Smart Bidding is a set of automated bidding strategies in Google Ads that use machine learning to optimize for conversions or conversion value in every auction. It includes: Target CPA, Target ROAS, Maximize Conversions, and Maximize Conversion Value. The algorithm factors in signals like device, location, time, and audience.
With Smart Bidding Target ROAS set to 500%, Google automatically adjusts CPC for each search. For a user with a history of large purchases, it bids EUR 2.40; for an unknown user, just EUR 0.60.