Google Clarifies Smart Bidding Update for Budget-Limited Campaigns

Image credit: Search Engine Journal

Google clarified an upcoming Smart Bidding update, effective August 17, to address advertiser concerns about the predictability and performance of budget-limited campaigns.

The update will change how Target Cost Per Acquisition (CPA) and Target Return On Ad Spend (ROAS) campaigns behave when constrained by budget, optimizing closer to set targets rather than previously observed over-performance.

Previously, budget-limited campaigns sometimes exceeded their specified bidding targets, according to industry experts. The update seeks to make campaign scaling and budget adjustments more predictable for advertisers.

Google emphasized that the update will not automatically increase campaign budgets or alter Target CPA or Target ROAS settings, according to Google Ads Liaison Ginny Marvin.

Advertisers may need to adjust their bidding targets downward before the rollout to maintain current performance levels, Google advised. The company also stated it would provide tools to help identify campaigns that might be affected by the change.

Mike Ryan, an industry expert, suggested the update addresses a previous conservative approach in Smart Bidding, which he said favored exploitation over exploration. This earlier approach often resulted in campaigns over-performing but offered less predictable scaling capabilities.

The company’s clarification aims to ensure that advertisers align their targets with their overall goals, especially for campaigns operating under budget constraints, Marvin said.

Kirk Williams, an industry analyst, noted that the update could lead to more stable performance for advertisers who have struggled with the unpredictable nature of budget-limited Smart Bidding.

Aaron Levy, another expert, highlighted that the change underscores Google’s ongoing efforts to refine its automated bidding strategies for greater advertiser control and understanding.

Barry Schwartz, reporting on the update, indicated that the move suggests Google is responding directly to feedback from the advertising community regarding transparency and control over automated systems.

Google has been working to provide more insights into how its automated systems function, a move that has been generally welcomed by the digital advertising sector.

Source: Search Engine Journal