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Predictive Bidding in Google Ads: Using AI and Machine Learning

Ever tried to predict the future?

With predictive bidding in Google Ads, it’s almost like you can.

Learn how you can utilize predictive bidding to improve your campaigns!

Ready to unlock the magic? Let’s take this journey together.

The Evolution of Google Ads Bidding

Google Ads, is the platform that has become synonymous with online advertising.

But did you know that the bidding strategies we use today have undergone a significant evolution?

Let’s take a trip down memory lane and explore the fascinating journey of Google Ads bidding.

From Manual to Automation: The Early Days

In the beginning, there was only manual bidding.

Advertisers would set their bids for each keyword, hoping to strike the right balance between cost and visibility.

It was a bit like throwing darts in the dark, hoping to hit the bullseye.

  • Manual Bidding: This was the OG (original) method. Advertisers had full control over how much they were willing to pay for a click. It was straightforward but required constant monitoring and adjustments.
    Think of it as driving a car with a manual transmission. You had to shift gears (or adjust bids) based on the terrain (or competition).
Image of a manual car gear shift representing manual bidding in Google Ads

But as the digital landscape grew more complex, Google introduced automated bidding.

This was a game-changer. Instead of manually adjusting bids, advertisers could now set specific goals, and Google’s algorithms would optimize bids to achieve them.

  • Automated Bidding: Google’s algorithms took the wheel, optimizing bids in real-time based on various factors like device, location, and time of day.
    It’s like switching to an automatic car. You set the destination (your advertising goal), and the car (Google’s algorithm) chooses the best route to get there.
Image of an automatic car gear shift representing automated bidding in Google Ads

The Rise of Advanced Bid Strategies

With the introduction of automated bidding, Google didn’t stop there.

They rolled out a plethora of bid strategies tailored to different advertising goals.

Whether you wanted to maximize clicks, conversions, or visibility, there was a strategy for you.

  • Bid Strategies: These are predefined sets of instructions that tell Google how to bid for your ads. Each strategy is designed to help achieve a specific goal, from increasing site visits to boosting sales.
    Imagine having a personal chef. Instead of deciding what to cook, you just tell them your dietary goals (like losing weight or building muscle), and they whip up the perfect meal for you.

But here’s the kicker: while automated strategies brought efficiency, they also brought a new set of challenges.

Advertisers had to understand the nuances of each strategy and when to use them.

Plus, with automation came the need to relinquish some control, which not everyone was comfortable with.

Embracing the Future: Predictive Bidding

Fast forward to today, and we’re on the cusp of another revolution: predictive bidding.

With advancements in AI and machine learning, Google Ads is no longer just about setting bids.

✏️Try out our most popular free AI tool for generating negative keywords.

It’s about predicting the future. By analyzing vast amounts of data, Google can now forecast which bids are likely to result in conversions, adjusting in real-time to maximize ROI.

  • Predictive Bidding: This is the next frontier in Google Ads. It’s not just about reacting to the present but anticipating the future and with Google Ads smart bidding, the future looks bright.
    Imagine having a crystal ball that could predict the stock market. That’s what predictive bidding is like for advertisers. It gives them a glimpse into the future, allowing them to make more informed decisions.

What is Predictive Bidding?

Alright, let’s dive deep into the world of predictive bidding.

Ever wished you had a crystal ball to foresee which of your ads would perform the best? 

Well, predictive bidding is kind of like that, but backed by data and some serious tech.

The Magic Behind the Curtain: Algorithms & AI

At its core, predictive bidding is all about using advanced algorithms and AI to forecast the performance of your ads.

Instead of just reacting to how your ads are doing, it’s about anticipating how they will do.

  • Algorithms & AI: These are the brains behind predictive bidding. They analyze vast amounts of data, from user behavior to market trends, to make educated guesses about future ad performance.
    Think of it as having a super-smart assistant who can predict tomorrow’s weather with uncanny accuracy. They look at past patterns, current conditions, and even the flutter of a butterfly’s wings to tell you whether you’ll need an umbrella.

But how does this magic happen? It’s all thanks to smart bid strategies.

These are predefined sets of instructions that tell Google how to bid for your ads, based on your specific goals.

  • Smart Bid Strategy: This is where the rubber meets the road. Depending on your goals, whether it’s maximizing clicks, conversions, or visibility, Google’s smart bidding algorithm will optimize your bids in real-time.
    Imagine setting your GPS to the fastest route, avoiding traffic jams and roadblocks. That’s what smart bidding does for your ads. It finds the most efficient path to your destination, ensuring you get there with the least amount of hassle.

Predictive Bidding in Action

So, how does this all play out in a real-world campaign?

Let’s say you’re launching a new product, and you want to get the word out.

You set up a Google Ads campaign, choose your keywords, and set your budget.

Now, instead of manually adjusting your bids, you let predictive bidding take the wheel.

  • Bidding Process: As your campaign goes live, the smart bidding algorithm starts its magic. It analyzes user behavior, market trends, and even the time of day to adjust your bids in real-time. If it sees that a particular keyword is likely to result in a conversion at 3 pm on a Tuesday, it’ll increase your bid for that keyword at that specific time.
    It’s like having a personal shopper who knows exactly when and where to find the best deals. They keep an eye on sales, discounts, and even the mood of the salesperson to ensure you get the best bang for your buck.

Why AI and Machine Learning Matter

Ever wondered why there’s so much buzz around AI and machine learning in the world of advertising?

Let’s dive into the nitty-gritty and uncover the magic behind these tech wonders and why they’re transforming the way we approach Google Ads.

The Power of Prediction: Machine Learning at Work

Machine learning is like that friend who always seems to know what you’re thinking before you even say it.

It’s all about patterns and predictions.

By analyzing vast amounts of data, machine learning algorithms can spot trends, make predictions, and optimize actions in real-time.

  • Machine Learning: At its essence, it’s a type of AI that allows software to become more accurate in predicting outcomes without being explicitly programmed.
    Imagine a chess prodigy who can predict your every move, not because they’re psychic, but because they’ve played thousands of games and recognize patterns. That’s machine learning for you.
Image of a chess game representing machine learning

But how does this tie into Google Ads?

Well, when you’re dealing with millions of keywords, bids, and campaigns, manual adjustments just won’t cut it. 

That’s where machine learning comes in.

By analyzing past campaign data, user behavior, and market trends, machine learning algorithms can optimize bids based on the likelihood of conversion.

  • Optimizing Bids: With machine learning, it’s not just about setting bids; it’s about setting the right bids. The algorithm can adjust bids in real-time, ensuring you get the most bang for your buck.
    Think of it as having a personal financial advisor who knows when to buy, when to sell, and when to hold, all based on analyzing market trends and past performance.

AI: The Brain Behind the Operation

While machine learning is the prodigy, AI is the mastermind.

It’s the overarching technology that powers Google Ads smart bidding.

AI takes into account a plethora of factors, from device type and location to time of day and user behavior, to make real-time decisions.

  • AI in Action: With AI, it’s not just about reacting; it’s about anticipating. For instance, if AI notices that mobile users are more likely to convert in the evenings, it might adjust your bids to target these users during that time frame, as highlighted in this mobile optimization guide.
    Imagine a world-class detective who can piece together seemingly unrelated clues to solve a mystery. That’s AI for you. It connects the dots, making sense of vast amounts of data to drive results.

Steps to Implement Predictive Bidding

Alright, so you’re sold on the magic of predictive bidding.

But how do you actually get started?

Let’s break it down step by step, ensuring you harness the full power of AI and machine learning for your Google Ads campaigns.

1. Understand Your Goals

Before diving into the world of predictive bidding, it’s crucial to have a clear understanding of what you’re aiming to achieve.

  • Conversion Tracking: This is the heartbeat of any successful campaign. By setting up proper conversion tracking, you can monitor which ads are driving results and which ones need tweaking.
    Think of it as setting up a fitness tracker. You want to know how many steps you’re taking, how many calories you’re burning, and how your heart rate changes during a workout. Similarly, conversion tracking gives you insights into your campaign’s health.

2. Choose the Right Bidding Strategy

With a plethora of automated bidding strategies available, it’s essential to pick the one that aligns with your goals.

  • Maximize Conversions: If your primary goal is to get as many conversions as possible within your ad spend, this strategy is your best bet. It uses advanced machine learning algorithms to set bids in real-time, ensuring you get the most conversions for your budget.
  • Target ROAS (Return on Ad Spend): If you’re looking to achieve a specific return on your ad spend, this strategy is the way to go. It adjusts your bids to maximize conversion value, ensuring you hit your desired ROAS.

3. Feed the Machine with Quality Data

Machine learning thrives on data. The more quality data you feed it, the better it performs.

  • Contextual Signals: These are the little breadcrumbs users leave behind. From device and location to time of day and search history, these signals provide valuable insights into user behavior.
    Imagine a detective piecing together clues from a crime scene. The more clues they have, the clearer the picture becomes. Similarly, contextual signals help the algorithm paint a clearer picture of user intent.

4. Monitor and Adjust

Predictive bidding is powerful, but it’s not a set-it-and-forget-it tool. Regular monitoring and adjustments are key.

  • Bid Adjustments: These allow you to increase or decrease your bids based on specific criteria, like device type or location. For instance, if you notice that mobile users convert better in the evenings, you can set a mobile bid adjustment to target them during that time frame.
  • Optimize the Bid: Regularly review your campaign performance and adjust your bids accordingly. Search Ads 360 can provide valuable insights, helping you optimize your strategy.

5. Continuous Learning and Optimization

The digital landscape is ever-evolving, and so should your bidding strategy.

  • Stay Updated: Regularly check out resources like Google Ads Keyword Research Guide and Landing Page Checklist to ensure you’re following the best practices.
  • Test and Learn: Don’t be afraid to experiment. A/B testing, trying out different keywords, or tweaking your ad copy can provide valuable insights. Remember, every campaign is a learning opportunity.

Challenges and Overcoming Them

Ah, the world of predictive bidding.

It’s like a shiny new toy that every marketer wants to play with.

But, like all toys, it comes with its set of challenges.

Let’s dive deep into the murky waters of these challenges and, more importantly, how to navigate through them.

1. Inconsistent Bid Performance

Ever felt like you’re on a roller coaster with your bid performance? One day you’re on top of the world, and the next, you’re plummeting to the depths of despair.

  • The Challenge: Despite using predictive bidding, you might still see fluctuations in bid performance. This inconsistency can be due to various factors, from market changes to competitor actions.
  • The Solution: Regularly monitor and adjust your bids. Dive deep into Google Ads Competitor Analysis to understand the landscape better and adjust your strategy accordingly. Remember, in the world of Google Ads, knowledge is power.
Image of a roller coaster with ups and downs representing inconsistent bid performance

2. Not Achieving Higher Conversion Rates

You’ve implemented predictive bidding, but the expected higher conversion rates are playing hard to get. It’s like expecting a delicious cake and getting a bland pie instead.

  • The Challenge: Even with advanced algorithms, there’s no guarantee of higher conversions. External factors, like market demand or ad relevance, can play spoilsport.
  • The Solution: Focus on the entire funnel, not just the bidding. Ensure your ad group structures are on point, your ad copy resonates with the audience, and your landing pages are optimized for conversions.

✏️If you’re feeling lost, check out the Top 5 Google Ads Mistakes to ensure you’re not falling into common traps.

Image of a disappointed person for not achieving higher conversion rates

3. Over-Optimization Leading to Narrow Focus

Imagine putting on a pair of glasses that only lets you see a tiny portion of the world. That’s what over-optimization can feel like.

  • The Challenge: While bid optimization is crucial, overdoing it can lead to a very narrow focus, missing out on potential opportunities.
  • The Solution: Ensure your bidding strategy takes into account a broader perspective. Don’t just focus on immediate return on ad spend (ROAS). Consider factors like customer lifetime value or potential market growth.

Sometimes, it’s worth bidding on broader terms, like Bid Brand Traffic, to capture a wider audience.

4. Balancing Performance with Budget

It’s the age-old challenge: wanting champagne results on a beer budget.

  • The Challenge: While predictive bidding can lead to increased performance, it can also lead to increased ad spend, especially if not monitored closely.
  • The Solution: Set clear budget limits and monitor your conversion volume closely. It’s essential to strike a balance between achieving stellar performance and ensuring you’re not burning through your budget faster than a forest fire.

Challenges in predictive bidding are like hurdles in a race.

They might slow you down, but with the right strategies and mindset, you can leap over them and race towards the finish line. 

The Future: AI, Machine Learning, and Google Ads

Imagine a world where your Google Ads campaigns are so intuitive, they seem to read your mind.

Where every search query is met with the perfect ad, and your conversion rate soars to heights you never thought possible.

Sounds like a dream, right? Well, with the rapid advancements in AI and Machine Learning, this dream is fast becoming our reality.

Let’s embark on a journey to the future and see what it holds for us.

1. Hyper-Personalized Search Ads

  • The Vision: In the not-so-distant future, search ads will be so personalized that they’ll feel like they were crafted just for you. Imagine searching for a new pair of running shoes and being shown an ad that not only matches your style but also considers the terrain you usually run on and even the current weather in your location.
  • The Role of AI: Machine Learning algorithms will analyze vast amounts of data, from browsing history to purchase patterns, ensuring that the ads displayed are hyper-relevant to the user. This level of optimization will lead to higher engagement and conversion rates.
  • How to Prepare: Start by diving deep into Google Ads tutorials for beginners. Understand the basics, and then explore advanced features. The more you know now, the better equipped you’ll be for the future.

2. Predictive Keyword Analysis

  • The Vision: Gone will be the days of manually sifting through keywords. In the future, AI will predict which keywords will perform best for your business, even before you launch your campaign. It’s like having a crystal ball for your search query strategy.
  • The Role of AI: By analyzing historical data, current market trends, and even your competitors’ strategies through competitive keyword analysis with Google Ads, AI will offer bidding offers and match type suggestions that align with your business goals.
  • How to Prepare: Familiarize yourself with the current keyword landscape. The more groundwork you lay now, the better you’ll harness the power of predictive keyword analysis in the future.

3. Continuous A/B Testing and Optimization

  • The Vision: Imagine a world where your ads are continuously evolving, adapting, and improving. Every broad match, every ad variation, tested in real-time to ensure maximum performance.
  • The Role of AI: AI won’t just suggest changes; it’ll implement them. By continuously running A/B tests, AI will determine which ad variations resonate most with your audience, leading to smart bidding offers and improved optimization.
  • How to Prepare: Start by understanding the current best practices of A/B testing. Dive into SaaS marketing insights to get a grasp of how businesses are currently optimizing their campaigns. The more you test and learn now, the better you’ll be positioned to leverage AI-driven testing in the future.


The future of Google Ads is knocking, and it’s powered by AI and Machine Learning.

Don’t just watch the revolution; be a part of it.

Harness the prowess of Predictive Bidding today and watch your ROI soar.

Continue your learning with out Google Ads manual vs automated bidding guide.

Ready to take the leap? Take action and get the most out of your campaigns!

Michael Schroder

Michael Schroder

Michael Schroder is a Google Ads and SaaS marketing consultant. He has been managing $200k-$300k monthly ad spend and has worked with 200+ SaaS companies. The thing that makes him unique is his data-led approach and his focus on SaaS businesses.