# How to Create a Bid Management Strategy Using Machine Learning
In the fast-paced world of digital advertising, manually adjusting bids for every keyword is no longer efficient or effective. Using machine learning for bid management allows you to process millions of signals in real-time—such as location, time of day, and user intent—to ensure your Brisbane business shows up exactly when it matters most.
By transitioning to a machine learning-based strategy (often called "Smart Bidding"), you move away from guessing and towards data-driven precision, freeing up your time to focus on high-level creative strategy and business growth.
Prerequisites: What You'll Need
Before you dive into the technical setup, ensure you have the following ready:- An active Google Ads account: With at least 30 days of historical data.
- Conversion Tracking: This is non-negotiable. Machine learning needs to know what a "win" looks like (e.g., a form fill, a phone call, or a sale).
- Sufficient Data Volume: Ideally, at least 30 conversions in the last 30 days for the algorithm to learn effectively.
- Clear Business Goals: Do you want more leads (CPA) or higher revenue (ROAS)?
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Step 1: Define Your Primary Conversion Goal
Machine learning is only as good as the data you feed it. Start by identifying which actions on your website are most valuable. For most Australian service businesses, this is a "Contact Us" form submission or a clicked phone number.- What you should see: Navigate to Tools and Settings > Measurement > Conversions. Ensure your primary goals are marked as "Primary" action for bidding.
Step 2: Audit Your Conversion Data Integrity
Before turning on automation, check that your tracking is firing correctly. If your conversion tag is double-counting or failing to fire, the machine learning model will optimise for the wrong outcomes.Pro Tip: Use the Google Tag Assistant (browser extension) to verify that your tags are active on your thank-you pages.
Step 3: Choose the Right Smart Bidding Strategy
Google offers several machine learning strategies. Choose the one that aligns with your Brisbane business goals:- Target CPA (Cost Per Acquisition): Best for lead generation where you know how much a lead is worth.
- Target ROAS (Return on Ad Spend): Best for eCommerce (like a Shopify store) where you want to maximise revenue.
- Maximise Conversions: Best for spending your full daily budget to get the highest volume of leads.
Step 4: Set a Realistic Baseline Target
Don't pluck a number out of thin air. Look at your historical data from the last 30 days. If your manual Cost Per Lead was $50, set your initial Target CPA at $55 or $60. Common Mistake: Setting a target that is too restrictive (e.g., asking for a $10 lead when you usually pay $50). This will starve the algorithm of data, and your ads will stop showing.Step 5: Implement the Strategy at the Campaign Level
Navigate to the specific campaign you want to automate. Click on Settings > Bidding > Change bidding strategy. Select your chosen automated strategy from the dropdown menu.- Screenshot Description: You will see a checkbox that says "Set a target cost per action." Check this and enter your baseline figure calculated in Step 4.
Step 6: Enter the "Learning Phase"
Once you click save, your campaign status will change to "Learning." This usually lasts 7 to 14 days. During this time, Google’s machine learning is testing different bid levels and user profiles. Warning: Do NOT make any changes to the campaign during this period. Every time you change a budget or a keyword, the learning clock resets.Step 7: Optimise Your Ad Creative
Machine learning handles the bid, but it doesn't write the ad. To give the algorithm the best chance of success, use Responsive Search Ads (RSAs). Provide at least 10-15 headlines and 4 descriptions. The AI will test combinations to see which drives the most conversions.Step 8: Monitor the "Bid Strategy Report"
After the learning phase, go to the Bidding section to view the Bid Strategy Report. This shows you how well the machine learning is hitting your targets.- What you should see: A graph showing your actual CPA vs. your Target CPA. It’s normal for these to fluctuate daily, but the weekly average should be stable.
Step 9: Use Seasonality Adjustments
If you have a big sale coming up (like an EOFY sale or Black Friday), machine learning might not react fast enough to the sudden spike in conversion rate.Go to Tools > Budgets and Bidding > Adjustments to inform the AI that you expect a higher conversion rate for a specific 2-3 day window. This allows the machine to bid more aggressively during the peak period.
Step 10: Refine and Scale
Once the strategy is stable and meeting your targets for 2-3 weeks, you can start to scale. Increase your budget or tighten your Target CPA by no more than 10-20% at a time. Small, incremental changes keep the machine learning model stable.---
Troubleshooting Common Issues
- Low Impression Share: If your ads aren't showing, your Target CPA might be too low or your budget too small. Try increasing your target by 20% to "loosen" the algorithm.
- High CPA in the first week: This is normal during the learning phase. The machine is "paying for data." Wait at least 14 days before judging the performance.
- Conversion Lag: Remember that some customers click an ad today but don't call you for three days. Ensure you account for "Conversion Delay" when looking at recent data.
Pro Tips for Australian Business Owners
- Location Signals: Australian geography is unique. Ensure you have set up location groups (e.g., "Brisbane + 20km") so the machine learning can identify if users in specific suburbs convert at a higher rate.
- Exclude Junk: Use a robust Negative Keyword list. Even the best machine learning can't distinguish between a "free" seeker and a paying customer if you don't tell it to exclude "free" or "cheap."
Next Steps
Now that you've automated your bidding, the next step is to refine your audience targeting. You might want to explore Observation Audiences to see if specific demographics (like homeowners or small business owners) respond better to your ads.Need a hand getting your Google Ads performance back on track? Our Brisbane-based team can audit your account and implement a custom machine learning strategy for you. Contact Local Marketing Group today.