Google Ads updates Smart bidding

Google Ads plans to end their Target CPA and Target ROAS smart bidding strategies starting this month and roll their functionality into other bid strategies. For most advertisers, the only change will be a switch to a different bidding strategy with little impact on performance.

However, with changes like this, it is always a good idea to review that your account is well set up for a smooth transition and that you have the monitoring and alerting capabilities in place to find out quickly if any issues arise.

The Changes

Starting in April 2021, some advertisers will no longer be able to create Target ROAS or Target CPA bid strategies. Instead, they will see a new field to add a target CPA when using the ‘Maximize Conversions’ strategy and a new field for target ROAS when using the ‘Maximize Conversion Value’ strategy. If all goes well, this transition will ultimately lead to the Target CPA and Target ROAS strategies becoming fully absorbed in their new counterparts.

What this means for advertisers

Effectively, extraordinarily little is changing in terms of how Google Ads bid management works behind the scenes. It is just that you will have to use a different setting to achieve the same thing as before. In fact, smart bidding for search will simply start to resemble smart bidding for shopping a bit more because advertisers with smart shopping campaigns and a target ROAS are effectively already using a Maximize Conversion Value strategy with a Target ROAS.

Watch out for budget constraints

How bidding strategies work depends on their constraints. Some typical constraints you will encounter when working with automated bidding are the target (Target CPA or Target ROAS) and the budget. But geotargets, keywords, and other targeting options also serve as constraints. Google’s recommendation is to remove as many constraints as possible and give the bid automation a single clear goal that is supported by unambiguous conversion data.

It is important to remember you need targeting constraints to ensure your ads are served to an audience you have already identified as higher value. Yet we are still left to decide what to do about the target CPA or ROAS and the budget when they are both constraints.

In the past, Google recommended that advertisers with the old Target CPA strategy and a constrained budget either remove the budget constraint (by increasing the budget) or switch to the old Maximize Conversions strategy. This obviously will not work when Target CPA and Maximize Conversions are merged and become the same.

After April 2021, this means that advertisers using Maximize Conversions with a t Target CPA setting and who have a constrained budget should either raise the budget or remove the CPA setting.