Breaking Down Google’s Most Significant Bidding Update in a Decade

Google just announced Smart Bidding Exploration a major new tool that marks the biggest change to its ad bidding system in over 10 years.

While it’s designed for advertisers, this update has serious implications for publishers too especially those relying on AdX, Open Bidding, or programmatic revenue. Why? Because it fundamentally shifts how demand reaches your inventory.

Here’s what’s changing and how to stay ahead of it.

What is Smart Bidding Exploration?

Smart Bidding Exploration is a new AI-powered experimentation tool that helps advertisers test bidding strategies like:

  • Maximize Conversions

  • Target CPA

  • Target ROAS

The goal: Let Google Ads automatically test and optimize different bidding models to improve campaign performance across channels.

At the same time, Enhanced CPC (eCPC) a semi-automated strategy still used by many advertisers is being fully deprecated by early 2025.

So advertisers are being nudged hard toward full Smart Bidding adoption. Which means less manual control… and more machine learning in charge of where spend flows.

Why This Matters for Publishers

This might sound like an advertiser-side update but it’s not just about how they bid. It’s about how demand is routed across the web.

Here’s how Smart Bidding Exploration affects you:

1. More Spend Will Shift to Performance Max

Performance Max blends ad placements across YouTube, Search, Display, and more — all driven by AI. That means:

  • You might see more blended demand entering AdX.

  • Contextual matching may matter less performance and conversion signals will take priority.

2. Manual Bidding Is Fading Fast

Advertisers won’t set specific bids for placements, devices, or keywords anymore. The value of a particular page or format will be decided by algorithms not manual targeting.

3. You May See More Volatility in CPMs

As Google tests different strategies in real time, CPMs could fluctuate, especially for new placements or under-tested formats. Some may rise sharply; others could drop without warning.

What You Should Do (Starting Now)

You can’t control the algorithm but you can adapt to it. Here’s how:

Track CPMs by Campaign Type

Use demand analytics to monitor performance from Performance Max vs traditional campaigns. These newer campaigns may behave differently in terms of fill rate, CPM, and viewability.

Watch High-Performing Placements Closely

Smart Bidding might deprioritize some of your best spots if they don’t align with its conversion goals. If a top ad unit drops in revenue, recheck layout, format, or user engagement.

Educate Direct Advertisers

If you run direct deals, advertisers may still think in terms of manual bidding. Help them understand:

  • Why their campaigns may perform differently now

  • How to succeed with AI-optimized targeting

  • The importance of strong creative and conversion paths

Offer Video and Native Inventory

Formats that play well with blended spend (like video, native, and in-feed) will likely attract more demand under Smart Bidding logic. Static banners alone may miss out.

What This Signals: Full Automation Is Here

This isn’t just about retiring eCPC. It’s a bigger push from Google to automate ad buying, optimization, and distribution.

Old methods — contextual targeting, manual bidding, predictable CPMs — are losing ground. In their place, conversion signals and AI models now decide where the money goes.

Google has already confirmed the phase-out of Enhanced CPC and the shift toward full Smart Bidding. Read their official update here.

Takeaway​

Don’t panic but don’t sit still either. If your monetization strategy still relies on legacy assumptions (manual bids, context match, static placements), it’s time to evolve.

This Smart Bidding shift means:

  • Less buy-side control

  • More AI-driven spend

  • Greater need for sell-side optimization

The rules are changing. But if you’re watching the data, testing formats, and educating partners you’ll stay ahead of the curve.

Fill Rate

If you’re not making the most of your ad space, you’re leaving money on the table.

MagicBid helps web, app, and CTV publishers maximize revenue with smarter ad placement and optimization tools.

  • Web Monetization: Get better ad visibility, higher engagement, and more revenue from every impression.
  • In-App Monetization: Connect with premium advertisers to effortlessly boost fill rates and eCPMs.
  • CTV Monetization: Deliver high-quality, tailored ad experiences that keep viewers engaged and advertisers paying more.

With MagicBid’s advanced ad tech and expert support, you can turn your traffic into higher earnings without the guesswork.

Connect with us now to get a free ad revenue evaluation.

60

Get the Latest Updates, Industry Buzz and Expert Insights from MagicBid-Delivered Straight to Your Inbox!