Smart Bidding Exploration: Unlocking New Growth for UK Brands in the AI-First Era of Google Ads

Smart Bidding Exploration: Unlocking Growth for YOUR Brand in the New AI-First Era of Google Ads

I. Introduction: Navigating the Smart Bidding Exploration AI Frontier in Google Ads

Google Marketing Live 2025 marked a pivotal moment, cementing Artificial Intelligence (AI) as the central pillar of Google’s advertising ecosystem.

This is not merely an incremental update; it represents a fundamental shift in how brands connect with customers.

Previous discussions in this series have already highlighted the transformative impact of AI on Performance Max (PMax) and other critical areas, setting the stage for this latest innovation.

In this rapidly evolving landscape, the imperative for UK brand owners, Chief Marketing Officers (CMOs), and Digital Marketing Managers (DMMs) is clear: how to maximise reach, optimise Return on Investment (ROI), and gain a competitive edge when the very rules of engagement are being rewritten by AI. Traditional keyword strategies, while still foundational, are no longer sufficient to capture the full spectrum of evolving user intent.

Amidst these advancements, Google’s Smart Bidding Exploration (SBE) emerges as a game-changer. It is designed to help advertisers go beyond the obvious, leveraging AI to uncover previously missed, high-potential conversion opportunities. This feature, announced at Google Marketing Live 2025, represents Google’s “biggest update to bidding in over a decade” , signaling its profound impact on future campaign performance.

II. Smart Bidding Exploration: Beyond Traditional Keywords

Smart Bidding Exploration is an advanced Google Ads feature that utilizes Google AI to proactively identify and bid on valuable search queries that traditional, more narrowly focused keyword strategies might overlook. It is designed to expand reach into new, high-potential segments of customer intent, effectively acting as an intelligent scout for untapped conversion opportunities.

Core Functionalities

Smart Bidding Exploration offers two core functionalities that enhance its ability to discover new demand:

• Flexible ROAS Targets: This feature allows advertisers to strategically broaden their reach beyond narrow, high-intent searches to include more exploratory queries. Instead of strictly adhering to a very tight, high-ROAS target that might only capture late-stage, high-intent searches, SBE enables a more exploratory approach. For example, a mortgage lender can now effectively bid on broader queries like “how to buy a home” in addition to specific ones like “mortgage rates,” thereby capturing users earlier in their research journey. This represents a calculated investment in future conversions rather than solely optimising for immediate, high-certainty ones.
• Smarter AI Integration: SBE is built upon Google’s existing powerful AI-powered tools, such as AI Max. This deep integration means it leverages sophisticated machine learning to capture high-performing searches from new and unique categories, ensuring campaigns can tap into previously inaccessible demand. It is specifically designed to help campaigns “capture high-performing searches from new and unique categories”.

This is not merely another bidding option; it represents a fundamental shift from rigid keyword targeting to dynamic, AI-led discovery, designed to find the “fish you’re already eligible to catch” but might have been missing. The concept of “flexible ROAS targets” and the illustrative example of a mortgage lender targeting “how to buy a home” instead of just “mortgage rates” clearly indicates a strategic shift. SBE encourages bidding on queries higher up the marketing funnel, where user intent is more exploratory. While these queries might have a lower immediate conversion rate or ROAS, they represent significant future potential by engaging users earlier in their decision-making process. This is a strategic decision to invest in brand awareness and lead generation at an earlier stage, thereby broadening the total addressable market for the brand. For CMOs, this implies viewing SBE not merely as a performance optimisation tool for existing demand, but as a strategic growth lever for market expansion. It allows brands to influence purchase decisions earlier in the customer journey, potentially reducing over-reliance on highly competitive, expensive bottom-of-funnel keywords. This requires a longer-term view of ROI and a willingness to accept a slightly lower initial ROAS in exchange for broader market penetration and a larger pool of qualified leads over time.

III. The Strategic Imperative: Why Smart Bidding Exploration (SBE) Matters for Your Brand’s Growth

Smart Bidding Exploration offers compelling strategic advantages for brands seeking to maximise their digital advertising efforts in the AI-first era.

Unlocking New Demand

SBE directly addresses the challenge of missed opportunities. By identifying and bidding on high-potential search queries that might have been overlooked, it provides brands with access to new segments of demand, including more general or early-stage customer intent. This means advertisements appear in more moments where potential customers are researching and discovering information, significantly expanding market footprint and customer acquisition channels.

Driving Measurable Results

Early adopters and Google’s internal data highlight the tangible impact of SBE. Reports indicate an “18% increase in unique converting search query categories” and a “19% increase in total conversions”. Even more compelling, some early tests have shown “up to 20% conversion increases… at the same cost” , demonstrating significant potential for enhanced campaign effectiveness and a robust return on investment. These figures underscore SBE’s capacity to drive genuine, incremental growth.

Efficiency and Competitive Edge

Leveraging Google’s AI for auction-time optimisation means brands can achieve superior performance and tap into new demand without requiring a complete overhaul of existing strategies. This automation frees up valuable time for strategic planning, creative development, and deeper customer insights, providing marketing teams with a significant competitive edge. In an increasingly AI-driven advertising landscape, early and effective adoption of such tools is crucial for staying ahead of the curve.

The reported 18% increase in unique converting search query categories alongside a 19-20% increase in total conversions is more than just a simple volume increase. It suggests that SBE is not merely generating more conversions from existing, known sources; it is actively diversifying the sources of those conversions. This diversification makes campaigns more robust and resilient to market shifts or increased competition on a narrow set of keywords. By continuously discovering and capitalizing on new, high-performing query categories, the AI enables a compounding effect on growth over time, as the brand’s presence expands into previously untapped and emerging segments of demand. This implies a significant long-term strategic advantage for brands. Those that adopt SBE early will not only see immediate performance gains but also build a more resilient and adaptable search presence. This continuous discovery of new demand pockets means they are less susceptible to saturation or competitive pressures in established keyword landscapes, effectively future-proofing their search strategy and securing a more sustainable growth trajectory.

Table 1: Key Strategic Benefits of Smart Bidding Exploration for Brand Owners

IV. The AI Engine: How Smart Bidding Exploration Works Under the Hood

The advanced capabilities of Smart Bidding Exploration are powered by sophisticated AI and machine learning, operating at a scale impossible for human intervention.

Auction-Time Bidding

At its core, Smart Bidding, and consequently SBE, operates on “auction-time bidding”. This means that for every single auction, Google’s AI evaluates a multitude of signals in real-time to set the optimal bid, rather than relying on static, pre-set bids. This level of real-time, instantaneous optimisation is fundamentally impossible for human marketers to replicate manually, providing a significant advantage in competitive bidding environments.

Leveraging Vast Data Signals

The unparalleled power of SBE stems from its ability to analyze “billions of combinations of signals” for each individual auction. These contextual factors provide the AI with a comprehensive understanding of user intent and likelihood to convert. Key signals include, but are not limited to:

• Device: Optimising bids based on whether a user is on a mobile, desktop, or tablet device.
• Physical Location & Location Intent: Adjusting bids based on a user’s precise geographical location (down to the city) and also their expressed location intent (e.g., searching for “Paris vacations” even if not physically in Paris).
• Weekday & Time of Day: Bidding up during specific hours or days when users are most likely to convert (e.g., a restaurant bidding higher at 8 PM on a Thursday for weekend reservations).
• Remarketing List: Prioritizing bids for users who have previously interacted with a brand or belong to specific remarketing segments.
• Ad Characteristics: Optimising based on which version of an ad creative is shown and its historical likelihood to drive conversions.
• Interface Language & Browser: Tailoring bids based on a user’s language preferences and the browser they are using, factoring in past conversion likelihood.

The Role of Machine Learning in Predictive Bidding (Smart Bidding Exploration)

These sophisticated machine learning algorithms train on vast scales of data to make highly accurate predictions about how different bid amounts will impact conversions or conversion value. This allows SBE to go beyond simple keyword matching, understanding the nuanced context of user queries and behavior to find valuable, previously undiscovered opportunities.Snippets and detail the sheer volume and complexity of signals (billions of combinations) that Google’s AI processes in real-time for every single auction. This represents a scale of data processing and instantaneous decision-making that is fundamentally beyond human capacity. If competitors are leveraging this level of algorithmic precision, a brand that relies solely on manual or less sophisticated automated bidding strategies will be at a severe disadvantage, consistently losing out on optimal impressions and conversions at the most opportune moments. The fact that “more than 80% of Google advertisers are using automated bidding” further underscores that this is not a niche trend but the prevailing standard. For CMOs, this means that embracing AI-driven bidding is no longer an optional enhancement but a strategic imperative for maintaining competitive parity and achieving superior performance in the Google Ads ecosystem. The focus for marketing teams shifts from trying to out-maneuver the algorithm through manual tweaks to strategically guiding and leveraging it through clear goal setting, robust data feeds, and high-level performance analysis. This frees up human expertise for more creative and strategic tasks that AI cannot replicate.

V. Implementing Smart Bidding Exploration: A Practical Playbook for Success

To leverage Smart Bidding Exploration effectively, campaigns should meet specific criteria to provide the AI with the optimal environment for discovery.

Prerequisites for Activation

To leverage SBE effectively, campaigns should meet specific criteria to provide the AI with the optimal environment for discovery:

• Target ROAS (tROAS) Bidding: SBE is specifically designed to work with Target ROAS bid strategies. This ensures the AI optimises for conversion value while simultaneously exploring new opportunities, aligning with revenue-focused business goals.
• Broad Targeting: It is highly recommended to use SBE with broad targeting approaches such as non-brand broad match keywords, Dynamic Search Ads (DSA), or AI Max for Search. This provides the necessary flexibility for the AI to explore and identify new, high-performing search queries that might not be captured by exact or phrase match. While other match types can be present in the campaign, broad targeting maximises SBE’s potential for discovery.

Budget Considerations: The Importance of Unconstrained Budgets

SBE’s effectiveness is significantly limited if campaigns are constrained by budget. For optimal exploration and to allow the AI to bid competitively on new opportunities, campaigns should have sufficient budget flexibility. If a campaign is budget-limited, an alert will appear, indicating that SBE may not deliver its full potential. This is a critical factor for allowing the AI to truly explore new demand.

Strategic Target Setting: Understanding the Effective ROAS Adjustment

When SBE is enabled, the “effective” ROAS target will be approximately 10% below your initial campaign goal. For example, if an original target was 200%, the new effective target might be 180%. This adjustment is intentional, allowing the system to bid more opportunistically on new traffic segments to capture additional valuable performance. It is crucial not to try and offset this by increasing the ROAS target, as this will counter SBE’s core purpose and limit its ability to drive increased traffic diversity.

Snippets and explicitly state that the “effective” ROAS target will be ~10% lower when SBE is enabled and that campaigns must have “unconstrained budgets.” This is a clear signal that SBE is not a free optimisation; there is a calculated “cost of exploration.” This cost manifests as a willingness to accept a slightly lower ROAS in the short term, coupled with the necessary budget flexibility, to unlock new, potentially higher-value conversion categories in the long term. It is an investment in future growth and market share, rather than a pure efficiency play. For CMOs, this means that SBE needs to be framed within budget discussions not just as an optimisation tool, but as a strategic investment in market expansion and long-term customer acquisition. This requires internal alignment on performance expectations and a shift in mindset from solely optimising for immediate ROAS to balancing efficiency with significant growth potential. It is about understanding the long-term compounding value of new customer acquisition through broader reach.

The Power of Experimentation: Using Campaign Experiments to Isolate Impact

Google strongly recommends running a campaign experiment to isolate the results of SBE from other factors like seasonality, market changes, or other concurrent campaign adjustments.

Experiment Best Practices:

• Duration: Test for at least 6+ weeks, noting that it might take 1-2 additional weeks for SBE to fully ramp up and identify new traffic sources. This longer duration is crucial for the AI to learn and for conversion delays to resolve.
• Ramp-up Time: Before enabling SBE in the trial arm, wait 2-3 conversion cycles or 7 days (whichever comes first) to ensure comparable spend and performance between control and trial arms. This initial period should be excluded from performance evaluation to gain a clear picture of SBE’s impact.
• Variable Control: SBE should be the only variable different between the base and trial arms. Testing other variables simultaneously will muddy the results and make it impossible to attribute performance changes accurately.
• Avoid New Campaigns: It is not recommended to test SBE in brand new campaigns; instead, use a well-established campaign with existing conversion history for optimal performance and reliable data.
• Monitoring: Focus on key metrics and, critically, compare “Traffic Diversity” metrics within the Bid Strategy reports for both control and trial arms. The Search Terms Insights report can also provide a breakdown of new search categories discovered by SBE.

Avoiding Common Pitfalls of Smart Bidding Exploration

To ensure optimal performance and avoid hindering SBE’s potential, be mindful of these common traps:

• CPC Bid Limits: Avoid using CPC bid limits, as they restrict the AI’s ability to explore and bid competitively on different, potentially valuable search terms that might fall outside historical CPC comfort zones.
• Frequent Campaign Changes: As with Smart Bidding generally, making significant changes to campaign settings, targeting, or creatives during the exploration phase can disrupt the AI’s optimisation process and lead to performance fluctuations. The system requires time to adjust (2-3 conversion cycles) before re-assessing performance.
• Inadequate Conversion Tracking: Robust and accurate conversion tracking is paramount. Without it, the AI cannot effectively learn and optimise for what truly matters to a business, leading to suboptimal bidding decisions. All valuable actions should be tracked and assigned appropriate conversion values.

The strong recommendations for broad targeting , the necessity of unconstrained budgets , and the extensive experimentation periods (6+ weeks) combined with the acknowledged “limited control” over manual bidding collectively suggest a significant transformation in the PPC manager’s role. Instead of granular keyword management and daily bid adjustments, their focus shifts to strategic campaign setup, intelligent budget allocation, ensuring conversion tracking integrity, designing robust experiments, and high-level performance analysis (e.g., traffic diversity). They become more of a “pilot” of the AI system, guiding its overall direction, rather than a “driver” of individual keywords. Brand owners and CMOs should recognize that their internal PPC teams or agency partners will need to evolve their skill sets. The value proposition of a PPC specialist shifts from tactical, manual execution to strategic oversight, sophisticated data interpretation, and creative development. This aligns with the broader AI-driven trends highlighted at GML 2025 , where AI handles the repetitive tasks, freeing up human talent for more impactful, human-centric strategic initiatives.

Table 2: Smart Bidding Exploration Implementation Best Practices

VI. Navigating the Nuances: Addressing Control and Performance Expectations

Adopting advanced AI-driven bidding strategies like Smart Bidding Exploration requires a clear understanding of how control is redefined and what to expect regarding performance.

Understanding AI’s Role: Balancing Automation with Strategic Oversight

One of the primary concerns with advanced automated bidding strategies like SBE is the perceived “limited control” marketing agencies and brand owners might have over the bidding process. Decisions are largely made by algorithms, which can feel like a constraint for those accustomed to granular manual control. However, this is not a loss of control, but a redefinition. Control shifts from micro-management of individual bids to macro-management of strategy: setting clear conversion goals, ensuring robust and accurate conversion tracking, allocating appropriate budgets, and interpreting the high-level performance data generated by the AI.

The initial blog post series title, “PMax Channel Reporting: Google Lifts the Veil on the Black Box,” directly implies a general concern about the opacity of Google’s automated systems. explicitly mentions “limited control” as a potential drawback of Smart Bidding. While SBE is indeed AI-driven, Google provides mechanisms like the “Traffic Diversity” view in the Bid Strategy report and the “Search Terms Insights report” which allow advertisers to observe what the AI is exploring and where new conversions are originating. This is not full manual control, but it offers strategic visibility into the AI’s discoveries. For brand owners and CMOs, the narrative around AI-driven tools should shift from a fear of “loss of control” to an understanding of “strategic oversight and data transparency.” While the how of bidding might be automated and complex, the what (new query categories, new conversion sources) and why (strategic growth, market expansion) remain visible and measurable. This transparency is crucial for building trust in AI-powered solutions and for allowing executives to make informed strategic adjustments based on the AI’s findings, fostering a more collaborative relationship with the technology.

The “Ramp-up” Period: What to Expect During Initial Adoption and How to Monitor

Unlike traditional Smart Bidding strategies that may have a distinct “learning period” , Google explicitly states that Smart Bidding Exploration has “no learning period. This is a crucial distinction. However, it acknowledges a “ramp-up period” of 1-2 weeks where the bidding systems learn which new traffic sources are valuable. This ramp-up is primarily due to conversion delays and the time it takes for the system to identify and capitalize on previously untapped opportunities. During this initial phase, it is important to monitor performance closely but avoid making drastic, reactive changes.

Common Pitfalls to Avoid with Smart Bidding Exploration

To ensure optimal performance and avoid hindering SBE’s potential, be mindful of these common traps:

• Ignoring Budget Constraints: As previously noted, SBE is significantly less effective if campaigns are budget-limited. Ensure budgets are sufficient and unconstrained to allow the AI to properly explore.
• Imposing Bid Limits: CPC bid limits can severely restrict the AI’s ability to explore and bid competitively on new, valuable search terms that might require higher bids to acquire.
• Frequent Changes: Making significant changes to campaign settings, targeting, or creatives during the exploration phase can disrupt the AI’s optimisation process and lead to performance fluctuations. The system requires adequate time to adjust (approximately 2-3 conversion cycles) before re-assessing performance.
• Inadequate Conversion Tracking: Without accurate and comprehensive conversion tracking, the AI cannot effectively learn and optimise for what truly matters to a business, leading to suboptimal bidding decisions. All valuable actions should be tracked and assigned appropriate conversion values to guide the AI towards profitable outcomes.

Table 3: Smart Bidding Exploration: Key Considerations & Mitigation Strategies

VII. Beyond SBE: The Future of Search Advertising with Google AI

Smart Bidding Exploration is not an isolated feature but a crucial component of Google’s overarching AI-first strategy for advertising, as heavily emphasized at Google Marketing Live 2025. It operates synergistically with other AI advancements that are reshaping the entire digital marketing landscape.

SBE as a Piece of the Larger AI Puzzle

The interconnectedness of Google’s AI ecosystem is a critical factor. SBE’s effectiveness, while powerful on its own, is significantly amplified when considered within this broader context. For example, if SBE helps discover new, high-potential queries, AI-generated creatives can quickly produce highly relevant and engaging ads for those queries, and AI Overviews might present those ads in novel ways. This implies that a brand’s success in the future will not come from optimising individual features in isolation, but from developing a holistic marketing strategy that leverages the synergy between these AI components.

Other key AI advancements include:

• AI Overviews and AI Mode: These are fundamentally redefining search results, providing AI-generated summaries and product suggestions directly within the search experience, with ads now appearing within AI Overviews.
• AI-generated Creatives: New tools like Imagen and Veo are integrated directly into Google Ads and Google Merchant Center, enabling rapid creation of high-quality images and videos, drastically reducing creative production time from weeks to minutes.
• AI Assistants in Ads & Analytics: Gemini-powered AI agents are streamlining complex tasks in Google Ads and Google Analytics, making reporting, analysis, and optimisation faster and more intuitive for marketers.

The Shift from Keyword Management to Strategic AI Partnership

The cumulative effect of these interconnected updates is a fundamental shift in the role of the advertiser. It moves beyond meticulous keyword management and manual bid adjustments towards a strategic partnership with Google’s AI. The focus becomes guiding the AI with clear business goals, providing high-quality data, and interpreting the data it generates to drive broader business outcomes. This is about leveraging AI to move faster and with more confidence.

Preparing Your Brand for the Next Era of Digital Marketing

This new era demands adaptability and a willingness to embrace change. Brands that embrace AI early across their marketing functions will benefit from lower acquisition costs, better conversion rates, and stronger customer engagement. This means a willingness to test often, refine strategies, and prioritise “Generative Engine Optimisation (GEO)” – the practice of optimising content so it can be effectively pulled into AI summaries and recommendations within the evolving search landscape. For CMOs, this means moving beyond siloed thinking about PPC, content, and creative. The future demands an integrated, AI-first marketing strategy where content is optimised for AI consumption (GEO), creatives are AI-assisted, and bidding leverages exploration, all working in concert. This requires greater cross-functional collaboration within marketing teams and a unified digital strategy that embraces AI as a central, enabling force across all touchpoints, rather than just a tool for a single channel.

VIII. Conclusion: Seizing the Smart Bidding Exploration Opportunity

Smart Bidding Exploration represents a significant leap forward in Google Ads, offering UK brands an unparalleled opportunity to uncover new conversion opportunities, drive measurable growth (evidenced by 18-20% conversion increases), and enhance campaign efficiency through advanced AI. It empowers brands to tap into previously inaccessible demand, ensuring they remain competitive in an increasingly AI-driven market.

For busy UK brand owners, CMOs, and DMMs, the message is clear: the future of search advertising is AI-driven, and Smart Bidding Exploration is a cornerstone of this evolution. Embracing this feature is not just about adopting a new tool; it is about making a strategic investment in a brand’s future growth, staying competitive, and fundamentally redefining how demand is captured in an increasingly intelligent digital landscape. Starting with a well-planned experiment, monitoring strategically, and preparing to unlock new levels of performance and market penetration is crucial for success.