Smart Bid! The new automated bidding feature for advertisers
Table of contents
- What is Smart Bid and how does Smart Bid work?
- Smart Bid Benefits, Tips and Best Practices
- Smart Bid FAQs
- What initial CPM should I fill in?
- What if my campaign fails to meet my goal?
- Can I target one single zone?
- What is the required budget?
- My campaign needs more traffic. What can I do?
- What is the difference between Bidder and Smart Bid?
- Can I enable Smart Bid on an active Smart CPM campaign?
- How long will it take for my campaign to reach its goal?
- OK so I’m happy with the initial results of my Smart Bid Campaign. What should I do next to ensure I maximize volume?
What is Smart Bid and how does Smart Bid work?
It’s a new campaign pricing model that uses machine learning. It is an automated bidding feature for advertisers that will analyze your campaign data and automatically determine the optimal price in real-time based on the following factors:
- The likelihood of a conversion
- Analysis across several data points
- Using conversion data for specific dimensions: zones, countries, device types, browsers, etc
You can select one of the following two bidding strategies: Target CPA (Cost per Acquisition) or Target ROAS (Return on Advertising Spend). Let’s look at them in more detail.
Bidding strategy 1: Target CPA (Cost per Acquisition)
The Target CPA Smart Bid Strategy finds an optimal bid for your ad based on an average target CPA that you want the campaign to achieve. When the ad request happens, the bid algorithm determines how likely the user is to generate a conversion. If the user is highly likely to convert and based on historical campaign analysis, the bid algorithm will bid high. If the user is less likely to convert it will bid low. Some conversions may cost more than your target and some may cost less, but altogether the algorithm will try to optimize your cost per conversion to match the target CPA that you set over time.
For example, if you choose a target CPA of $10 USD, the Smart Bid algorithm will automatically set your bids to try to get you as many conversions at $10 USD on average. To help improve your performance in every ad auction, the algorithm adjusts your bids using real-time signals like device, location and more.
This strategy bids more for volume to begin with in order to gain data significance. Once data significance is reached, after 30 conversions, Smart Bid kicks in and starts optimizing bid prices to either maximize volume or maximize CPA.
Bidding strategy 2: Target ROAS (Return on Advertising Spend)
The Target ROAS Bid Strategy finds an optimal bid for your ad based on a target percentage of the ROAS that you want the campaign to achieve. The Smart Bid algorithm first calculates the conversion value for either the Fixed or Dynamic Conversion Goal specified. For dynamic value conversions an average value is taken. It then analyzes and intelligently predicts the likelihood of the user to convert. From there, Smart Bid optimizes your bid towards your Target ROAS value. This means that if the bid algorithm determines that a user is likely to generate a conversion with high value, Target ROAS will bid high for that ad request. If the bid algorithm determines that the user isn’t likely to generate a high-value conversion, it will bid low. Note that the Conversion Goal you use must be based on either Fixed or Dynamic values. No Value Conversion Goals are unavailable for this Bid Strategy.
For example, if you’re building campaigns for an online e-commerce store and you want to optimize your bids based on the value of a shopping cart: let’s say your goal is that for every $2 USD worth of sales (this is your conversion value) you want to spend $1 USD on ads. In this case you would set a target ROAS of 200% so that for every $1 USD you spend on ads, you’d like to get back twice that in revenue. Then the Smart Bid algorithm will automatically set your CPM or CPC (click only formats) bids to maximize your conversion value, while trying to reach your target ROAS of 200%.
Please Note: For both of the two bid strategies, it is important not to evaluate your campaign performance too early. Smart Bid needs a learning period in order to gather the performance data, we call this reaching data significance, in order to optimize your bids. The campaign will need to gather a good volume of conversions before it can start optimizing for its targets (CPA or ROAS) accordingly. After 30 conversions are achieved the chosen Smart Bid Strategy becomes effective and at the desired Target CPA or ROAS set.
Smart Bid Benefits, Tips and Best Practices
Guaranteed profitable campaign: That’s right, the goal of Smart Bid is that it will continue working on your campaign to make it profitable, however you have to let the campaign run, don’t stop the campaign if it hasn’t yet reached your goal. In order for Smart Bid to ensure your campaign is profitable, it takes investment and time. So your initial investment will be returned and then become profitable, so think long term, not short term.
Saves you time: After initial campaign set up with Smart Bid you will generally only need small optimizations as the campaign progresses, such as tweaking your Target ROAS or CPA, rather than in depth manual constant campaign optimizations, freeing up valuable time for advertisers.
You can concentrate on better converting creatives: Because Smart Bid makes it possible to automate the campaign’s management and bidding to reach your target objective. Advertisers can spend less time on manual tasks and more time on strategic efforts, while allowing Smart Bid to achieve your marketing goals. Now you can focus on the product and marketing tools such as display creatives, video ads and prelanders to improve the offer’s conversion rate.
You can switch an existing campaign to Smart Bid: If you have an existing campaign you do not need to set up a new campaign for Smart Bid as long as you keep the same conversion goal. Your Smart CPM campaign will already be optimized, so switching it to the Smart Bid model will immediately analyze all the historic data generated from the Smart CPM campaign and will start working for you. If you change the campaign’s goal however, you will have to re-set up the campaign for Smart Bid, because it will need to learn a new set of data to reach your new goal.
Allows manual fine tuning: You can still manually block ad zones and fine tune the campaign by pausing and adjusting the Target CPA
Tips and Best Practices
Initial targeting set up: Use knowledge from previous testing of a campaign to set up your targeting. It is always important to run test campaigns before launching full campaigns. The data generated during the test is a highly valuable asset. So for example, if you run a broad test campaign and you know that the offer does not convert on Samsungs browser, then when you launch the full campaign with Smart Bid, make sure you deselect the targeting of Samsung’s browser, or you will waste some budget on Smart Bid while it tests Samsung’s browser.
Manual optimizations: You can make Smart Bid work faster to achieve your goals if you make a few manual optimizations. Because Smart Bid works with optimized bidding of layers of dimensions and you want to win as much traffic as possible. So this is where you can tweak. For example, the browser dimension, if you know your offer is winning bids on Chrome but for Safari you are paying too high a price for conversions on Safari, it is better to stop targeting Safari. Otherwise Smart Bid will drop the bid price for browsers, which will affect your Chrome bidding also.
Don’t be too conservative with settings: It is tempting to set a lower bid price, but this is not advisable, because you will not win decent volumes while the Smart Bid learns from the data generated, it needs to reach a data significance level to kick in, otherwise it will just run as a Smart CPM campaign. Be prepared to make a loss at the beginning, the Smart Bid will generate a profitable campaign for you, so you will make back this loss. Smart Bid requires a budget and time commitment from you to turn profitable.
ROAS setting: It is also tempting to put a ROAS setting at over 100%, but this may make the goal difficult to reach and it could prevent you from testing more volumes of traffic. Try setting the ROAS below 100% to maximize the chance of reaching data significance quickly, you can go as low as 70% initially. Be prepared to make a loss at the beginning, then, of course, you can adjust the setting if needed to reach your goal, but not during this initial exploration phase. If you set a Target ROAS to 120% it means you are aiming for a good return on your ad spend. In this case, say on $1,000 spend you want to generate $1,200 revenue. Whereas at 70% you are happy actually allowing Smart Bid to bid at loss if necessary to acquire some volume, and set a much lower target of only $700 revenue for a $1,000 ad spend. This allows Smart Bid to bid higher and more aggressively, and this tends to provide better results overall. If you target 120% Smart Bid will bid lower, and this can affect results. By lowering the bids this can lock you out of certain segments of traffic where bids are higher and the traffic quality might be higher.
Stops bidding if no conversions: If you are getting no conversions the algorithm will still bid on the ad zones, but the bid might be too low to receive traffic. So look for possible reasons why your offer is not converting such as: poor performing ad creatives, landing page messaging, the product is not right for your campaign, etc
PPS versus PPL: PPS generally have higher payouts but it is more difficult to get conversions. Smart Bid optimizes based on campaign conversions. So try to use a PPL type goal such as email catching, so that you do not overspend on your bids from having a more difficult goal to achieve conversions from. An easier goal also helps you get a more accurate bid. If you want to stick with a PPS goal such as Credit Card payment, it is not impossible, but it will be more difficult for Smart Bid to make your campaign more profitable. So think about all your KPIs and choose 1 easy to achieve KPI as your goal. If you find that the goal is not reachable, put a lower break even point for the goal.
Invest with a good budget: Success with Smart Bid comes from generating conversions, that is how the machine learning algorithm works, therefore a decent campaign budget is needed along with time to let the campaign run, so that Smart Bid can find the campaigns conversion formula.
See Smart Bid working: Check out our Smart Bid advertiser campaign case study here, to see how one advertiser generated an ROAS of 120% with some careful evaluation over a 3 week period
Smart Bid FAQs
What initial CPM should I fill in?
This will depend primarily on the competitiveness of the campaign’s targeting. An in-stream format will require a much higher CPM than a banner format, just as a campaign targeting the US will require a higher CPM than India. At the launch of a new campaign, the initial CPM is the equivalent of a Smart CPM campaign which will prevent you from overpaying the traffic.
Tip: Ideally, if you have a campaign with similar targeting, you can refer to it to set your initial CPM. Otherwise, we recommend you to start with a competitive CPM from the beginning, as the faster you get data, the sooner Smart Bid will efficiently optimize your campaign.
What if my campaign fails to meet my goal?
If your campaign does not reach its goal, here are different actions you can take to solve the problem:
- Give it time. Smart Bid requires data to efficiently optimize your campaign.
- Your goal is too ambitious; therefore review your Target CPA/ROAS goals.
- Your campaign targets many zones (e.g. native), so it will take longer to achieve significant data to reach the first level of zone-level optimization.
- Your campaign has a bid optimization configured to “Maximize Volume” which is an optimization that is prioritizing volume and the exploration of new traffic segments over the target goal; switch to “Maximize Target CPA/ROAS”. However, it will impact your volume and likely decrease your conversions. Do not choose this option too early!
If you already know your campaign will not perform well on certain targeting segments. For example, if your offer is not compatible with Android Operating System, then adjust the targeting settings of your campaign to block it, so Smart Bid does not spend time in testing those segments.
Can I target one single zone?
Yes, it is possible to target a single zone, however, Smart Bid is most useful when your campaign is targeting multiple zones.
What is the required budget?
There is no minimum budget. However, Smart Bid requires data. So, an effective budget will depend on the value of the Target CPA or the conversion value for a Target ROAS campaign. The higher the value, the higher the budget you will need to achieve meaningful data. The targeting of your campaign will also affect the budget. A campaign targeting one single zone will require less budget than a campaign targeting thousands of zones.
Tip: PPL models are perfect for Smart Bid and limited budget. However, it is possible for advertisers promoting PPS offers with high conversion values to reduce their budget by setting a different goal that is part of the conversion funnel e.g. form submission, email, etc
My campaign needs more traffic. What can I do?
To increase your traffic, you can increase your initial CPM, allowing you to reach the required conversion volume on zones that have yet to reach the minimum required. Or increase your Target CPA or reduce your Target ROAS to increase your traffic on zones already optimized by the algorithm.
Also make sure to use the Maximize Volume Bid Optimization, which will prioritize conversions volume over the target goal and will allow more budget going towards the exploration of new traffic segments.
What is the difference between Bidder and Smart Bid?
These two features are designed to facilitate the management of advertiser campaigns. The Bidder is more of an automation tool, allowing advertisers to apply automatic campaign updates, based on certain metrics. And the “Automatic Bidding Optimization” feature proposed by the Bidder optimizes the campaign bids at the zone. Smart Bid however will optimize the bids of your campaign in real-time, based on the probability of conversion for a large number of data points.
Can I enable Smart Bid on an active Smart CPM campaign?
Yes, and it is even recommended. If your Smart CPM campaign already has conversion data, this will be used from the start by Smart Bid as soon as you switch to this Pricing Model.
How long will it take for my campaign to reach its goal?
The time will vary depending on the volume of conversions data and actual target goal. Typically, it takes around 30 conversions for Smart Bid to be able to start optimizing more efficiently. The higher the volume of conversions, the sooner Smart Bid will reach your goal.
OK so I’m happy with the initial results of my Smart Bid Campaign. What should I do next to ensure I maximize volume?
- Make sure to use “Maximize Volume” Bid Optimization. That should be the most impactful action, as it will bid more aggressively on optimized segments and also test new segments more aggressively.
- Increasing the Initial CPM will ensure you get the most volume on segments being tested. It will also increase the chances of being the top bidder, which can have a positive impact on campaign performance.
- If you can increase the Target CPA/ROAS then you should. Similarly to Initial CPM, it will ensure you get the most volume, in this case on optimized segments. It will also increase the chances of being the top bidder, which can have a positive impact on campaign performance.
- If you hit your Daily Budget on the campaign or you are close to it, increase it. That’s for any campaign, not just Smart Bid.
- Frequency Capping is a very important campaign setting with regards to volume. Especially for high frequency formats such as banners or native. Increasing Frequency Capping should definitely increase volume. However, CTR and CR should be monitored as higher Frequency Capping may result in lower campaign performance. That’s for any campaign, not just Smart Bid.