Google Ads Smart Bidding: The Four Strategies And How To Use Them In 2026

By Corey Frankosky · Last Updated October 23, 2026

Smart bidding got harder this year. Not more complicated to set up, but harder to win with, because of a change in how Google treats the targets you give it. For a long time you could set a target CPA and watch Google come in well under it. That is not what I am seeing anymore. Google now appears to aim at the number you set rather than beat it, which changes how you should pick that number and what you do after. This covers the four smart bidding strategies, why none of them work without clean conversion tracking underneath, how to value your conversions so Google chases the right ones, and the specific progression I use to take a campaign from launch to a stable target.

1What smart bidding actually is

Open your portfolio bid strategies and you will see a list of options. Not all of them are smart bidding. Only four are:

Anything in that list that is bidding for conversions or conversion value is smart bidding. Everything else is not.

What the system is doing is setting a bid in every single auction based on a pile of signals it has about that specific search and that specific person. That is a different thing from what you used to do.

The old way was keyword-level manual bidding. You picked a keyword, decided it was worth $3 or $4 or $5 a click to your business, and set a bid. That actually worked better back then, and the reason is worth understanding: not everybody had conversion tracking. Most advertisers were bidding on their own sense of what a keyword was worth. When everyone is guessing, a good guesser has an edge.

That edge is gone. Now you are telling Google what your valuable conversions are and letting it figure out the bids. Which means the quality of what you tell it is the whole game.

Question to Answer:

Which of those four is running on your highest-spend campaign, and when did you last look at it?

2Listen to the full episode

I go through real account screenshots in this one, including a conversion tracking audit, the target CPA progression, and portfolio bid strategy settings.

Google Ads Smart Bidding: Strategies, Conversion Values, And What Changed In 2026

Every episode is at surfsidepodcast.com.

Question to Answer:

Has your cost per conversion drifted upward toward your target over the last few months?

3The change that made targets harder to beat

This is the part that changed how I bid, and it is worth understanding before you set a single target.

Google used to try to beat your target. I have run accounts over the last year and a half with target CPA set at $100, $125, $150 where actual cost per conversion came in well under those numbers. That was great, and it meant you could keep ratcheting the target down and capturing the improvement.

What I am seeing now is Google aiming at the number instead. Set a target and that is roughly where you land. Put plainly: if you have a $10 target CPA on a campaign that was running at $5, expect it to drift toward $10.

The honest read on that is it means you will probably pay more in every auction, and you are not being handed the best efficiency the system can find. Google Ads has gotten a good deal harder since this shifted.

But there is a real upside, and it changes how you should think about the target field:

Your target is now a constraint, not a wish. You are telling Google it may spend aggressively, but only while it can deliver conversions at your number. Set $50, or $75, or $125, and Google will try to maximize your spend inside that boundary. That is a genuinely useful instrument if you know what your number is.

The practical consequence is that the target you set matters more than it used to. It is no longer a ceiling you hope to come in under. It is approximately where you will land, so set it where you actually want to land.

Question to Answer:

Is your current target set where you want to land, or where you were hoping to stay under?

4You cannot bid smart on bad conversion data

You cannot have a real conversation about smart bidding without talking about conversion tracking, because the bidding is only ever as good as the signals feeding it.

What you are doing is telling Google: here are all of my valuable conversions, here is what each one is worth, now go find more of them. If that information is wrong, Google optimizes toward the wrong thing with total confidence.

For ecommerce this is relatively clean. Optimize for purchases with purchase conversion value. If you are running a Shopify store, that is the main thing. Every sale and the value behind it flows back into Google, which makes smart bidding much easier to run because the feedback loop is tight and honest.

Add to cart and begin checkout are useful signals, but purchases and value are what you optimize for.

For lead generation it is messier, because your conversions are phone calls and forms that vary enormously in quality. A 60-second phone call and a mobile button tap are not the same event, and treating them as equal is how campaigns go sideways.

Which is why the next two sections exist.

Question to Answer:

If Google optimized perfectly toward every conversion action you currently have set as primary, would you be happy with the result?

5Audit your conversion actions first

Before you change a bid strategy, open your conversions page and look at the last conversion recorded column. This takes five minutes and it is the highest-value five minutes in this whole process.

Here is what I found doing exactly this on my own account:

• One purchase action firing correctly. It had recorded a purchase that morning. That is the one worth optimizing toward.
• A near-duplicate that had never fired. A second purchase action that got superseded by the first. Dead weight. Remove it.
• An action that had not fired since February. Clearly not tracking correctly anymore, and sitting in the account looking legitimate.
• Several lead form actions not firing properly. Easy to miss, because a conversion action that exists looks like a conversion action that works.

That is one account, mine, that I pay attention to. Most accounts are worse. Google will also flag actions as misconfigured, and that flag is usually right.

Go through yours and sort every action into three piles: firing and valuable (primary), firing but informational (secondary), and broken or duplicated (fix or remove). Only the first pile should be in the "including in account level goals" bucket that bidding optimizes toward.

One category to watch closely. Mobile click to call sometimes over-reports. I do track it, but I watch it, and if the volume stops matching what the client is actually seeing in their phone logs, I make it secondary and stop optimizing toward it. From search campaigns it generally behaves. It is the one signal I have seen go off the rails.

Question to Answer:

Open your conversions page and sort by last conversion recorded. How many have not fired in months?

6Set values so Google chases the right conversions

Once your actions are clean, give them values. This is the step that separates accounts where smart bidding works from accounts where it technically runs.

The question to ask for each one: what is this actually worth to my business? Not what it feels like. What it is worth given how often it turns into revenue.

Here is how I think about it for my own account:

Those are my numbers. Yours will be different, and that is the point. The exact figures matter less than the ratios between them, because the ratios are what tell Google which conversions to chase.

Set your phone call values well above your button click values and Google prioritizes phone calls. That is the entire mechanism, and it is the whole point of smart bidding.

Values are not permanent. If text message leads start closing well and you can trace clients back to them, raise the value. You are describing your business to Google, and your business changes.

The test I come back to: would you pay for every primary conversion in your account? If a phone call lead is worth $250 to you, great, make it primary and value it. If you would not pay for an action, it does not belong in the bucket that bidding optimizes toward.

Question to Answer:

What percentage of your lead forms close, compared to your phone calls? That ratio is your value ratio.

7Where to start: maximize conversions

For a brand new campaign I go straight into conversion-based bidding. No manual phase.

The sequence is: target the keywords I think will perform, set up conversion tracking properly, build the landing pages, confirm everything is configured the way it needs to be, then set Maximize Conversions and let it run.

I will be honest that part of that is crossing your fingers. Some campaigns you launch work immediately. Others trend at a cost per conversion well above where you want it and take real work to bring down. Nobody knows which one you have until the data arrives.

What matters is funding it properly enough to find out.

Set a budget you are comfortable spending across a month of testing. If you do not want to spend more than $1,500 learning whether this works, that is $50 a day. Whether $50 a day is enough depends entirely on your cost per click:

• CPC of $5 to $10: $50 a day is reasonable. You are buying five to ten clicks a day, which accumulates into something readable.
• CPC of $30: $50 a day is not enough. You are buying under two clicks a day and you will not learn anything in a month.

Work it backwards from your own CPC rather than picking a round number that feels right.

Then actually manage it. Smart bidding is not set and forget. Watch your search terms, confirm the clicks are coming from targeted keywords, and add negatives. The first week or two often will not look great. The following couple of weeks usually do, assuming the targeting is sound.

Use Maximize Conversions, not Maximize Conversion Value, at this stage unless you have already set values. Maximize Conversion Value without values is asking Google to optimize toward a number that does not exist.

Question to Answer:

What is your average CPC, and how many clicks a day does your test budget actually buy?

8Moving to target CPA, and raising your budget when you do

Here is the progression, with real numbers.

You have been running Maximize Conversions at $200 a day. After 30 days you have spent roughly $6,000 and your cost per conversion has settled around $125, with lead volume you are happy with.

Now set a target CPA of $125. Not $100 because you would prefer $100. $125, because that is what the campaign actually does. Google already demonstrated it can hit that number, which is exactly why it is the right target to set.

This is where the August change matters most. Set $100 on a campaign that runs at $125 and you will likely choke delivery rather than improve efficiency. Set the number it proved it can hit.

Then raise your budget. This is the step that feels wrong and is not.

At a $125 target CPA, a $250 daily budget is two conversions a day. I would set it slightly higher than that, around $300, to leave room. The reason raising the budget is safe is that your target CPA is now the control. Google will not spend the extra budget unless it can find conversions at $125.

If you are spending your budget in full and you are limited by budget, you should land somewhere close to two conversions a day and close to that cost per conversion over the month. It does not always work out that cleanly, but as a rule, once a target CPA is in place you can raise the budget fairly aggressively as long as you are genuinely comfortable paying that number per conversion.

If you want efficiency instead of volume, invert it. Keep the budget high and walk the target down. $125 to $120, then $110. Keep going while the conversions hold.

I have done exactly this starting at $40: down to $37, then $33, then $29. At $29 spend and volume started falling off, so I went back to $33. Client is happy, volume is there, budget is spending. That is the shape of the exercise. You walk it down until it breaks, then step back one.

How often to touch it. Do not keep changing targets. Smart bidding needs stability to learn. I review bidding on a roughly bi-weekly basis and ask what cost per conversion looks like and whether there is something to learn. Between reviews I leave it alone.

Question to Answer:

What did your campaign actually average over the last 30 days? That is your target, not the number you want.

9Target ROAS for ecommerce

Target ROAS is the same logic pointed at value instead of count. Google is not trying to get you the most conversions. It is trying to get you the most conversion value, which are different objectives and sometimes opposed.

If you are pulling dynamic purchase values into Google Ads, this is where smart bidding is at its strongest. Spend $3,000, generate $20,000 in conversion value, and now you have a real ROAS figure to work from.

Google comes close to realistic targets. That is the key word. Set 1,500% and you will simply not spend your budget, because Google only spends when it is confident it can hit the target. An unrealistic target does not produce a stretch effort. It produces no delivery.

So find your actual number first. I look at the last 30 days, which is roughly what Google works from too. Check 30 days, 14 days, and 7 days to see whether it is stable or trending.

Then you have two directions, and they are a genuine business decision rather than a technical one:

1. Hold the target, maximize spend. If you are at 600% and happy, keep it at 600% and push budget up to spend as much as possible at that return.
2. Lower the target for volume. If you want more sales and will accept less efficiency, set the budget high and bring the target from 600% down to 500%. You are deliberately buying volume with efficiency.

Going the other way works the same: at 350% and wanting to tighten up, push toward 400% and see how much you still spend.

For a campaign with no history, do not guess a target. Run Maximize Conversion Value for a week with the budget you intend to spend. It will spend, and you will see what conversion value actually looks like. Then set a target from real data.

This matters when a client says they want to spend $1,000 a day. If your target ROAS is set too high, you will not spend anywhere near it, and the problem will look like a delivery issue when it is a target issue.

The same approach works for valued lead generation. If you have been valuing your lead forms and phone calls for two to four weeks, you can switch to target ROAS and set it to whatever the campaign has been returning, say 400% or 425%. Google will then go after the conversions you valued highest. It does not always work. I have had it succeed and I have had it fail. But with values in place it is worth testing.

Question to Answer:

What was your actual ROAS over the last 7, 14, and 30 days? Is it stable enough to target?

10Portfolio bid strategies and max bid limits

Under Tools, then Budgets and bidding, then Bid strategies, you will find portfolio bid strategies. They let you apply one bidding strategy across multiple campaigns.

Name the strategy, select the campaigns from the dropdown, optionally create a shared budget, and set your target. A portfolio target CPA at $75 applies across every campaign you attached.

The feature worth knowing about is the maximum bid limit, which you only get inside a portfolio strategy.

If your average cost per click runs high, say around $25, this stops Google reaching for individual clicks that blow up your economics. My rule of thumb: set the max bid limit to roughly half your target CPA. A $75 target CPA means a max bid around $37.50.

The logic behind the ratio is straightforward. Bid higher than half your target CPA and you need to convert better than one in two clicks for the math to work. You are not buying enough clicks for the campaign to function.

One limitation. Portfolio bid strategies do not work on Performance Max. They are for search and shopping only. Which makes PMax a useful teaching example for smart bidding generally, since it offers nothing but smart bidding strategies, but it means this particular lever is not available there.

So the play is to find the search and shopping campaigns that are working, group them, and set a portfolio target with a sensible bid cap. That matters more now than it did a year ago, given that Google is aiming at targets rather than beating them. A bid cap is one of the few remaining constraints you control directly.

One last thing worth knowing. Smart bidding also explores, meaning it finds new searches and new categories you were not previously reaching. Your target is part of what governs how far it ranges. A looser target gives the system more room to explore into unfamiliar territory, which can find you new business or can find you expensive junk. Watch your search terms after any meaningful target loosening.

Question to Answer:

Do you have a max bid limit set anywhere, or is Google free to bid whatever it likes per click?

11Frequently Asked Questions

The short version. Four strategies count as smart bidding: Maximize Conversions, Target CPA, Maximize Conversion Value, and Target ROAS. Since the 2026 bidding change, Google appears to aim at your target rather than beat it, so set the target where you actually want to land and treat it as a spending constraint rather than a ceiling you hope to undercut. None of it works without clean conversion data, so audit your conversion actions for duplicates and dead actions before touching anything, then value each one by what it is genuinely worth so the ratios tell Google which conversions to chase. Start new campaigns on Maximize Conversions with a budget that buys enough clicks to learn from, judged against your own CPC. After 30 days, set your target CPA to the number the campaign actually achieved, then raise the budget, because the target is now your control. For efficiency, hold the budget and walk the target down until volume breaks, then step back one. For ecommerce, find your real ROAS from the last 30 days and decide whether you are holding the target to maximize spend or lowering it to buy volume. And use portfolio strategies on search and shopping to set a max bid limit at about half your target CPA.

Smart bidding is not an exact science. I have set this up the same way twice and had it work once. But clean conversion data, honest values, and a target set from real performance rather than hope will get you most of the way there.

If you want someone to look at how your account is bidding, reach out. We do Google Ads management and consulting, and most of what we do is this.