How to utilise audiences effectively with smart bidding

If you thought that Google’s automated bidding would figure out which audiences are effective and which are not, then applying those insights to their bidding… then you’d be wrong, surprisingly.

Google’s help page states that: “Smart Bidding will use your audiences as signals to bid more efficiently and help you get more conversions and conversion value.”

This statement heavily implies that it will only use audiences as a signal if you feed it your audiences. This may be a revelation to some, and it definitely sparks a question about whether you’re currently managing and utilising your audiences effectively. I imagine most people reading this will have only added audiences that are very closely related to their niche, and have a bid adjustment applied (1 or 2 at most), and then a few remarketing lists.

This is leaving a lot of opportunity on the table as the bidding algorithm is missing an extra piece to the puzzle. So this naturally begs the question…

Should I just add ALL the audiences?

Whilst it is possible to find a list of all the in-market and affinity audiences, and add them at scale on Google Ads Editor, it really depends on the business that you’re running ads for.

For a large account that spends hundreds of thousands a month, has an enormous amount of conversion data, and has products that don’t tend to change a whole lot, then absolutely. Adding as many audiences as possible will give the algorithm all the insights it needs to bid in the most efficient way possible.

However, in most cases. the account will not have that level of data for the Smart Bidding to use. A colleague of mine gave the analogy that “it’s like giving Google hundreds of books to read at once – it doesn’t know where to start and takes a long time”.

One of our Google contacts confirmed this information; with a smaller account it can take the algorithm up to a couple weeks to learn about new audiences that are added. Therefore it would be more effective to start with around 10-15 audiences, gradually adding more every couple of weeks so that the algorithm can focus on the audiences one at a time. This is even more pertinent with new campaigns that run in a limited timeframe, as Smart Bidding wouldn’t be able to process all of the audiences at once and action on meaningful signals.

Plus, it’s best practice to only introduce one variable at a time from both a split testing and a reporting standpoint, as you want to know the effect of the specific variable you’re testing.

Where can you start?

If you already have conversion tracking set up, a great starting point is to go into Audience Manager > Audience Insights in the Google Ads interface. Here, it will tell you the top in-market and affinity audiences that are already currently converting on your site.

You can also go into Google Analytics and navigate to Audiences > Interests. This will give you the two categories mentioned above, but you also get the benefit of a third category called “Other Categories”. This breaks down the affinity audiences further (e.g. instead of the affinity audience “foodies”, the other category will be “Recipes/Cuisines/East Asian”, so it can give you more granular insights. It makes sense to check both as they are not always the same.

You can also import predefined lists from the Google Audience Import Gallery which has some really good starter packs.

With the audiences now added at observation level, the final step to consider is…

What bid adjustment should I add?

We chatted to both Google and Microsoft representatives, and they both gave the same answer: “It doesn’t really matter.”

Ultimately, when it comes to Smart Bidding, if there’s an audience that you really want to prioritise, you can add a bid adjustment and the algorithm will take notice of it, but it will only take that signal as a suggestion.

Once the audiences have been added, Smart Bidding will make its own decision as to what bid adjustment it applies to the audiences (this is why it’s important to only add a couple at a time) and in most cases, will override the bid adjustments you put in place.

If this is an issue for you, you may want to revert to manual bidding if you want that control back.

Key takeaways

The key things to consider when it comes to Smart Bidding are:

1. Audiences aren’t just a reporting tool and provide meaningful signals for Smart Bidding
2. Pick the right strategy for implementing audiences on an account-by-account basis
3. Add bid adjustments, but know that if you do, the algorithm can override this

If you’re a PPC marketer, make sure you have this in your repertoire as audiences can unlock significant improvement on performance. And, if you’re brand-side, it’s definitely worth checking with your team that audiences are being used effectively.

As always, if you have any further questions, feel free to contact our team of experts and we will be happy to help.