Smart Bidding Strategies for E-commerce: When to Trust the Algorithm vs. Taking Manual Control

Smart Bidding Strategies for E-commerce: When to Trust the Algorithm vs. Taking Manual Control

If you’re running an online business, you’ve likely dealt with this dilemma: Should you trust Google’s “smart” algorithms or maintain hands-on control of your Google ad spend? The reality is that both approaches have their place, and the secret lies in knowing exactly when to use each one.

What Is Smart Bidding and Why Should E-commerce Businesses Care?

Smart bidding is Google’s machine learning system that automatically adjusts your bids in real time, analysing over 70 million signals including user behaviour, device types, location, time of day and browsing history to determine the optimal bid for each auction.

Think of it as having a data analyst who never sleeps, constantly monitoring and adjusting your campaigns. However, there’s a crucial caution that trips up many business owners: smart bidding requires a “learning phase” of 2-4 weeks to gather sufficient data and optimise effectively.

The Three Smart Bidding Strategies That Deliver Results for E-commerce

1. Target CPA (Cost Per Acquisition) – The Profit Protector

Best for: Businesses with consistent profit margins that know their exact customer acquisition costs.

How it works: You set the average amount you’re willing to pay for each conversion, and Google optimises bids to achieve this target whilst maximising conversions.

When to use:

• Established businesses with 6+ months of conversion data
• Consistent product pricing and margins
• Clear understanding of customer lifetime value

2. Target ROAS (Return on Ad Spend) – The Revenue Maximiser

Best for: Businesses with varying product values, seasonal fluctuations or multiple product categories.

How it works: You set your desired return on ad spend percentage, and Google optimises to achieve this ratio across your campaigns.

When to use:

• Businesses with diverse product ranges
• Seasonal or promotional businesses
• Companies focused on revenue growth over volume

3. Maximise Conversions – The Growth Accelerator

Best for: New businesses, product launches or companies prioritising growth over immediate profitability.

How it works: Google uses your entire daily budget to drive the maximum number of conversions possible, regardless of cost.

When to use:

• Limited historical conversion data (under 30 conversions/month)
• New market expansion
• Product launches with longer term profitability goals

When to Trust Smart Bidding Strategies

Let Google’s algorithms handle your bids when you have:

Solid conversion tracking setup

• Primary conversions (purchases, leads)
• Enhanced conversions
• Offline conversion tracking (phone orders)

Sufficient data volume

• Target CPA: 30+ conversions/month
• Target ROAS: 50+ conversions/month
• Maximise Conversions: 15+ conversions/month

Stable business conditions

• No major promotions launching
• Consistent pricing and website
• Market conditions are stable

Patience for the learning phase: Don’t interfere for 2-4 weeks after launch, as every change resets the learning period.

When to Take Manual Control

Step in and override smart bidding when:

External disruptions occur

• Economic uncertainty
• Supply chain issues
• Major competitor changes

Time sensitive campaigns launch

• Black Friday sales
• Bank holiday promotions
• Flash sales requiring immediate adjustments

Performance deteriorates significantly

• CPA increases 30%+ for 2+ weeks post-learning
• ROAS drops without explanation
• Conversion rates decline consistently

Expanding to new markets

• New geographic regions
• Different customer demographics
• Unfamiliar product categories

Common Pitfalls to Avoid

The “Set and Forget” Trap

Smart bidding still needs regular monitoring and strategic adjustments.

The “Panic Adjustment” Mistake

Focus on weekly trends, not daily fluctuations; variations are normal.

The “Unrealistic Targets” Problem

Base CPA/ROAS targets on actual business data, not wishful thinking.

Key Metrics That Matter

Track these instead of vanity numbers:

• Cost per acquisition relative to customer lifetime value
• Return on ad spend, including all costs (VAT, delivery, fees)
• Conversion rate trends by device and region
• Search impression share to spot missed opportunities

The Bottom Line

Smart bidding for e-commerce isn’t about choosing between human control and automation; it’s about using both strategically. Success requires proper setup, realistic expectations, and knowing when to let algorithms learn versus when to intervene.

Start with solid conversion tracking, respect the learning phase, but stay alert for when manual control becomes necessary.

Ready to optimise your Google Ads with smart bidding strategies? Contact our PPC specialists at Link Digital for a free audit of your current campaigns, or explore our PPC services to see how we help e-commerce businesses achieve profitable growth.