An advertiser feels that their Smart Bidding strategy is missing potential customers. According to the human-in-the-loop philosophy, what's the likely cause of this performance gap?
Correct Answer
A failure to provide instructions that reflect the business truth.
Why is this the correct answer?
The likely cause is a failure to provide instructions that reflect the business truth. The human-in-the-loop philosophy says Smart Bidding does the auction-by-auction work, while the marketer supplies the context it cannot infer: what a conversion is actually worth, which customers matter more, and what the business is trying to achieve. When a strategy misses potential customers, the usual cause is that those inputs are wrong or incomplete — a Target CPA set from an old margin, every lead counted as equal value, or a conversion action that only records part of the journey. Smart Bidding then optimises faithfully towards the wrong definition of success. The fix is upstream of the algorithm: correct the conversion actions and values, feed in offline outcomes, and set targets that describe real business economics rather than tightening controls inside the campaign.
Why are the other options wrong?
Insufficient manual adjustments at the keyword level.
Manual keyword-level adjustments are exactly what Smart Bidding replaces. Bid adjustments are applied automatically at auction time using signals no manual schedule can match, so adding manual tweaks does not recover missed customers.
A failure in the underlying AI technology.
Human-in-the-loop assumes the AI works as designed and that the human supplies context. Treating a performance gap as an AI failure skips the practical cause, which is almost always the instructions the system was given.
The algorithm prioritizing clicks over conversions by default.
Smart Bidding strategies optimise for conversions or conversion value, not clicks. Only Maximise Clicks targets clicks, and that is a separate strategy the advertiser would have chosen deliberately.
Real-world example
A B2B software firm sets Target CPA at £40 because that is what a form fill used to cost. Sales data shows enterprise demo requests are worth ten times a newsletter signup, but both fire the same conversion action. Once demo requests get their own action and a value, and bidding moves to Target ROAS, the campaign starts winning the expensive enterprise auctions it had been priced out of.
Topics in this question
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