What is the difference between an automated bid strategy and a smart bid strategy?

Short Answer: An automated bid strategy like maximize clicks aims to get as many clicks as possible without fully optimizing for factors like ad Rank or cost per click, while a smart bid strategy builds a customer profile based on converters and targets similar profiles to secure more conversions.

Full Explanation

Automated bid strategies, for example maximize clicks, focus primarily on increasing the number of clicks. However, they do this without adjusting for other important performance metrics such as ad Rank or cost per click. This means the strategy is not fully smart—it prioritizes volume of clicks potentially at the expense of quality or efficiency.

In contrast, smart bidding strategies are more advanced and data-driven. They analyze the profiles of people who convert through your campaign. Using this customer data, the smart bidding system then targets or bids for more conversions by finding other individuals who share similar characteristics to your converters. This approach aims to improve campaign effectiveness by focusing on potential customers most likely to convert.

Step-by-Step Breakdown

Automated Bid Strategy:
- Focuses on maximizing click volume.
- Does not consider ad Rank or cost per click in its bidding.
- Sacrifices some efficiency to get more clicks.
Smart Bid Strategy:
- Creates a customer profile from users who convert.
- Targets other potential converters with similar profiles.
- Aims to maximize conversions rather than just clicks.

Real Examples

An automated bidding strategy such as maximize clicks might increase the traffic to your ads regardless of how many of those clicks actually result in conversions. This might lower your cost per acquisition but could also increase your overall ad spend due to less targeted bidding.

A smart bidding strategy instead learns from those who complete desired actions and adjusts bids accordingly, helping to attract more users likely to convert based on learned behaviors.

Common Mistakes

Assuming automated bidding is fully optimized when it mainly chases clicks.
Expecting smart bidding to focus solely on clicks rather than on actual conversions.
Neglecting to differentiate between the goals of each bidding strategy.

FAQs

Is maximize clicks considered a smart bidding strategy? No, maximize clicks is an automated bid strategy but not fully smart since it prioritizes getting clicks over other performance metrics.
How does smart bidding know who to target? It creates a customer profile based on converters and targets similar potential converters.
Which bidding strategy is better for conversions? Smart bidding is better designed for improving conversions by focusing bids on users with profiles resembling those who convert.

Key Takeaways

Automated bid strategies maximize clicks but do not fully optimize for cost or ad Rank.
Smart bidding strategies analyze converter profiles to find similar potential converters.
Choosing between the two depends on whether the goal is to increase clicks or conversions.