Google Ads' Smart Bidding promises automated efficiency—but when fed the wrong data, it can quietly drain your budget chasing low-quality leads.
“Half my marketing budget is wasted. I just don’t know which half.”
- John Wannamaker (1838-1922)
For a long time, that quote summed up the frustration of traditional advertising. Then Google Ads came along and changed the game. With early AdWords, you had real control. You could see every search query, set precise bids, and operate in what felt like a true auction. Efficiency was rewarded, and smart advertisers thrived.
But times have changed.
Today, Google pushes automation and Smart Bidding as the gold standard. And while Smart Bidding can be incredibly powerful, it’s also incredibly dangerous when you feed it the wrong data. If you’re counting raw leads as conversions, don’t be surprised when the system starts flooding your pipeline with tire-kickers and freebie seekers.
This isn’t a bug—it’s a feature. It’s Goodhart’s Law in action: when a measure becomes a target, it ceases to be a good measure. Google’s machine learning doesn’t know (or care) if a lead actually becomes a client. It just wants to hit the target you gave it.
In this post, we’ll break down how Smart Bidding can go off the rails, why Google’s incentives aren’t aligned with yours, and what you can do to make sure your ad budget isn’t quietly getting torched while the algorithm celebrates a “win.”
Smart Bidding is Google’s term for its automated bidding strategies that use machine learning to optimize for conversions or conversion value. In theory, it’s a dream come true: you set your goal, let Google do the math, and watch the results roll in.
But here’s the catch—it only works when it has the right data and enough of it.
Google itself recommends around 30 conversions per month for Smart Bidding to work effectively. That’s because the system needs a meaningful amount of data to recognize patterns, test different bid strategies, and improve performance over time. Without that volume, it’s like asking five people who they’re voting for and thinking you’ve predicted the outcome of a presidential election. You’re making decisions based on a data set that’s too small to be reliable.
And even when you do hit that conversion threshold, Smart Bidding will only be as smart as the conversions you define. If your conversions are raw form fills or phone calls, guess what? The algorithm will optimize for more of those. Not for qualified leads. Not for signed clients. Just more raw leads—because that’s what you told it success looks like.
This is why Smart Bidding is not “set it and forget it.” It’s “set it and supervise it aggressively.” The system doesn’t think. It reacts. And unless you’re feeding it the right signals and watching it closely, it’ll start chasing the wrong goals—fast.
Economist Charles Goodhart once said, “When a measure becomes a target, it ceases to be a good measure.” That simple idea explains a lot of what goes wrong in Google Ads today.
Let’s say you’re running a lead generation campaign. You tell Google to optimize for “conversions,” and you define a conversion as any form fill or phone call over 30 seconds. Sounds reasonable, right? But here’s what happens:
Google’s algorithm starts pattern-matching. It figures out that people searching for terms like “free legal advice” or “pro bono lawyer” are quick to fill out forms. It learns that low or no-intent searches generate cheap, easy conversions.
Worse, it gets rewarded for showing your call extension on competitor brand searches—or even to people trying to call the courthouse. Busy users see a big, prominent “Call Now” button, tap it, and suddenly you’re paying for a wrong number.
Meanwhile, Google counts it as a conversion and treats it like a win. And just like that, your campaign becomes a magnet for price-shoppers, freebie seekers, and people who never had any intention of hiring a lawyer.
That’s not a failure of the system—it’s the system doing exactly what you asked it to do.
This is reward hacking, a concept from AI development where systems find shortcuts to achieve goals without actually solving the intended problem. The AI isn’t misbehaving—it’s just gaming the rules it was given. And in this case, the rule is “get more conversions,” not “get better clients.”
Goodhart’s Law is alive and well in PPC. If you make a metric the target, especially a shallow one like raw leads, the system will chase that at the expense of your real business goals.
There was a time when Google Ads (then AdWords) was a marketer’s dream: transparent, controllable, and fair. You could see every search query, bid precisely, and compete in a real-time auction that rewarded efficiency. It was the kind of tool that made advertisers better at their jobs.
But then Google went public.
As a public company, Google has a fiduciary duty to maximize shareholder value. That means revenue growth. And that means getting advertisers to spend more—whether they’re getting results or not.
Over time, the platform became less transparent and more “black box.” Search query reports got trimmed. Keyword match types got fuzzier. Manual bidding was pushed aside in favor of automation. And that “auction”? Recent court cases revealed it’s not as pure as we were led to believe—Google has the power to manipulate bids, inflate costs, and prioritize its own bottom line.
The shift is subtle but critical: Google no longer wants you to be efficient. It wants you to be just inefficient enough to keep spending.
That’s why Smart Bidding can be so dangerous. If left unchecked, it becomes a tool for Google to extract more spend while making you think it’s optimizing for your success. But what it's really doing is finding the point where you’re wasting the maximum amount of money you're still willing to tolerate.
This doesn’t mean Google Ads is broken. But it does mean that advertisers can’t afford to be passive. Because the platform isn’t on your team—it’s playing its own game.
If Smart Bidding is only as smart as the data you give it, the solution is simple in theory: give it better data. In practice, that means tracking and importing offline conversions—the real outcomes that matter to your business.
For law firms, that could be:
If you're optimizing for every call or form submission, you’re training the system on noise. You’re telling Google, “More of these, please,” without differentiating between a valuable case and someone calling to ask if you do notary services.
The better approach? Set up offline conversion tracking. Connect your CRM or intake system so you can push actual case outcomes back into Google Ads. That way, you're not rewarding the algorithm for fluff—you’re teaching it to find leads that actually turn into clients.
Is it more work? Absolutely.
But this is where the real leverage lives. Once Google starts learning from meaningful conversions, the optimization becomes real. You’re no longer chasing volume—you’re building a system that gets smarter over time at finding the right people.
Until then, Smart Bidding is driving blind.
If you’re not hitting 30 qualified conversions per month—or you’re working with a limited budget—then Smart Bidding needs some serious bumpers to stay on track.
Here’s how to keep control while still benefiting from automation:
Broad match might sound tempting (especially when Google pushes it), but it can open the floodgates to low-intent searches. Start with exact match to maintain relevance and quality. Expand later, carefully, if needed.
Every junk query you block is one less dollar wasted. Build negatives proactively—add known bad terms like “free,” “cheap,” or “pro bono” if those don’t align with your goals. Don't just set them at the ad group level—use account-level negatives to cast a wider net.
Run Search Terms Reports weekly (if not more often). Look for patterns. If you're paying for irrelevant clicks, act fast. Smart Bidding won’t stop it unless you tell it to.
We said it before, but it’s worth repeating: without qualified data, you’re handing the wheel to a driver who doesn’t know where they’re going.
Smart Bidding can be amazing—but only when paired with smart strategy.
Without guardrails, it’s like handing a toddler $100 and sending her into the grocery store to “buy some good food.” What she thinks is good (a cart full of candy) and what you had in mind (maybe ingredients for dinner) are two very different things. The system doesn’t share your goals—it just does its best with what it’s told, even if that leads to a cart full of junk.
Smart Bidding is a powerful tool—but it’s not magic. It’s a pattern-recognition machine that reacts to the signals you feed it. Feed it bad signals (like raw leads), and it’ll optimize for more bad results. Define success poorly, and the system will reward you with exactly that.
This is the heart of Goodhart’s Law in action. When you make a metric your target without context or quality control, it becomes useless—or worse, actively harmful. And when you combine that with a platform like Google Ads, which is designed to make you spend as much as possible without quitting, the risk multiplies.
The fix? Define success carefully. Use offline conversion tracking to train the system on what really matters. Keep your guardrails up—tight match types, aggressive negatives, proactive query reviews—especially if you’re not hitting the 30+ monthly conversion threshold.
Google’s automation isn’t evil. It’s just indifferent. It doesn’t know your business. It doesn’t care about client quality. That’s your job.
Use Smart Bidding wisely, and you can unlock serious performance. Use it blindly, and you’re just funding Google’s next earnings call.
About the Author
Brent Baltzer is a digital marketing strategist and the voice behind Baltzer Marketing, where he helps law firms and other service-based businesses drive real results through SEO and PPC. He specializes in high-performance campaigns that prioritize qualified leads over vanity metrics
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