How automated bidding works in Google Ads (what’s happening behind the scenes)
Automated bidding is simply the platform setting your bids for you based on the outcome you tell it to prioritize. Instead of you manually updating bids at the keyword or ad group level, the system evaluates how likely each ad opportunity is to produce the result you care about (a click, a conversion, or conversion value) and then adjusts the bid automatically to pursue that goal.
The most important mindset shift is this: you’re no longer “setting bids”; you’re “setting a goal and guardrails.” Your primary levers become the bidding strategy, the target (if you use one), the budget, and the quality of the conversion data feeding the strategy.
From keyword-level bids to auction-time bids
Modern automated bidding is built around auction-time bidding. That means the bid can change for every single auction, not just once or twice a day. In practice, two people can type a similar query and trigger very different bids because the context is different (device, location, time, previous site behavior, and many other signals).
This auction-by-auction approach is why automated bidding can outperform static keyword bids in many accounts: it can bid more aggressively when the likelihood of success is high and pull back when it’s low, even if the keyword is the same.
What the system is optimizing for (and what it ignores)
Each automated strategy optimizes toward a specific objective. Click-based strategies focus on volume of traffic within budget. Visibility strategies focus on impression share and placement. Conversion-based strategies (often grouped under “Smart Bidding”) optimize toward conversions or conversion value, using conversion tracking as the success signal.
One practical implication: once you’re on conversion-based Smart Bidding, classic manual bid adjustments generally stop being the right tool because the strategy is already adjusting bids dynamically. In many cases, your existing bid adjustments won’t be used (with limited exceptions like excluding a device by setting a -100% adjustment).
What Smart Bidding needs to perform well (data, learning, and control)
Conversion tracking quality: the “fuel” for automated bidding
Smart Bidding is only as good as the conversion signals it’s trained on. If your tracking is missing conversions, double-counting, firing on low-intent actions, or mixing different-value goals into a single “primary” conversion without a clear plan, the bidding system will optimize exactly as instructed—just not in the way you intended.
Also note that Smart Bidding can learn across all conversion actions included in the main “Conversions” reporting (not just one action), so you want to be deliberate about which actions you include there—especially when you’re trying to control lead quality or profitability.
Signals and query-level learning: why structure matters less than it used to
Smart Bidding evaluates a wide range of contextual signals at auction time (for example: device, physical location, location intent, time/day, remarketing list membership, query text, browser, operating system, and more). It also learns at the search-query level across your account rather than being limited to the “keyword container” the query happened to match.
In practical terms, this is why Smart Bidding can be resilient when you add new keywords or move keywords between ad groups: it doesn’t necessarily have to relearn everything from scratch if the underlying queries already have history elsewhere in the account.
The learning period and conversion delay: how long to wait before judging results
Any time you make meaningful changes—switching bid strategies, changing targets, changing budgets materially, adding/removing large chunks of traffic—the strategy can enter a learning period. The duration is heavily influenced by (1) how many conversions you generate, (2) how long your conversion cycle is (click-to-conversion time), and (3) which bid strategy you’re using.
As a rule of thumb, many strategies may need up to roughly 50 conversion events or about three conversion cycles to calibrate to a new objective. Even after the interface no longer shows “Learning,” the system continues to learn; the status is more of a “major recalibration” indicator than a hard on/off switch.
To stay grounded while the system learns, rely on bid strategy reporting concepts like average target, conversion delay, and “top signals,” and compare performance over timeframes that actually include the bulk of your delayed conversions (especially for longer consideration cycles).
The main automated bid strategies and when to use each
Maximize Conversions (with an optional Target CPA)
Maximize Conversions is designed to get the most conversions possible within your budget. If you don’t set a target, it will generally try to spend your budget to drive conversion volume. If you add an optional Target CPA, it behaves like a Target CPA approach: it aims to maximize conversions while trying to hit that CPA on average (individual conversions can still cost more or less).
This strategy is a strong default when you care about lead or sale volume and you have reliable conversion tracking. The biggest “gotcha” I see is budget shock: if you’ve been under-spending and you switch to Maximize Conversions, spend can rise quickly because the strategy is allowed to pursue more auctions to hit the conversion goal.
One nuance: certain impression-share budgeting columns can be misleading with Maximize Conversions because these strategies are designed to spend the full daily budget by design. Budget simulation-style forecasting tends to be more informative than impression-share loss columns when you’re diagnosing headroom.
Target CPA (tCPA)
Target CPA is the classic “I want more conversions, but I need predictable efficiency” strategy. You set a desired average cost per conversion, and the system bids based on the probability of conversion to try to achieve that CPA over time. It’s available as a single-campaign strategy or as a portfolio strategy that can manage multiple campaigns under one shared CPA target.
Two important operational points. First, be comfortable with pacing: campaigns can spend more on some days and less on others, and you should be comfortable with daily spend variability (including the possibility of spending up to roughly 2x your average daily budget on a given day while still following monthly pacing constraints). Second, avoid hard bid caps; bid limits are generally not recommended because they can prevent the system from bidding what it needs to win the right auctions and hit your CPA goal.
Maximize Conversion Value (with an optional Target ROAS) and Target ROAS (tROAS)
If not all conversions are equal, value-based bidding is where automated bidding becomes truly powerful. Instead of treating every lead or purchase the same, you feed conversion values (revenue, margin proxies, lead scoring, predicted LTV tiers, etc.), and the strategy bids toward higher-value outcomes.
Maximize Conversion Value aims to maximize total conversion value within the budget. If you don’t set a target, it will generally try to spend the budget to drive as much total value as possible. If you set an optional Target ROAS, the system aims to maximize conversion value while trying to achieve that ROAS on average (some auctions will land above target and some below).
Value-based strategies require solid value hygiene. If you recently started sending values (or materially changed how values are calculated), it’s often smart to let the new values stabilize for several weeks (or multiple conversion cycles) before making aggressive ROAS decisions—otherwise you can “train” the system on inconsistent value inputs.
Also pay attention to eligibility constraints in certain campaign types. For example, some environments require minimum recent conversion-with-value volume before value-based bidding is available, specifically to ensure the strategy has enough signal to optimize reliably.
Maximize Clicks
Maximize Clicks is the right tool when your goal is traffic volume within a budget, not conversions. It’s straightforward: it bids to get as many clicks as possible for the money you’re willing to spend.
If you want a safety rail, you can set a maximum CPC bid limit to cap how high the system can bid for a click. Use that cap carefully: too low and you’ll choke volume; too high and you may pay more than you intended for low-quality traffic. Also note that Maximize Clicks does not optimize toward impression share, so it’s not the right choice if top-of-page visibility is the goal.
Target Impression Share
Target Impression Share is built for visibility. You tell the system the impression share you want and where you want to appear: top of page, absolute top, or anywhere on the page. The strategy then sets bids to try to achieve that visibility goal.
This strategy is especially common for brand protection and awareness-focused search campaigns. Two key cautions: impression share calculations apply to the main search network context (not search partners), and max CPC bid limits that are set too low can prevent you from reaching your impression share goal—so use bid caps sparingly and only when you truly need them.
A practical playbook to launch automated bidding safely (and improve it over time)
Pre-launch checklist (the few things that prevent most bidding “mysteries”)
- Confirm your primary conversion definition: make sure the action the system is optimizing for truly represents business success (not just a micro-step).
- Validate conversion tracking accuracy: confirm tags fire once, values are correct (if value-based), and attribution windows align with your buying cycle.
- Set budgets intentionally: understand that conversion-based strategies may try to spend the full daily budget, and daily spend can vary.
- Pick the simplest strategy that matches the goal: volume (Maximize Conversions) vs efficiency (Target CPA) vs profitability/value (Maximize Conversion Value / Target ROAS) vs visibility (Target Impression Share) vs traffic (Maximize Clicks).
The first 2–4 weeks: what to watch (and what not to touch)
In the early phase, the goal is to let the strategy gather consistent signal. Overreacting to a few days of volatility is the fastest way to keep a campaign permanently unstable. When you do make changes, make one meaningful change at a time (budget or target, not five different levers at once) and then allow enough time for conversion delay and learning to play out.
- Watch conversion delay-aware performance: compare periods that include the bulk of delayed conversions, not just “yesterday vs today.”
- Use average target metrics: for CPA/ROAS strategies, evaluate against the average target the system actually optimized toward over the period.
- Change targets gradually: large target swings can trigger fresh recalibration and volatility.
Handling special situations: promotions, tracking outages, and sudden conversion-rate shifts
If you’re running a short, unusual event (like a flash sale, a one-week launch, or a sudden change in on-site conversion rate you can predict), a seasonality adjustment can be the right tool. The key is restraint: it’s intended for rare, short windows where you have strong reason to believe conversion rate will shift meaningfully beyond normal seasonality.
If your conversion tracking breaks or offline conversions fail to upload, data exclusions are the correct “damage control” tool. They’re designed specifically for conversion data issues, not for excluding awkward performance periods like promotions. When using data exclusions, you need to think in click dates (not conversion dates) and account for conversion delay so the excluded window covers the clicks impacted by the missing/incorrect conversion reporting. Data exclusions are typically reflected in Smart Bidding behavior within about a week, and they’re not meant to be used frequently or for long periods.
A quick note on recent platform changes that affect bidding decisions
If you used Enhanced CPC historically, note that Enhanced CPC was deprecated for Search and Display campaigns effective the week of March 24, 2025. Campaigns not migrated prior to deprecation effectively moved to Manual CPC behavior. In today’s environment, most advertisers looking for conversion performance should be focusing on Maximize Conversions (optionally with a Target CPA) or Maximize Conversion Value (optionally with a Target ROAS), depending on whether you care more about volume or value.
Finally, if you’re used to seeing “Target CPA” and “Target ROAS” as standalone choices in Search, remember that Search campaigns commonly treat these as optional targets within Maximize Conversions and Maximize Conversion Value. Functionally, the behavior remains the same—the difference is mainly how the strategies are organized and presented.
Let AI handle
the Google Ads grunt work
Let AI handle
the Google Ads grunt work
Google Ads automated bidding (including Smart Bidding) sets bids at auction time using real-time signals like device, location, time, and audience context, with the goal you choose—clicks, conversions, or conversion value—so the same query can be bid very differently depending on intent and likelihood to convert; in practice, the system is only as good as the “fuel” you feed it (clean primary conversion tracking and accurate values), and it needs enough time and volume to learn, so frequent target or budget changes can keep performance unstable. If you want a simpler way to keep those fundamentals tight while you focus on strategy, Blobr connects to your Google Ads account and uses specialized AI agents to continuously review what’s working and what’s wasting spend, then translate best practices into clear actions—like the Keyword Landing Optimizer to better match keywords to the right landing pages, or the Headlines Enhancer to refresh underperforming RSA assets—without needing to micromanage bids day-to-day.
How automated bidding works in Google Ads (what’s happening behind the scenes)
Automated bidding is simply the platform setting your bids for you based on the outcome you tell it to prioritize. Instead of you manually updating bids at the keyword or ad group level, the system evaluates how likely each ad opportunity is to produce the result you care about (a click, a conversion, or conversion value) and then adjusts the bid automatically to pursue that goal.
The most important mindset shift is this: you’re no longer “setting bids”; you’re “setting a goal and guardrails.” Your primary levers become the bidding strategy, the target (if you use one), the budget, and the quality of the conversion data feeding the strategy.
From keyword-level bids to auction-time bids
Modern automated bidding is built around auction-time bidding. That means the bid can change for every single auction, not just once or twice a day. In practice, two people can type a similar query and trigger very different bids because the context is different (device, location, time, previous site behavior, and many other signals).
This auction-by-auction approach is why automated bidding can outperform static keyword bids in many accounts: it can bid more aggressively when the likelihood of success is high and pull back when it’s low, even if the keyword is the same.
What the system is optimizing for (and what it ignores)
Each automated strategy optimizes toward a specific objective. Click-based strategies focus on volume of traffic within budget. Visibility strategies focus on impression share and placement. Conversion-based strategies (often grouped under “Smart Bidding”) optimize toward conversions or conversion value, using conversion tracking as the success signal.
One practical implication: once you’re on conversion-based Smart Bidding, classic manual bid adjustments generally stop being the right tool because the strategy is already adjusting bids dynamically. In many cases, your existing bid adjustments won’t be used (with limited exceptions like excluding a device by setting a -100% adjustment).
What Smart Bidding needs to perform well (data, learning, and control)
Conversion tracking quality: the “fuel” for automated bidding
Smart Bidding is only as good as the conversion signals it’s trained on. If your tracking is missing conversions, double-counting, firing on low-intent actions, or mixing different-value goals into a single “primary” conversion without a clear plan, the bidding system will optimize exactly as instructed—just not in the way you intended.
Also note that Smart Bidding can learn across all conversion actions included in the main “Conversions” reporting (not just one action), so you want to be deliberate about which actions you include there—especially when you’re trying to control lead quality or profitability.
Signals and query-level learning: why structure matters less than it used to
Smart Bidding evaluates a wide range of contextual signals at auction time (for example: device, physical location, location intent, time/day, remarketing list membership, query text, browser, operating system, and more). It also learns at the search-query level across your account rather than being limited to the “keyword container” the query happened to match.
In practical terms, this is why Smart Bidding can be resilient when you add new keywords or move keywords between ad groups: it doesn’t necessarily have to relearn everything from scratch if the underlying queries already have history elsewhere in the account.
The learning period and conversion delay: how long to wait before judging results
Any time you make meaningful changes—switching bid strategies, changing targets, changing budgets materially, adding/removing large chunks of traffic—the strategy can enter a learning period. The duration is heavily influenced by (1) how many conversions you generate, (2) how long your conversion cycle is (click-to-conversion time), and (3) which bid strategy you’re using.
As a rule of thumb, many strategies may need up to roughly 50 conversion events or about three conversion cycles to calibrate to a new objective. Even after the interface no longer shows “Learning,” the system continues to learn; the status is more of a “major recalibration” indicator than a hard on/off switch.
To stay grounded while the system learns, rely on bid strategy reporting concepts like average target, conversion delay, and “top signals,” and compare performance over timeframes that actually include the bulk of your delayed conversions (especially for longer consideration cycles).
The main automated bid strategies and when to use each
Maximize Conversions (with an optional Target CPA)
Maximize Conversions is designed to get the most conversions possible within your budget. If you don’t set a target, it will generally try to spend your budget to drive conversion volume. If you add an optional Target CPA, it behaves like a Target CPA approach: it aims to maximize conversions while trying to hit that CPA on average (individual conversions can still cost more or less).
This strategy is a strong default when you care about lead or sale volume and you have reliable conversion tracking. The biggest “gotcha” I see is budget shock: if you’ve been under-spending and you switch to Maximize Conversions, spend can rise quickly because the strategy is allowed to pursue more auctions to hit the conversion goal.
One nuance: certain impression-share budgeting columns can be misleading with Maximize Conversions because these strategies are designed to spend the full daily budget by design. Budget simulation-style forecasting tends to be more informative than impression-share loss columns when you’re diagnosing headroom.
Target CPA (tCPA)
Target CPA is the classic “I want more conversions, but I need predictable efficiency” strategy. You set a desired average cost per conversion, and the system bids based on the probability of conversion to try to achieve that CPA over time. It’s available as a single-campaign strategy or as a portfolio strategy that can manage multiple campaigns under one shared CPA target.
Two important operational points. First, be comfortable with pacing: campaigns can spend more on some days and less on others, and you should be comfortable with daily spend variability (including the possibility of spending up to roughly 2x your average daily budget on a given day while still following monthly pacing constraints). Second, avoid hard bid caps; bid limits are generally not recommended because they can prevent the system from bidding what it needs to win the right auctions and hit your CPA goal.
Maximize Conversion Value (with an optional Target ROAS) and Target ROAS (tROAS)
If not all conversions are equal, value-based bidding is where automated bidding becomes truly powerful. Instead of treating every lead or purchase the same, you feed conversion values (revenue, margin proxies, lead scoring, predicted LTV tiers, etc.), and the strategy bids toward higher-value outcomes.
Maximize Conversion Value aims to maximize total conversion value within the budget. If you don’t set a target, it will generally try to spend the budget to drive as much total value as possible. If you set an optional Target ROAS, the system aims to maximize conversion value while trying to achieve that ROAS on average (some auctions will land above target and some below).
Value-based strategies require solid value hygiene. If you recently started sending values (or materially changed how values are calculated), it’s often smart to let the new values stabilize for several weeks (or multiple conversion cycles) before making aggressive ROAS decisions—otherwise you can “train” the system on inconsistent value inputs.
Also pay attention to eligibility constraints in certain campaign types. For example, some environments require minimum recent conversion-with-value volume before value-based bidding is available, specifically to ensure the strategy has enough signal to optimize reliably.
Maximize Clicks
Maximize Clicks is the right tool when your goal is traffic volume within a budget, not conversions. It’s straightforward: it bids to get as many clicks as possible for the money you’re willing to spend.
If you want a safety rail, you can set a maximum CPC bid limit to cap how high the system can bid for a click. Use that cap carefully: too low and you’ll choke volume; too high and you may pay more than you intended for low-quality traffic. Also note that Maximize Clicks does not optimize toward impression share, so it’s not the right choice if top-of-page visibility is the goal.
Target Impression Share
Target Impression Share is built for visibility. You tell the system the impression share you want and where you want to appear: top of page, absolute top, or anywhere on the page. The strategy then sets bids to try to achieve that visibility goal.
This strategy is especially common for brand protection and awareness-focused search campaigns. Two key cautions: impression share calculations apply to the main search network context (not search partners), and max CPC bid limits that are set too low can prevent you from reaching your impression share goal—so use bid caps sparingly and only when you truly need them.
A practical playbook to launch automated bidding safely (and improve it over time)
Pre-launch checklist (the few things that prevent most bidding “mysteries”)
- Confirm your primary conversion definition: make sure the action the system is optimizing for truly represents business success (not just a micro-step).
- Validate conversion tracking accuracy: confirm tags fire once, values are correct (if value-based), and attribution windows align with your buying cycle.
- Set budgets intentionally: understand that conversion-based strategies may try to spend the full daily budget, and daily spend can vary.
- Pick the simplest strategy that matches the goal: volume (Maximize Conversions) vs efficiency (Target CPA) vs profitability/value (Maximize Conversion Value / Target ROAS) vs visibility (Target Impression Share) vs traffic (Maximize Clicks).
The first 2–4 weeks: what to watch (and what not to touch)
In the early phase, the goal is to let the strategy gather consistent signal. Overreacting to a few days of volatility is the fastest way to keep a campaign permanently unstable. When you do make changes, make one meaningful change at a time (budget or target, not five different levers at once) and then allow enough time for conversion delay and learning to play out.
- Watch conversion delay-aware performance: compare periods that include the bulk of delayed conversions, not just “yesterday vs today.”
- Use average target metrics: for CPA/ROAS strategies, evaluate against the average target the system actually optimized toward over the period.
- Change targets gradually: large target swings can trigger fresh recalibration and volatility.
Handling special situations: promotions, tracking outages, and sudden conversion-rate shifts
If you’re running a short, unusual event (like a flash sale, a one-week launch, or a sudden change in on-site conversion rate you can predict), a seasonality adjustment can be the right tool. The key is restraint: it’s intended for rare, short windows where you have strong reason to believe conversion rate will shift meaningfully beyond normal seasonality.
If your conversion tracking breaks or offline conversions fail to upload, data exclusions are the correct “damage control” tool. They’re designed specifically for conversion data issues, not for excluding awkward performance periods like promotions. When using data exclusions, you need to think in click dates (not conversion dates) and account for conversion delay so the excluded window covers the clicks impacted by the missing/incorrect conversion reporting. Data exclusions are typically reflected in Smart Bidding behavior within about a week, and they’re not meant to be used frequently or for long periods.
A quick note on recent platform changes that affect bidding decisions
If you used Enhanced CPC historically, note that Enhanced CPC was deprecated for Search and Display campaigns effective the week of March 24, 2025. Campaigns not migrated prior to deprecation effectively moved to Manual CPC behavior. In today’s environment, most advertisers looking for conversion performance should be focusing on Maximize Conversions (optionally with a Target CPA) or Maximize Conversion Value (optionally with a Target ROAS), depending on whether you care more about volume or value.
Finally, if you’re used to seeing “Target CPA” and “Target ROAS” as standalone choices in Search, remember that Search campaigns commonly treat these as optional targets within Maximize Conversions and Maximize Conversion Value. Functionally, the behavior remains the same—the difference is mainly how the strategies are organized and presented.
