Thierry Henry opened the scoring after seven minutes after appearing to force the ball home from close range with his arm, before Lionel Messi wrapped up the win on the stroke of half-time, coolly slotting home after Henry's shot had been parried by Allan McGregor.
But despite being outclassed for long periods Smith was full of praise for his side's work ethic.
"It was a tough night, I can't be critical," he told Sky Sports News. "They had a lot of possession, we worked very hard without any great reward.
"Any team will struggle here."
On Henry's goal, Smith added: "You've got to look at team first and it was poor defending.
"If he puts it in with his hand then we have to accept it, but we'll look at ourselves first."