If you start running Google Ads, one of the first things you’ll notice is that you need to choose a Google Ads bidding strategy to get your campaign up and running.
Every day, your competitors are making money from Google Ads, so why aren’t you? Every sale and conversion of theirs represents a missed opportunity for you to grow your brand. That said, Google Ads are hard to manage for a company that doesn’t specialize in marketing. On the whole, you’re likely focused on the day-to-day operations. Getting into the nitty-gritty of Google Ads probably isn’t the best use of your time.
At New Digital, we have managed Google Ads spending for hundreds of companies over the last decade. To help you understand which bidding strategy to choose, we will draw from our deep professional experience with Google Ads in this article.
How Does Google Ads Bidding Work?
For the most competitive and valuable searches on Google, there are multiple companies running ads at any given time. A major component of what determines whose ad is shown first is the Google Ads bidding strategy. Of course, it would be imprudent to fork over more money than you need to, otherwise, you would reduce your ROI. That’s why you need to craft a bidding strategy to ensure that your ads fulfill your goals, and generally speaking, conserve your ad spend.
Here’s how each step of the bidding process works:
Step 1: Set Bids: Advertisers choose a bidding strategy based on their campaign goals.
Step 2: Auction: Each time a user performs a search or visits a site with ad space that matches the advertiser’s keywords and settings, this triggers an auction to determine the ranking of the ads. The auction accounts for numerous factors such as your ad quality, target bid price, extensions, search context, and much more.
Step 3: Calculate Ad Rank: Remember, Google wants people to keep using them, so they’ll position your ad high if they think it converts well and helps the user out. They make this calculation based on the factors listed above.
Step 4: Calculate Cost: The price you pay is calculated based on your Ad Rank, the Ad Rank of the next highest ad below you, and your Quality Score. Essentially, you’ll pay just enough to beat the Ad Rank of the advertiser below you.
Choose Between Manual vs. Smart Bidding And Automated Bid Strategies
Let’s be clear from the outset. There is no “one-size-fits-all” bidding strategy. Rather, there are several that all fit different purposes. We’ll go over most of them in-depth soon, but here are the broad classifications we can make for every time.
Manual Bidding Strategy
Manual bidding strategies allow you to control your bids completely. Simply set the maximum amount you’re willing to pay for a click on your ad. If you have time to monitor your strategy and update your Google Ads bidding process every week, or perhaps even every day, then a manual strategy is great for giving you control. It’s also particularly useful when you have specific knowledge of the value of different keywords or placements based on your business goals.
Smart Bidding Strategies
Smart bidding strategies draw upon Google’s advanced machine-learning techniques to optimize bids in real-time during auctions. If you use it, you can benefit from a very granular type of optimization and bid adjustment based on billions of data points from historical ads. Google tailors your automated bid to the likelihood of achieving your specified conversion goals.
To use it, you must enable conversion tracking or use Enhanced CPC on display campaigns. However, Google recommends that as a bare minimum, you have 30 conversions in the past 30 days to use Target CPA and 50 conversions before using Target ROAS, both of which are smart bidding strategies.
Automated Bidding Strategies
Smart bidding is merely a subset of automated bidding strategies. Automated bidding encompasses all the strategies where Google Ads sets bids for you to achieve a specified goal, for instance, clicks, impressions, or conversions. Hence, it simplifies bid management for you, the user.
Generally speaking, smart bidding strategies are more sophisticated in their objectives than the rest of Google’s automated bidding strategies. Smart bidding will account for all sorts of contextual data that Google has in store, like the time of day, location, device type of the user, and so on. Hence, you’ll find that smart bidding focuses more on conversion-based outcomes with as much advanced data as Google can possibly find.
Which automated bidding strategy should I choose?
If you’re new to Google Ads or prefer to minimize manual management: Opt for an automated strategy. Maximize Conversions or Maximize Conversion Value can be great starting points if your goal is to drive sales or leads efficiently.
If you have a specific cost-per-acquisition or return-on-ad-spend goal: Choose a Smart Bidding strategy like Target CPA or Target ROAS. These strategies are sophisticated and can help achieve specific financial outcomes.
If you prefer hands-on control and have the time to invest in optimization: Manual CPC might be the way to go. It allows for granular control over bids, which can be beneficial if you have a deep understanding of your market and campaign performance, and prefer a hands-on approach.
8 Best Practices For Google Ads Bidding
Set Clear Goals For Your Bidding Strategies
Before you start thinking about bidding strategies, you should clarify your budget, the timeline of your campaign, your KPIs, etc. ahead of time. These things will shape your choice substantially, so don’t neglect them.
Leverage Seasonal Trends
Interestingly, many of our clients at New Digital tend to come to us for help on Google Ads immediately before the winter holiday season. Of course, this is rather imprudent; you should have planned to target seasonal trends long before the holidays.
Not to mention, you could be missing out on all sorts of industry-specific peak times, such as back-to-school periods for educational products, summer for travel and tourism, or end-of-financial-year sales for financial services. These periods often see a spike in consumer interest and activity, making them prime opportunities for advertisers to capture attention and drive conversions.
This requires a great degree of anticipation, which is why we recommend planning for seasonal inflows all year long.
Use Bid Adjustments
Bid adjustments allow you to increase or decrease bids under specific conditions, such as the user’s device, location, time of day, and more. This empowers you to put your ads in the situations where they are likely to perform best. For example, if data shows that your ads convert more users on mobile devices during evening hours, you can set bid adjustments to bid higher for these circumstances.
Bidding On Branded Keywords
Branded keywords, both your own and those of your competitors, can be a great way to get ahead of the competition. It might seem a bit unethical, but Google permits it, and it’s a great way to snap up clicks from your competitors.
Test Test Test
You should always vary your bidding strategies per campaign so you get the most accurate picture of what works and what doesn’t. You need to see what your target audience responds to, and A/B test the various elements of your Google ads such as headlines, descriptions, and call-to-actions, as well as experiment with various bidding strategies, ad formats, and targeting options.
You can run a test for each ad group, or you can run a portfolio bid strategy with the same strategy for multiple ad groups. Testing should be systematic and ongoing, with clear hypotheses and metrics for evaluation to ensure you can implement successful strategies at scale.
Keep in mind that the higher your budget, the more you can test your theories. You need a fair amount of money, usually, at least $1000, to get any sort of reasonable feedback on a campaign, as well as a large period of time.
Focus On All Stages Of The Funnel If Possible
Addressing all stages of the marketing funnel—from awareness and consideration to conversion and loyalty—is crucial for nurturing leads and maximizing customer lifetime value. Different stages require different messaging, targeting, and bidding strategies. For instance, at the top of the funnel, you might focus on broader keywords and use strategies that build awareness by maximizing impressions.
Don’t Forget Ad Quality
We mentioned earlier that one of the main factors in your Google Ads campaign, aside from your maximum bid, is your Quality Score. Having a high-quality score makes it so that you can save money on bidding.
Essentially, the more compelling and well-targeted your ad copy, the more your audience will engage with it. Moreover, your on-site user experience is a factor as well. Google wants you to make ad content that its users love.
11 Google Ads Bidding Strategies That PPC Marketers Use
Manual Cost-per-click (CPC) Bidding
Requirements: Active management and oversight by the advertiser to adjust bids.
Bid Type: Manual
Typical Goal: Control costs while aiming to drive traffic to your website.
Where It’s Available: Across all Google Ads campaigns that allow for CPC bidding, including Search, Display, and Shopping campaigns.
Manual CPC bidding lets advertisers set specific cost-per-click (CPC) for each Google Ads campaign. This strategy gives you direct control over how much you’re willing to pay for each click on your ads, enabling precise management of your advertising costs and the ability to adjust bids based on the performance of keywords or ads. It’s especially useful for advertisers who have a clear understanding of the value of different keywords or ad placements and wish to allocate their budget according to these insights.
We often recommend you use Manual CPC bidding when you’re launching a new campaign and want to closely monitor and adjust your bids based on early performance data. For example, if you’re running a campaign for a new product launch and you’re still gauging the market’s response, manual CPC allows you to adjust your bids in real time to ensure you’re not overpaying for clicks while still driving the desired traffic to your site. It’s a good tool for learning.
Maximize Clicks Bidding
Requirements: A set budget that Google will aim to fully utilize to get as many clicks as possible.
Bid Type: Automated
Typical Goal: To drive as much traffic as possible to your website.
Where It’s Available: Available for Search, Display, Shopping, and Video campaigns.
If you want to take your hands off and not worry about bid adjustments or strategy, then it’s ideal for you to maximize the amount of clicks you get within your budget.
A great scenario for employing Maximize Clicks bidding is when you’re focused on increasing website traffic for a blog or content site without a specific conversion goal in mind. For instance, if your objective is to maximize exposure for a seasonal informational campaign or to increase readership during a particular event.
Maximize Conversions Bidding
Requirements: Conversion tracking must be set up, as the strategy uses conversion data to optimize bids.
Bid Type: Automated
Typical Goal: To secure as many conversions as possible within your budget.
Where It’s Available: Primarily used in Search and Display campaigns, with some availability in Shopping and Video campaigns.
In this strategy, Google analyzes your conversions from your campaign based on your past data and Google’s advanced in-house data. By analyzing historical information about your campaign and evaluating the contextual signals present at auction time, Google Ads automatically finds the optimal CPC bid for your ad each time it’s eligible to appear. Of course, this will depend on the type of conversion you specify, such as sales, sign-ups, or other types of conversions.
Maximize conversions stands out when you have a specific event or promotion with a clear conversion goal, such as an online sale or a registration drive for a webinar. For example, if you’re launching a limited-time offer on your e-commerce site and your primary goal is to drive as many purchases as possible within a set advertising budget, Maximize Conversions can dynamically adjust your bids to target users most likely to convert.
Target Outranking Share
Requirements: Selection of another advertiser’s domain that you want to outrank in the search results.
Bid Type: Automated
Typical Goal: To outrank another advertiser’s ads in search results.
Where It’s Available: Search campaigns.
Target Outranking Share is a strategy that automatically sets bids to help your ads outrank ads from another specified domain in the Google Search results. This is the perfect way to increase your visibility over competitors. By setting a target outranking share percentage, you instruct Google Ads to adjust your bids to achieve the desired outranking position against the competitor’s ads as often as possible, based on your budget. You can see how this goes hand in hand with bidding on your competitor’s keywords.
Target CPA Bidding
Requirements: Conversion tracking enabled, and ideally, some historical conversion data for Google to use.
Bid Type: Automated
Typical Goal: To acquire as many conversions as possible at or below the target cost-per-acquisition (CPA).
Where It’s Available: Search, Display, Video, and App campaigns.
By targeting the cost per acquisition, you can get as many conversions as possible within your budget. This strategy uses Google’s machine learning to optimize bids and offers a balance between maintaining control over bid costs and leveraging automated bid adjustments to meet conversion objectives. It’s ideal for advertisers who understand precisely how much they’re willing to pay for a conversion and seek to drive as many conversions as possible at this target cost.
To understand why a business might use this, imagine running a lead generation campaign for a service and you know that a lead is worth $50 to your business. Why would you pay more for one? That’s how you can maximize efficiency in Google Ads.
Target ROAS Bidding
Requirements: Conversion value tracking set up, and ideally, a significant amount of conversion data.
Bid Type: Automated
Typical Goal: To achieve an average return on ad spend (ROAS) that you specify.
Where It’s Available: Search, Display, Shopping, and Video campaigns.
Target ROAS Bidding is an automated strategy that sets your Google Ads bids to maximize conversion value while trying to achieve the average return on ad spend (ROAS) you specify. Many advertisers like this strategy because it allows them to focus on a value-based outcome for their clients. To help you maximize ROAS, Google dynamically adjusts bids and analyzes historical data.
For many eCommerce retailers, target ROAS is perfect because they already have a pretty good idea of their sales margins. If the goal is to maximize profitability across all products, setting a Target ROAS that reflects the overall profitability targets can help ensure that ad spending is allocated toward the products that are most likely to achieve these financial objectives.
Enhanced cost-per-click (ECPC) Bidding
Requirements: Conversion tracking is enabled to allow the system to adjust bids for conversions.
Bid Type: Semi-automated (adjusts manual CPC bids)
Typical Goal: To increase conversions while still controlling bid amounts for clicks.
Where It’s Available: Search, Display, and Shopping campaigns.
Enhanced Cost-Per-Click (ECPC) is a bidding strategy that adjusts your manual bids up or down based on each click’s likelihood of leading to a conversion. It’s a balance of manual and automated strategies. While you still set base bid amounts, ECPC searches for valuable clicks that are more likely to convert, potentially increasing your conversions for the same amount of spend.
A good scenario for ECPC is when you’re running a campaign for a product with a known average conversion rate and want to optimize your bids to capture more of these valuable conversions without fully automating your bid strategy.
Target Impression Share Bidding
Requirements: A clear visibility or brand awareness goal, with a focus on achieving a specific share of available impressions.
Bid Type: Automated
Typical Goal: To maximize visibility by achieving a target percentage of impressions.
Where It’s Available: Search campaigns.
By targeting impression share, you can automatically set bids with the goal of your ad showing up on the top of the page, anywhere on the page, or on the absolute top of the first search results page, at your chosen impression share target.
When you’re raising awareness at the top of the sales funnel, brand visibility is your primary objective. For instance, if launching a new product or entering a new market, you might use Target Impression Share Bidding to ensure your brand appears prominently in search results. Therefore, you ensure that your ads are seen by a large portion of your target audience.
Maximize Conversion Value Bidding Strategy
Requirements: Conversion tracking enabled, with a focus on maximizing the total conversion value within a set budget.
Bid Type: Automated
Typical Goal: To maximize the total conversion value, such as revenue, within your entire budget
Where It’s Available: Search, Display, Shopping, and Video campaigns.
In this strategy, Google automatically adjusts your bids to get the highest possible conversion value within your budget. As opposed to merely maximizing conversions, you are attempting to maximize the entire value of the conversion with this strategy.
This bidding strategy is particularly beneficial for e-commerce businesses during high sales periods, such as Black Friday or holiday seasons. If your products vary in price and margins, then it’s useful to target the ones with the most profit.
Viewable CPM (Cost Per 1,000 Impressions) Bidding
Requirements: Aimed at campaigns where ad visibility and brand awareness are the main goals.
Bid Type: Automated
Typical Goal: To maximize ad visibility by paying only for ads that are deemed viewable.
Where It’s Available: Display and Video campaigns.
This is a type of strategy that you would use on the Google Display Network. Essentially, viewable CPM (vCPM) bidding allows advertisers to bid on 1,000 viewable impressions. That means you pay only for ads that meet the Interactive Advertising Bureau’s definition of viewability (at least 50% of your ad shows on screen for one second or longer for display ads, and two seconds or longer for video ads). Aside from raising brand awareness, you actually guarantee that your target audience sees your ads with this strategy.
Once again, if you are particularly focused on brand visibility rather than direct response or conversions, this is a strategy for you. It’s perfect for either reinforcing your product in an existing market or introducing it to a new market.
Maximum CPV (Cost-Per-View) Bidding
Requirements: Utilized in video campaigns where viewer engagement is a priority.
Bid Type: Manual
Typical Goal: To gain video views or interactions at a cost you’re comfortable with.
Where It’s Available: Video campaigns, primarily on YouTube and the Google Display Network.
Like vCPM, maximum CPV bidding allows advertisers to set the maximum amount they’re willing to pay for a view or interaction with their video ads. In this context, a “view” is defined as someone watching your video for 30 seconds or more (or the entire duration if it’s shorter than 30 seconds) or interacting with the video, whichever comes first.
If you have an educational-type video marketing campaign, then vCPM is perfect for ensuring that you only pay for messages that actually land. By setting a maximum CPV bid, you can control your advertising spend while ensuring that your video reaches a wide audience, encouraging views and interactions that can lead to increased brand awareness and interest in your product.
Unlock The Power Of Bidding With New Digital
If you’re unsure what bidding strategy to choose, you probably need to do more research. After all, Google Ads can be highly nuanced. A bidding strategy that works for one company might not work for another.
Having experience with a variety of different industries and audiences, New Digital can manage your Google Ads, from writing ad copy, segmenting ad groups to selecting a bidding strategy. Get in touch with us so we can start developing the best strategy for your business.
