What is Smart Bidding?
According to Google Ads Help, Smart Bidding uses Google AI to adjust bids in every auction in order to achieve as many conversions or as much conversion value as possible. You set the goal and budget. The system calculates the bid for the individual search.
To do this, Google evaluates signals at auction time. These include device, location, day of the week and time, lists from your own data, ad characteristics, language, browser and the actual search query. In Shopping campaigns, product attributes are added. A strategy can apply to a single campaign or, as a portfolio bid strategy, to several campaigns.
Pros and cons of Smart Bidding
| Pros | Cons |
|---|---|
| The bid takes into account many signals in each auction that you could not manage individually by hand | The result is only as good as the conversions and values reported |
| You steer via the target and budget, so there is no need to manage individual bids | You cannot see why an individual bid came out as it did |
| According to Google, broad match keywords also work well with it | With few conversions or long buying decisions, the system reacts more slowly |
The four strategies at a glance
| Strategy | What it optimises for | What you set | How it treats the budget |
|---|---|---|---|
| Maximise conversions | As many conversions as possible | Budget | Tries to spend the full average daily budget |
| Target CPA | As many conversions as possible at the desired average price | Average cost per conversion | Follows the target, with the budget as the limit |
| Maximise conversion value | The highest possible conversion value | Budget | Tries to spend the full average daily budget |
| Target ROAS | The highest possible conversion value at the desired return | Conversion value per unit of ad spend, as a percentage | Follows the target, with the budget as the limit |
Target CPA
With Target CPA, you set what a conversion should cost on average. Google adjusts bids according to how likely an ad is to lead to a conversion. Individual conversions can cost more or less than the target.
The strategy also works without conversion history. If data is available, Google derives the recommended Target CPA from the average of the last 30 days. It is a good fit if all conversions are worth roughly the same to you, for example enquiries. The metric itself is explained in our article on CPA.
Target ROAS
With Target ROAS, you set the conversion value you want to achieve per unit of ad spend. Google estimates the value of possible conversions for each search and adjusts the bid accordingly. The calculation is conversion value divided by ad spend, multiplied by 100 per cent. In Google’s example, €5 in revenue from €1 of ad spend gives a Target ROAS of 500%.
The strategy needs reported conversion values. It is a good fit if conversions differ in value, as with baskets in an online shop. The minimum values depend on the campaign type. For Search and Shopping campaigns, Google specifies 15 conversions in 30 days, and for Demand Gen 50 conversions in 35 days per campaign, 10 of them in the last 7 days, or 100 conversions in 35 days across all Demand Gen campaigns in the account. The metric itself is explained in our article on ROAS.
Calculating targets: a worked example
These illustrative figures show how to derive limits from your margin. A basket brings €80 in revenue and, after all costs except advertising, a €20 contribution margin.
| Metric | Calculation | Result |
|---|---|---|
| Highest CPA without a loss | Contribution margin per purchase | €20 |
| Lowest ROAS without a loss | €80 / €20 × 100% | 400% |
These figures mark the limits. As a starting point, Google suggests a target based on your performance so far. If your actual ROAS is below the limit, a higher target alone will not fix this. Google points out that too high a target can reduce traffic.
Maximise conversions
This strategy gets as many conversions as possible from the available budget. There is no target price. It tries to spend the full average daily budget. Google points out that spend can rise considerably if you currently use only part of the budget. If you have a fixed target per conversion, Google recommends Target CPA.
Maximise conversion value
This strategy gets the highest possible conversion value from the available budget. You define the value it maximises, such as revenue or profit margin, in conversion tracking. Here too, spend can rise sharply if you currently use only part of the budget. The help page for the strategy lists Search, Shopping and Demand Gen as campaign types. According to Google, Performance Max can also optimise for conversion value.
What the strategies are called today
Google adjusted the names from June 2026. “Maximise conversions with Target CPA” becomes “Target CPA”, and “Maximise conversion value with Target ROAS” becomes “Target ROAS”. During the transition, both names can appear side by side. According to Google, the bidding behaviour stays the same and you do not need to do anything in your account.
A separate change does affect behaviour. Since August 2026, Target CPA and Target ROAS have optimised closer to the set target in budget-limited campaigns. These campaigns could previously beat their target. Google does not adjust targets or budgets automatically. Campaigns without a budget limit are not affected. The change also applies to Target CPC in Demand Gen campaigns. Google rolled it out from 17 to 27 August 2026.
What to check after the change
- Filter for campaigns with the status “Limited by budget” that have been beating their target so far.
- If you want to keep the previous performance, align the target with the actual average. Alternatively, switch to Maximise conversions or Maximise conversion value.
- Wait 1 to 2 conversion cycles before evaluating performance.
- According to Google, do not set data exclusions or new bid limits because of this change.
Daily and monthly budgets still apply. Campaigns with fewer than 7 conversions do not receive a recommended target and should be checked by hand.
Learning, evaluation and interventions
The “Learning” status indicates recent structural changes and, according to Google, lasts no longer than 7 days. Ads continue to run as normal during this time.
| Triggers the status | Does not trigger it |
|---|---|
| New or reactivated bid strategy | Budget changes |
| Adding or removing campaigns, ad groups or keywords | Changes to ROI targets |
| Major change to conversion goals or actions | Changes to location, audience, language or creatives |
According to Google, evaluate results over 2 conversion cycles or 2 weeks, whichever is longer. A conversion cycle is the time between click and conversion. The most recent period does not yet count in full, because conversions arrive with a delay. There are two tools for special cases:
- Seasonality adjustments announce an expected major change in the conversion rate, for example during a sale. Google describes them as suitable for 1 to 7 days and warns against periods of more than 14 days.
- Data exclusions remove faulty conversion data from learning, for example after a tracking outage. According to Google, exclude at least 90% of the affected clicks and do not use the tool regularly.
You can check a change of strategy in advance with “Save as experiment”.
Common Smart Bidding mistakes
- Several target changes in one cycle: the system cannot settle in between.
- Evaluating after a few days: Google designs the strategies to hold the target on average over a week or longer.
- Changing primary conversions: Google advises a consistent goal.
- Additional bid limits: according to Google, these can restrict optimisation.
- Too many small campaigns: Google recommends a consolidated structure and sufficient daily budgets.
- Incorrect values in tracking: an incorrectly reported basket value steers bids in the wrong direction.
Requirements for Smart Bidding
- Conversion tracking: It must be set up before you use any of these strategies. More on this in our article on conversion tracking.
- Conversion values: Target ROAS and Maximise conversion value need a value per conversion. According to Google, you should observe new or changed values for 1 to 2 conversion cycles before using the strategy.
- Data volume: Maximise conversions and Target CPA can also be activated without prior data. For Target ROAS, the minimum values above apply. For a reliable evaluation, Google specifies around one month with at least 30 conversions, or 50 for Target ROAS.
- Consent: Missing consent affects measurement. Our article on Consent Mode v2 gives the background.
Which bid strategy suits which goal
- All conversions are worth about the same, no fixed target price: Maximise conversions.
- All conversions are worth about the same, fixed target price: Target CPA.
- Conversions differ in value, no fixed return target: Maximise conversion value.
- Conversions differ in value, fixed return target: Target ROAS.
Google also offers strategies for other goals. For clicks, these are Maximise clicks, Target CPC and manual CPC bidding. For visibility, there are Target impression share and CPM bidding, and for video ads there is CPV bidding. What this means for your budget is explained in our article on Google Ads costs.
