Understanding Smart Bidding: don’t pay more than you need to.
How to Avoid Inflated CPCs: A Smarter Approach to Google Ads Bidding
Did you know that over 90% of Google Ads accounts rely on Smart Bidding? While this automated bidding strategy can deliver excellent results, it’s not a one-size-fits-all solution. Many agencies set up Smart Bidding without considering the specific context of the client’s business. For Smart Bidding to work effectively, Google’s AI needs to have a comprehensive view of what matters most to your campaign. Without this, it can overvalue certain clicks, driving up costs unnecessarily.
Recently, we took over an account from a large network agency and were able to reduce generic cost-per-clicks (CPCs) by an impressive 72%, bringing them down from £7.11 to £2.12 per click. But how did we manage such a drastic reduction?
The Problem: A Misalignment Between Strategy and Business Needs
The account in question had been set up with Smart Bidding. While that can be an effective approach, the client’s long purchase cycle made it less suitable for their goals. The conversion action tracked in the account was mobile calls, which were only relevant for a small subset of users. Google’s AI focused on optimizing for those few conversions, but that caused the algorithm to inflate CPCs on the belief that those clicks would likely result in conversions. Unfortunately, this led to unnecessarily high costs.
The Solution: Moving Away from Conversion-Based Bidding
To correct this, we restructured the campaigns and pivoted away from a purely conversion-based bidding strategy. Instead, we opted for a non-conversion-based approach that gave Google a more accurate picture of the overall customer journey. This shift allowed us to maintain the same click volume, impression share, and lead generation but at a significantly lower cost per click. In fact, we saved €5 per click—while achieving the same results.
What You Can Learn from This
At Glassbox, we understand that reducing unnecessary spending on Google Ads is crucial for managing your business’s cash flow. When Smart Bidding is used without considering the full customer journey or the context of your business, it can lead to wasted spend. By adjusting your approach and focusing on the right mix of bidding strategies, you can ensure that your budget is being used more effectively, driving down costs without sacrificing performance.
If you’re looking to cut costs while maintaining results in your Google Ads campaigns, we’re here to help. Get in touch with us to see how we can optimize your account and reduce waste in your ad spend.