Smart Bidding

Smart Bidding is a set of Google Ads bidding strategies that use Google AI to optimise for conversions or conversion value in every auction.

By Berend Vrakking, founder of Product Metrics. Updated 7 October 2026.

Example

A Target ROAS of 400% on a 25% margin
Step	Value
Target ROAS	400%
Ad spend	€500.00
Conversion value Google aims for (€500.00 × 400%)	€2,000.00
Profit on a 25% margin (€2,000.00 × 25%)	€500.00

At a target ROAS of 400%, Google aims for €2,000.00 of conversion value on €500.00 of ad spend. At a 25% margin that is €500.00 of profit, exactly the ad spend: target hit, nothing earned. Illustrative data.

For one product, and for an account

Google decides each bid in the auction. Its strategies are Target CPA, Target ROAS, Maximize conversions and Maximize conversion value, and what each aims for is the conversions or conversion value you give it. It does not know your margin: if every product reports its revenue, a product with a 25% margin and a product with a 50% margin look alike per euro.

Product Metrics stays out of the auction and leaves bids and budgets alone. Its part comes before the auction: each product’s segment, one of six by volume and return, written to a custom label, so you can choose campaign settings per group.

Common mistake

Reading the revenue a strategy reports as profit. Smart Bidding aims at the value you give it, so a strategy can hit its target and still lose money on thin-margin products.

Questions

What is Smart Bidding in Google Ads?

It is Google’s name for the automated bid strategies that set a bid in each individual auction, a feature Google calls auction-time bidding. You choose what it aims for; Google sets each bid.

Which bidding strategies are Smart Bidding?

Google lists four: Target CPA, Target ROAS, Maximize conversions and Maximize conversion value. The first and third aim at conversions, and the second and fourth aim at conversion value.

What is the best bidding strategy for Google Ads?

The one that aims at what matters for your products: a count of conversions or their value. Whichever you pick, it can only aim at the value you report.

Sources

Google Ads Help: About Smart Bidding

Keep reading

Conversion valueThe value Smart Bidding aims at when you choose a value strategy.
Maximize conversion valueOne of the four strategies, and the one that aims at value.
Set a target ROAS from your marginChoose a target from the product’s own break-even.
Product SegmentationSee each product in one of six segments, by volume and return.
Performance Max for ecommerceTarget ROAS in Performance Max, and which products to leave out.
Demand Gen vs Performance MaxHow the two campaign types use Smart Bidding for a shop.