With the introduction of Smart Bidding Exploration, Google Ads is giving advertisers the option to have more flexibility in bidding on possible conversions. It is intended to assist Search, Shopping, and Performance Max campaigns to discover more conversions which can be lost in case Target ROAS criteria set up by the advertiser are too strict.
As described in Google’s official documentation, Smart Bidding Exploration allows advertisers to reduce their effective Target ROAS within the chosen tolerance margin. In this way, Google’s bid mechanism gets the freedom to bid on the promising search queries and traffic possibilities that would not have met the return target initially set up. This feature does not automatically expand campaign targeting or enable additional keywords.
How Smart Bidding Exploration Works
Target ROAS bidding helps advertisers optimize their campaigns towards a desired advertising return. However, setting a strict return target can limit bidding opportunities, even when some of those opportunities could generate additional conversions.
Smart Bidding Exploration addresses this by allowing advertisers to choose a Target ROAS tolerance between 5% and 30%. This tolerance determines how much lower the effective return target can be compared with the original target.
For example, if a campaign has a Target ROAS of 200% and the advertiser selects a tolerance of 10%, the effective target becomes 180%. This gives Google Ads more flexibility to bid on potentially valuable traffic that may not have been competitive under the original target.
Google indicates that advertisers can expect performance to come within approximately 15% of the effective target when measured over one to two conversion cycles. Actual results will depend on campaign performance and available conversion opportunities.
Smart Bidding Exploration Does Not Expand Campaign Reach
A key point here is that Smart Bidding Exploration will not widen the targeting scope of the campaign. It will help the advertisers make the most of the opportunities which they have been eligible to get but failed to do because of the restrictive Target ROAS setup.
For instance, a Search campaign can already be eligible to show up for the long-tail search keywords. But because of the stringent target, its bidding system won’t enter the auction. With Smart Bidding Exploration activated, Google Ads becomes more flexible in how it bids.
Smart Bidding Exploration can be applied to Search, Shopping, and Performance Max campaigns that use Target ROAS bidding and satisfy the campaign requirements according to Google. This tool also has particular conditions regarding some types of campaigns:
- Search campaigns: Compatible with Target ROAS bidding.
- Shopping campaigns: Compatible with Target ROAS bidding.
- Performance Max campaigns: Compatible both with and without the use of Google Merchant Center product feeds. For campaigns without product feeds, exploration is applied only to Search traffic.
- Budget: Campaigns should not be budget limited. When campaigns run out of budget, Google may suspend exploration for a while.
Bid Strategies in Google Ads and Search Ads 360 support exploration for Search campaigns. Shopping and Performance Max campaigns should utilize campaign-level bid strategies. In case of moving those campaigns to the portfolio bid strategy, Google will turn off exploration automatically.
It is also clear that Smart Bidding Exploration is compatible with AI Max for Search and Shopping campaigns.
How It Works with AI Max
Smart Bidding Exploration can be combined with AI Max to improve campaign performance.
For instance, in a Shopping campaign, AI Max can extend the list of search terms for which products could potentially show up by turning on text ads. Then, Smart Bidding Exploration can dynamically adjust bids for those eligible search terms based on the flexible ROAS target.
Combined, these tools will allow Google Ads to have greater flexibility to discover additional conversions while staying within the targeting criteria of the campaign.
What Advertisers Should Consider
Smart Bidding Exploration might help advertisers whose campaigns are under strict Target ROAS targets and who are having problems capturing additional conversions. However, setting a lower ROAS target implies that the advertiser will need to be ready for lower returns on part of the traffic under exploration.
Before turning on the tool, advertisers should consider such factors as the budgets of their campaigns, conversion tracking, ROAS performance, and needs related to the profitability of the business. It is advisable to give sufficient time to examine the results for at least one or two conversion cycles.
For advertisers who have to strictly comply with a return threshold, the selection of tolerance needs to be considered very carefully. The higher tolerance makes bidding more flexible but allows setting an even lower effective ROAS target.
Final Thoughts
Smart Bidding Exploration gives advertisers another way to balance return targets with opportunities for additional conversions. Instead of increasing campaign reach, this feature lets Google Ads bid in a more flexible way on traffic available to the campaign by default.
For those advertisers who run a Target ROAS bidding strategy in Search, Shopping, or Performance Max campaigns, it may be useful to test this feature in case their rigid return goals seem to restrict campaign possibilities. The critical point here is to set a proper tolerance level.
