Full Answer
Google's Smart Bidding learns which users convert and finds similar audiences—but only from conversions that reach Google. When 30-40% of purchase events are hidden by ad blockers, Safari ITP, or iOS privacy restrictions, Smart Bidding optimizes for the visible 60-70% of buyers while systematically missing the rest. The algorithm is working correctly with the data it has—the data is the problem.
The same mechanism affects Meta Advantage+ and TikTok's optimization. Incomplete conversion signals produce incomplete audience models. The platforms optimize for the wrong proxy of your best customer.
Server-side event tracking recovers the missing signal. When all conversions reach the platforms, the algorithms have complete training data and can do what they are designed to do.