Google Ads Smart Bidding: 2025 Strategies & Tips

Introduction

The rapid fire of auctions, speed, context, and decision-making are going to become extremely important for digital advertising in 2025 and beyond. This is why Google Ads Smart Bidding feature will be at the heart of many high-performance campaigns. Smart Bidding uses Google’s machine-learning algorithms to determine optimal bids for advertisers based on historical data (such as device, location, timing, etc.) and real-time signals being sent from Google through user behaviour at a point of sale, therefore guaranteeing that you target the right customers at the right times and with the right amount of spend.

So what does this mean to you? Simply that manual bidding is going to struggle to keep up. With thousands of auctions being completed every second, Google can only provide optimised bids when assisted by an AI-driven automated bidding system capable of analysing multiple variables/optimising to achieve results during each auction marketplace. Advertisers using Google Ads Smart Bidding can expect to achieve higher conversion rates, improved return on ad spend (ROAS), and optimised budget usage than those using traditional manual bidding methods.

Smart Bidding Basics

Google Ads Smart Bidding is Google’s artificial-intelligence system that allows advertisers to set the best possible daily bid based on real-time signals from Google. These bids are typically set automatically on behalf of advertisers using information held within the advertiser’s Google Ads Account and experience-based on historical data about the types of ads being purchased, along with other variables such as the current cost per click (CPC) for each ad and the number of impressions being generated for each keyword.

What Is Smart Bidding?

Google Ads Smart Bidding utilizes automatic bid features and evaluates several signals, including:

• Device type (mobile or desktop)
• Geographic Location (city/country/region)
• Time of Day
• User Intent to Purchase
• History of User Interaction

Based on these signals, an algorithm determines how much to submit/apportion to your bid for each individual auction.

How Smart Bidding Works

Google optimizes Smart Bidding at auction time by using millions of data points per second to determine an algorithmic bid for a search based on who and if a person will purchase.

Why It Matters in 2025

• Manual Bidding Rate Has No Opportunity to Compete with Speed of Smart Bidding.
• Smart Bidding Rates Update in Real Time based on AI + ML.
• More ROI and conversions achieved with fewer user hours invested.

Key Smart Bidding Strategies

With Google Ads Smart Bidding, there are numerous strategies available to advertisers that utilize AI and auction time variable features to automatically optimize bids.

1. Target CPA (Cost Per Acquisition)

• Target CPA assists advertisers in achieving their projected CPA.
• Target CPA is an optimal strategy to maximize CPA when you are aware of your average CPA.
• Signals utilized in Target CPA: device, geographic location, time of day, and user behavior.

2. Target ROAS (Return on Ad Spend)

• Focus on maximizing revenue versus conversions only.
• Perfect for stores or campaigns that center around value-based promotions.
• Signals used include: expected value of a conversion, when users were located, what device users are on, and the user context.

3. Maximize Conversions / Maximize Profit

• Concentrates on the most conversions possible. Also focuses on the greatest amount of profit.
• Best for campaigns with a very high volume of conversions, and where optional limits are set for campaign goals.
• Signals used include: All Auction-Time Data (Demographics, Device, Time, Location).

Quick Comparison Table

Smart Bidding Exploration 2025

Google Ads Smart Bidding Exploration in 2025 is Google’s advanced AI bidding method. It goes beyond traditional keyword targeting and finds opportunities to target hidden high potential searches.

How It Works

• By utilizing Google Ads and Performance Max’s AI Max bidding technology, advertisers will analyze massive amounts of information from auction signals (thousands upon thousands of auction signals across billions of searches).
• Google Ads Smart Bidding will be able to identify long-tail queries that have a high probability of conversion, but that are frequently ignored by advertisers when creating and managing their AdWords campaigns.
• In addition to having access to previously identified queries, advertisers will also use Google’s real-time data (such as user location) to expand the reach of their campaigns.

Why Advertisers Should Try It

• eCommerce and Local advertisers looking to capitalize on long-tail opportunities should seriously consider it.
• It enables advertisers to identify additional potential targets, without having to spend countless hours creating hundreds of keywords manually.
• Advertisers can also improve their ROI by targeting high-intent but not readily available searches in standard keyword lists.

Quick Tip:

Ask yourself:

• Are there any underutilized search queries within your target geographic area?
• Are there any conversion opportunities that exist beyond the keywords you are currently using?

Proper utilization of Google Ads Smart Bidding Exploration leads to the identification of additional market opportunities, and ultimately grants advertisers a significant advantage in regards to advertising in 2025.

Smart Bidding Requirements

In order for advertisers to receive the best results from Google Ads Smart Bidding, it is vital that they understand the requirements of Google Ads Smart Bidding due to the nature of how Google Ads Smart Bidding operates. Google Ads Smart Bidding is based on machine learning and historical data. Therefore, the Campaign(s) will require sufficient amount(s) of Conversion History for Google Ads Smart Bidding to become efficient.

1. Minimum No of Conversions Needed

• To achieve optimal results, it is recommended that the majority of Campaigns must have a Minimum of 30 to 50 Conversions within the last 30 days
• If you do not meet this minimum requirement of Conversion History, it is likely that Google Ads Smart Bidding will either underperform or provide inconsistent results.

2. Manual vs Smart Bidding

• For new Campaigns, you must always start with Manual Bidding. This will provide you with baseline data for all future Campaigns.
• Once you have obtained sufficient Conversions from your new Campaigns, then you may transition from Manual Bidding to Smart Bidding.

This will provide Google with optimal data in order to automatically optimize your Bids utilizing Google’s Systems.

3. Avoid Low-Volume Accounts

• Low converting or low traffic volume accounts don’t perform well using Smart Bidding.
• These smaller volume campaigns tend to have performance fluctuations with wasted spend.

Setup & Best Practices for Smart Bidding

Setting up Google Ads Smart Bidding properly is the first step to maximising your success with Google Ads. Following a “Best Practice Approach” guarantees that the AI based automation will function at full potential, while working to reduce wasted advertising costs.

1. Enable Accurate Conversion Tracking

• You must enable accurate conversion tracking before actually implementing Google Ads Smart Bidding for all of your goals (sales, leads, signups, etc.)
• By providing Google’s AI with the most relevant data possible, it can optimise bidding decisions with more accuracy.

2. Choose the Right Campaign Structure

• Choose Portfolio-Level Smart Bidding or Campaign-Level Smart Bidding depending on your goals.
• To help with optimal learning, group together campaigns with like-conversion types so your AI has more opportunities to learn.
• It will take approximately 1-2 weeks for your campaigns to finish the learning phase, do not make revisions or revisions to your campaigns until after the completion of the learning phase.

3. Budget & Testing Tips

• When testing Smart Bidding approaches, start slowly; 20% of total budget works well in evaluating performance.
• Once the algorithm has reached stability, begin increasing the budget gradually.

4. Smart Bidding Tips 2025

• Concentrate your attention on high-converting keywords/Geo-targeted campaigns.
• Pair Smart Bidding with proper structured ad copy and ad extensions for the greatest effectiveness.
• Regularly check your performance metrics (Cost per Acquisition [CPA], Return on Ad Spend [ROAS], conversions, and impression share).

Measure Smart Bidding Success

To understand the effectiveness of your Google Ads Smart Bidding campaigns and how they may be positively or negatively impacting your return on investment, tracking performance is vital.

1. Monitor Performance Metrics

• Track key metrics, such as CPA, ROAS, and the overall increase in conversions of Smart Bidding campaigns relative to manual bidding campaigns.
• Look for trends in performance data for at least two to four weeks for adequate stabilization of the algorithm.

2. Use Google Ads Tools

• The primary way to access campaign-level insights is through Google Ads Smart Bidding insight reports.
• You can review alerts and recommendations provided by Google Ads Smart Bidding to identify ads and campaigns that are not meeting performance expectations.
• Use Google Ads Smart Bidding portfolio or campaign-level reports to compare ads/campaigns targeting a specific geographical region to determine overall performance.

3. Adjust Targets & Strategies

• If your CPA is too high, modify your target CPA or target ROAS.
• Allocate your Smart Bidding budget to those ads/campaigns generating the highest results with Smart Bidding.
• Implement gradual experimentation versus regular modifications during the learning phase.

Conclusion

Advertisers who want to take full advantage of Google Ads Smart Bidding in 2025 will have improved conversion rates and an increased ROAS by utilizing Artificial Intelligence (AI) Technologies and Target CPA, Target ROAS, Maximize Conversions, and Smart Bidding EXPLORE. An Advertiser or Business should have their campaigns set up correctly with accurate conversion tracking performed regularly. Advertisers must maintain adequate campaign performance monitoring to achieve predictable success across both Desktop and Mobile devices. Utilizing GEO-targeted campaigns will greatly increase the local relevance of the Advertiser’s or Business’s, message.

AGTC can assist you with the Smart Bidding campaigns that will help you maximise your potential through expert guidance. From strategy planning through to hands-on set-up, monitoring and optimization; simultaneously maximize ROI, convert clicks into leads, and reach new audiences in full by partnering with AGTC.

FAQ

1. What is Google Ads Smart Bidding?

Google Ads Smart Bidding provides an automated auction-based bidding solution that uses machine learning to adjust bids automatically in an intelligent manner to increase conversions. Smart Bidding can identify signal from a user to determine when, where, and how they will be exposed to your ads.

2. What are the basic strategies of Smart Bidding in Google Ads?

The strategies of Smart Bidding in Google Ads are:

• The Target Cost per Acquisition is the goal of getting the cost per conversion at or lower than a desired cost.
• The Target Return on Advertising Spend is a method of maximizing available revenue.
• Maximising Conversions or Profits is a strategy that attempts to increase the total number of conversions or profits that can be generated using data from the auction.

3. How does Smart Bidding Exploration work in 2025?

Google Ads Smart Bidding Exploration will allow advertisers to target search queries with the highest potential for conversion and which are not obvious at the time of creation. It allows advertisers to use artificial intelligence (AI) and understanding of their competitors to take full advantage of both potential customers and long-tail search queries in the local and international marketplace.

4. What is the minimum data requirement for Smart Bidding?

To enable Google Ads Smart Bidding to learn properly, Smart Bidding needs at least 30-50 conversions for the previous 30-day time period. If an account has a low volume of conversions, it may not perform well until enough data has been collected overall extended period of time.

5. What are the best practices for Smart Bidding setup?

Key best practices for Google Ads Smart Bidding are:

• Set up correct conversion tracking.
• Start slowly with partial budgets, during the learning stage of the campaign.
• Over time, continue to monitor Smart Bidding through alerts and suggestions to optimize its performance.

6. When should I use manual vs Smart Bidding in Google Ads?

If the campaign has only just begun or is low volume, it is better to use manual bids to start obtaining initial data before switching to Smart Bidding for campaigns that have sufficient conversions or have large amounts of traffic, or if you are scaling campaigns to obtain maximum return on investment and efficiency across multiple devices and geo-targeted locations.