SmartBiddingDoesn'tKnowYourMargins

Google's Smart Bidding is genuinely impressive engineering. It processes thousands of signals per auction. It reacts to intent patterns humans can't see.

But it has a blind spot the size of your P&L.

Smart Bidding optimises for conversion value. That's revenue. It doesn't know:

• Your cost of goods on each SKU
• Your shipping cost per order
• Your return rate by product category
• Your payment processing fees
• Whether a discount was applied at checkout
• Whether the customer will return the item in 14 days

So when it sees two potential conversions - one for a £200 product at 60% margin and one for a £300 product at 15% margin - it bids harder on the £300 one. Because £300 is more than £200.

The algorithm chose the revenue. Your bank account needed the margin.

The fix isn't to abandon Smart Bidding. It's to feed it margin data instead of revenue data. Cart-level margin as the conversion value. Margin-banded custom labels for product segmentation. SKU-level ROAS targets that reflect actual economics, not blended averages.

Smart Bidding is a powerful engine. But an engine without a steering wheel just accelerates in whatever direction it was already pointing. Your margin data is the steering wheel.