bidding. So, I'm going to go over the different types of smart bidding strategies and essentially anything when we talk about smart bidding is bidding for conversions or bidding for conversion value. So, I came right over here to portfolio bid strategies because it makes it easy to see some of the different bidding strategies we have here. Not all of these are considered smart bidding strategies. It's really only these four. Maximize conversion value, maximize conversions, target return on ad spend, target CPA. Google made a huge bidding update in August 17th where basically what they said is the targets that you set. So let's just say you have a CPA target of $100\. Google used to actually try to beat that target. So they used to say, "Okay, we are going to try to hit that target and actually beat it if we can." So I've had accounts where I have target CPA set at 100, 125, 150 over the last year and a half where our cost per conversion ended up coming in way under those numbers. So you could actually continue bringing down your target CPA. With the new update, I'm finding Google really is trying to hit those numbers. So it's an easy quick way for Google to say you're probably going to spend more in every ad auction and we're not going to try to give you the best efficiency possible. We're going to actually try to hit the number you set. Now, the positive of this is you could actually use it as a constraint. So, if you say, "Hey, I don't want to be overspending unless Google can hit my cost per conversion target of $50, $75, $30, $125, wherever you have it set, Google's going to try to hit that and maximize your spend within it." It's really changed the way I bid. And truthfully, I think Google Ads has got a whole lot harder since since the bidding update took place. So, let's kind of get into our podcast today, what we're going to be going over and Google Ads smart bidding in 2026 and then going into 2027\. So, we have how it works, how to set it up, right, and then what changed in 2026, which I've already kind of started going over. So, number one thing with smart bidding is Google is setting a bid in every auction based on a variety of signals. It used to be you target a keyword, you set a manual bid for that keyword, you try to figure out what the right bid is to set, that's profitable for your business. In the past, that actually worked better because not everybody had conversion tracking. Everybody was just bidding based on, hey, this is how valuable this keyword is to our business. We're willing to spend $3, $4, $5 a click. Now, essentially, what you're trying to do is say, hey, Google, here are all of my valuable conversions. So, all of my KPIs. If you're in e-commerce, it might just be purchase with purchase conversion value. So, if you're running a Shopify store, that's really the main thing you want to optimize for. It makes your smart bidding strategy easier to use and it also makes it, you know, really easier to send good data back into Google because you're they're seeing every sale and the value behind that sale. From a lead generation standpoint, your conversions are going to look a little bit different. So, if we come over here to my goals and all my conversions, you really can't talk about smart bidding without talking about conversion tracking because it's such an important aspect. Right here, we have Surfside PPC, Google Analytics for web purchase, Google Shopping app purchase, Google shopping app purchase one. If we scroll over here, you can see I actually did a purchase this morning. So, that one pinged. This one has not pinged. So, this is actually one I can remove. And you can see if it's misconfigured, there's probably something wrong with it. It's really just this is the one that overtook that one. And this one hasn't pinged since February 14th. So, this is clearly not tracking correctly either. So, the only one that's tracking correctly is this one, which I did have. This does tie to a purchase last event ping. So, if I turned on my campaign, I could turn this on right now and start optimizing towards actual purchases on my website. Now, I have a unique website where I have leads and I also get purchases. because I do have paid consulting. You can purchase a course through a couple courses through my website. You can actually purchase management through my website. Not that it ever really happens. Add to cart, begin checkouts. Those are other signals you can optimize for, but ultimately you want to be optimizing for purchases and conversion value. Now, you're like, when is he going to get to bidding, but this is all part of bidding and why it makes sense. So, you need the complete picture for this to really make sense. Over here, we have the submit lead form actions. So, if we look at a lot of these, they're just not firing correctly. But, you always want to make sure you have your conversion tracking set up first and you know, what the valuable conversions are within your account. So if I'm like okay submit lead form or contact form is one of the ones I want to optimize for primary including account level goals. Yes. Perfect. Then the call one. So calls from ads is always a good one cuz it's 60-second plus. This is always a good call cuz it's website call forwarding. Another 60-second plus phone call. Mobile clicks the call down here. Sometimes over report. So it's one where if you're setting values actually for your individual conversions then you can actually say okay we want to value call from an ad and a call from our website higher than mobile clicks the call and maybe even a submit lead form. So, whatever is the most valuable for your business, you could actually go into each of the individual conversion actions and you can say, "Okay, this one here I, you know, I'm going to open and what I'd like to do is value it. Every single conversion is worth $200 to my business." So, if if this is for me for Surfside PPC, then I can basically say, "Okay, these calls, which tend to turn into qualified phone calls, where at the very least I'm talking to somebody who's interested in my service are worth $200 for my business. A lead form, which let's just say I close 30% of lead forms, I could say not as valuable, still a really valuable thing, I can set at $100\. Mobile clicks to call, text messages, things like that, I could say let's just set these at $25, $50, you know, set them a little bit lower. If we are finding those conversions are driving good results, if I get a text message that tracks back to Google Ads that I can land client, then sure, we can increase the overall text message value there. All of this to say basically when you are within your campaign aigns and you're running a campaign, you can choose the way you want to bid based on the goals that you have. So, if you're running a performance max campaign, the only thing they allow is smart bidding. So, it always makes for a good example for these types of videos because when you go into performance max, they're only going to give you the option of smart bidding strategies. So, you need to have conversion actions that you're optimizing for. In this case, there's just a mish mash of random conversion actions, but let's just say it's purchases. You just have purchases there. Then, that's the only thing Google is going to optimize for. If I set all of these, Google is going to optimize for all of these conversions since I have them set. Now, maximize conversion value. What Google's going to do over time is figure out these are the conversions that drive the most value. So, that's where purchase value and being able to send that dynamically into Google Ads makes it a whole lot easier to say, hey, last month we spent $3,000, we ended up with $20,000 in conversion value. So, now we have an idea of what our return on ad spend is, and we could try to scale that up. Or we could just kind of keep telling Google you know, keep trying to hit this target return on ad spend at this budget. We're happy with these results and you could you could kind of call it a day in Google ads. But from a bidding perspective, basically what you want to do is understand, okay, if I come in here, a lot of times your starting point should be maximize conversions. I have gone completely where brand new campaigns, I go right into conversionbased bidding. I target the keywords I think are the going to be the best performing keywords for the campaign. I set up conversion tracking. I set up my landing pages. I make sure everything is configured the way it needs to be configured. And Then I just say, "Let's go maximize conversions." And part of you crosses your fingers and said, "Let's hope Google sends some really good conversions fast." Because there are campaigns you launch that work. And there's campaigns you launch where cost per conversion tends to trend a lot higher than you want it to. So same thing with maximize conversion value. The biggest difference is maximize conversion value should only be used if you are actively valuing your conversions. So for a purchase type conversion, you should always use maximize conversion value because then what Google's going to do is naturally after more purchases and if they can find what are high value purchases, whether it's specific products that perform well or whatever it might be, Google's going to try to go after more purchases that way. If we set values for phone call leads, submit lead forms, then even if we're using maximize conversion value, over time, Google's going to try to drive the conversions that give you the most value. So, if I put calls from ads, website phone calls much higher, those are going to be the conversions that Google prioritizes. And that's the whole point of smart bidding. Now, it's not a perfect clients. There are times where, you know, I set a target CPA at 100\. I go into my client's account and they're trending at 225 or they're trending at 200\. And in that case, sometimes you're better off saying, you know, what makes the most sense for this client? Are they a volume client that is willing to overpay for conversions or willing to spend more if we can get more conversions? Then sometimes you're better off just saying, let's go maximize conversions. Let's set a budget that makes sense. If we set this at $200 a day, then we should spend $6,000 over the first the month, we're going to actively manage the campaign, watch the search terms, make sure we're we're getting clicks from really targeted keywords, and ultimately getting conversions coming in. So, the first week, the second week might not be the best performance, but the next couple weeks, you should have pretty strong performance overall. If your budget is set at $200 a day, you run a campaign for, you know, the previous month or the previous two weeks, and you're finding our current cost per conversion at our $200 per day budget is $125, and we're driving a good volume of leads at a100 $25 target CPA or $125 cost per conversion, then that's when target CPA bidding makes more sense. If you're like, "Hey, we're we love getting conversions at 125." What we want to do is set this as our target CPA. Click on save. And then from there, you want to increase your budget slightly. Now, you're going to be like, why would we increase our budget? Aren't we going to spend more? Potentially, but generally, the good part about target CPA is if we run our budget at $200 a day and we are getting target CPA, you know, rand cost per conversion at 125\. We can go in here and say, let's set our cost per conversion at 125\. That's what it is, the previous 30 days with $6,000 in spend. So, we're driving good conversions, a good amount of conversions. And then up here, what you can do is say, okay, we're going to keep not saving this. We're going to save this at 125\. And then up here within our actual budget, if you say, I really want to try to get to two conversions a day. Then come in here and just set a $250 budget, not $1250, a $250 budget. And 125\* 2 250\. This is ideal. It doesn't always work out that way. So, what I would probably try to do is say, let's set our budget at 300\. Let's keep our target CPA at 125\. You could even lower this number if you're like, I'd rather get this number a little bit lower. You can increase it if you're willing to pay more per conversion, but Google's trying to hit this number. So, if Google already hit this number as a maximized conversions bidding, then I would set it at this number. As long as we're spending our budget, if we're limited by budget and we're spending our budget in full, we should theoretically drive to conversions a day and over the course of a month, we should be pretty close to this for cost per conversion. Doesn't always work out that way, but generally what I find is if you set a target CPA, you can increase your budget pretty drastically as long as you're comfortable paying for conversions at this number. If you're trying to bring your spend down if you're trying to improve efficiency, it's fine to keep your budget high. Just keep bringing down the other number. So, bring down this number to 120\. Bring down this number to 110\. If you're still getting conversions, just keep bringing that number down. I've had times where I've started at 40 get down to 37, get down to 33, get down to 29, and then at 29, you're like, "Okay, we're starting to lose spend. We're starting to lose volume. Let's go back up to 33 and client's happy. We're getting volume. We're spending our budget." You know, that that's kind of the ultimate goal of what we're looking for. So, that's really what you're looking for here within your settings. Now, the opposite, not opposite, but that the other one is going to be maximize conversion value. The main difference between this is Google's actively trying to give you the highest conversion value possible. They're not trying to drive you as many conversions as possible. They are going after conversion value. Now, this is a really good bidding strategy because if you're pulling in dynamic purchases, you can set a target return on ad spend. I could have a client that says, "We really want to keep this number above 400." Then we see how much we can spend at 400, how much we can spend at 425, how much we can spend at 450\. I have some clients where we're trying to increase efficiency. We're currently at a 350 target or 3 or 350 return on ad spend. So, in here, it's like, let's try to increase efficiency. We're going to cut increase this to 400%. See if we spend see if we hit this target. Google does tend to come pretty close to the targets you set if they're realistic. If I come in here and say we want to hit 1,500, you know,%. You're probably just not going to spend much of your budget because Google's only going to spend your budget if they're confident they can hit this target. So, you really want to find what is the ideal target. What are we actually hitting the last 30 days? What are we hitting the last 14 days? What are we hitting the last 7 days? I generally go with the last 30 days of data. And that's a lot of times what Google is using as well. So if your target return on ad spend is 600% over the last 30 days, you kind of go to the client and say we can keep this, you know, try to keep it steady, try to maximize spend. That's one option. So keep it at 600% maximize budget. The second option is saying, okay, what if we're really going for more volume? We want more sales. We're willing to sacrifice a little bit of return on ad spend. You know, really simple, keep your budget way up to the moon and just bring this number down to 500%. And it's like we're willing to spend a little more. were willing to be a little less efficient, but our goal is to still have a 500% target return on ad spend. And in this case, let's just say your client wants to spend $1,000 a day. Sometimes you're not going to spend that budget. A lot of times you're not going to spend that full budget if your target return on ad spend is set too high. So if your client's like, "We want to spend $1,000 a day." Sometimes the easiest way to start with that is to say, "Okay, we're going to take our bidding. We're just going to go maximize conversion value for a week and we're going to see what our conversion value looks like this week. This is for our campaign. with basically no data. Set it like this for a week. It will spend the budget. So sometimes I bring that number down. But once you have some level of target return on ad spend, if your historic target return on ad spend is 500%. Keep the number right there. Set your budget high. And basically what's going to happen is you maximize spend while also hitting a pretty strong return. So smart bidding is really it's not an exact science. There's a lot of different ways to do it. If you are running lead generation campaigns and you're like, "Hey, we have lead forms, we have phone calls, they're being valued at cert values. Then when you're your starting point with a campaign would always be set your budget. You know, let's come here to medical and home services. Set a budget you feel comfortable with spending over the course of a month. If you're like, I don't want to spend more than $1,500 on testing, come in here and spend 50\. Now, some industries that's not enough, but for a lot, if your cost per click is $5 to $10, that's fine. If your cost per click is $30, it's just not enough budget. Maximize conversions. Click on save. Let this run. Now, you still want to watch your overall results. We would want to make sure we have our phone call leads in there, but let that run. And over time, what's going to happen is you have submit lead forms, phone call leads, Google's going to process every single one of those conversions. If you have a value assigned to every single one, now over time, you can say, "All right, last month we had at $50 a day, we got 40 conversions. We're bidding with a maximize conversions bidding. We want to get more conversions this month. So, we're going to set a target CPA. We're going to set it at 35\. And maybe we increase our budget slightly, and our goal is to be a little more efficient, spend a little bit more budget." The other option is saying, "Let's leave maximize conversions. We're seeing good results. Scale up the budget slightly. Let this just continue to run the way it's running. But for me, the thing that I like to do is setting a target CPA and making sure this number makes sense for your business. Now, if you do have these valued, so if you're valuing submit lead forms, phone call leads, and you know, you have two to four weeks of data, then you can come in here to bidding and say, okay, we want to use the target return on ad spend bidding strategy, and our target return on ad spend the last 30 days in this campaign is, you know, 400%. So, we're just going to set 400 or 425 target return on ad spend. Keep everything else the same. And now, Google's going to go after the conversion goals that you have valued higher. So, again, it doesn't always work perfectly. I've done this before and it doesn't work. I've done this before and it does work. But these are some of the different levers you can pull from a smart bidding standpoint. Now, if you come over here to tools, budgets and bidding, and bid strategies, you can actually find portfolio bid strategies. And with these, you can apply the same bidding strategy to multiple campaigns. So, name it. You can actually select multiple campaigns from the drop down list. You can create a shared budget to use the port portfolio bidding strategy. And you can say, you know, target CPA, we want to keep at 75\. The other thing you can do in here is set a maximum bid limit. Now, if your cost per click tends to be really high, let's just say your average cost per click is $25\. Within the maximum bid limit, I'm pretty comfortable in that case setting this around 40 or 50\. My general rule of thumb is take like half of your target CPA So we could say, you know, 3750, I think, is the exact half number. Don't bid any higher than that because once we start bidding higher than that, we're just not getting ourselves enough clicks to make this actually work. You can also do similar things with the target return on ad spend portfolio bidding strategy where we come here, select campaigns. You can select the maximum bid limit. Now, you can't use portfolio bid strategies on performance max campaigns. They're only for search and shopping. So the goal is really just find a few search campaigns that are working. If you have a shopping campaign working, set a target because it's going to help your overall results in the long run, especially with the Google bidding update that basically says Google is now going to try to hit targets rather than beat targets. So, coming over here to smart bidding, Google says to bid in every auction, you really want to match the strategy, whether it's maximize conversions or targets you gave for leads, maximize conversion value, or target return on ad spend for e-commerce. Is every conversion worth the same to your business? If not, set values for them. Track only real sales and leads. You don't want to be tracking button clicks or things that aren't actually turning into leads. There are certain things I track. You know, I say button clicks, but I do track that. But that's one of those I watch closely and if I see too many of them coming in and it's not matching the client's call numbers, make it a secondary. Stop optimizing for it. Just, you know, one of those signals that at times can go a little off the rails. But for the most part from search campaigns, I do find they work pretty well. Would you pay for every primary conversion to your account? So, this is where you need to ask yourself, how much would I pay for a phone call lead? Well, it's $250\. Great. So, now what you want to do is make sure that is prim And then when you're running your campaigns, you just need to make sure you have enough budget going into your campaigns so that you are getting consistent conversion data. Start with target then leave it alone. I generally say you don't want to set your, you know, change your targets too much. Target CPA is one where I review generally on a bi-weekly basis just okay, what does my bidding look like? What do our cost per conversion look like? Are there things we can improve or learn from within our bidding strategy? So, let's wrap this up here. What changes in 2026 since August 17th? A10 target CPA running at $5 cost per conversion will now probably get closer to $10 per conversion. Smart bidding exploration finds new searches. So return on ad spend lets you reach new people in new search categories. And there's an return on ad spend tolerance. So basically what you are willing to spend per conversion or per return on ad spend is going to be part of the thing that dictates where your marketing is going to go after and which new search it's going to go after as well. Is your target set where you want to land? Always an important always an important question. question, but this will wrap up Google Ads Smart Bidding and the Surfside PPC podcast. So, if you have any questions about any of this, just just leave them in the comment section. Thanks for watching my video and listening to my podcast, and make sure you subscribe to the Surfside PPC YouTube channel.