Easy Guide to Bidding Strategies
Picking the right Google Ads bidding strategy and implementing it is critical to driving your ad costs down.
While creating a new campaign on Google Ads, Google asks what type of bidding you want to use: Automated or Manual?
Most people opt for automated because whom the heck wants to adjust bids all the time if you’re running multiple campaigns? Nobody.
But in Google Ads, there are numerous bidding you can pick between and considerably more ways you can put them to use for maximum results.
Let’s walk you through all the different types of Google Ads bidding strategies
Google Ads Bidding Strategies
- Target CPA
- Target ROAS
- Target Search Page Location
- Target Outranking Share
- Maximize Clicks
- Maximum Conversions
- Enhanced CPC
- Manual CPC
- Cost-per-thousand impressions (CPM)
- Cost-per-thousand viewable impressions (vCPM)
Let’s Understand Each one of them in detail:
1. Target CPA (Cost Per Acquisition)
Target CPA bidding strategy can be used when your objective is to generate conversions within a specific cost. In the CPA bidding strategy method, Google will automatically set your bids (CPC bids) based on the CPA you have defined for your campaigns. In order to understand the optimum CPA cost, Google needs historic data to estimate the CPA for your campaign because the CPA can differ from product to product and service to service.
2. Target ROAS (Return on Ad Spend)
Return on Ad Spend is the amount you are expecting on every dollar you spend on your ads. Target ROAS strategy focuses on driving high conversion value than the number of conversions.
Let’s take an example and understand it with some math. Let’s say you are expecting $30 for every 10$ you spend then the Target ROAS to be defined in the campaign will be
ROAS = Revenue x 100%
ROAS = $ 30 x 100% = 300%
If we set 300% as the Target ROAS in the campaign, Google will try to achieve as defined but might not be able to every time achieve the no, because expectation on ad spends has to be justified with respect to the product you are marketing. You can’t set very high Target ROAS, which in reality is impossible to achieve.
3. Target Search Page Location
Target Search Page Location bid strategy can be used to target your ads on the first page of the Google search result page or on the top of the search result. So the first page means, your ad might be shown at the bottom of the first page as well, which you won’t be okay with.
Won’t recommend using this strategy as the ad position depends on the Ad Rank of your ad which is related to your bid and quality score. So if your Ad Rank is high then your ads will anyways achieve a higher position in paid search. Also, another reason why you shouldn’t go with this strategy is that Google will raise your bids automatically with no upper limit defined for your bid.
4. Target OutRanking Share
Target Outranking share bidding strategy is an automated bidding strategy where you can outrank your competitor’s ad on Google search.
When you and your competitor’s ads are getting triggered for a particular keyword in the same auction, Google will raise your bids to rank you higher above your competitor’s ad.
The only issue with this bidding strategy is that you can only outrank one competitor at a time. But while you are advertising, there would be multiple competitors on Google ads, so you will have to test and see if this strategy works for you or not
5. Maximize Clicks
Maximize Clicks is a type of bidding strategy where you can get maximum clicks within the daily budget defined for your campaign. Maximize clicks is also an automated bid strategy wherein Google will decide per click bid.
This strategy is good to drive maximum traffic within your daily budget. If your brand is new or if you want to create awareness and increase the visibility of your website, you can go with this strategy.
6. Maximize Conversions
Maximize Conversion bidding strategy is an automated bidding strategy wherein Google will optimize your campaign to get you maximum conversions, set within your daily budget.
For Eg: If your daily budget is $ 100. Google will try to get you maximum conversions within that budget.
Before setting up this bidding strategy, make sure that you have set up an optimum daily budget for your campaign. Do test the campaign by running it for at least 15 days and see if this bidding strategy is working for you or not.
7. Enhanced CPC
Enhanced CPC (ECPC) bidding strategy is a type of bid strategy where Google automatically increases your bid if it feels that there is a possibility of conversion during an auction. The bid amount can be anything, there is no cap limit for this, Google decides the bid amount here. So the bid amount can shoot up by 200% or maybe more than that as well!
So while using this type of bidding strategy, be careful, how your bids are fluctuating and monitor how many conversions you are able to generate from your daily budget. If you observe that the bids are going very high, then switch to another bid strategy or else you might exhaust your budget with no or fewer conversions.
8. Manual CPC
Manual CPC bidding strategy is a bid strategy where you define how much amount you are ready to pay for one click. It’s a manual strategy that gives you complete control over your bids. If you don’t want to move on any of the automated bid strategies then this is the best one to go with and control it effectively.
Google has also given an option of combining Manual CPC bidding strategy with ECPC bidding strategy but I won’t recommend going ahead with this because Google will automatically increase your bids if they are an opportunity for a conversion.
9. Cost-per-thousand impressions (CPM)
With CPM, you’ll pay depends on the number of impressions (times your ads are shown) that you get on YouTube or the Google Display Network.
10. Cost-per-thousand viewable impressions (vCPM)
You’ll be able to use this bidding if your ads are intended to build an increase more awareness however not essentially generates clicks or traffic. It allows you to the highest amount you need to pay for every 1,000 viewable impressions on the Google Display Network. If the goal of your campaign is a direct action from customers, like buying a product or filling out a form then probably vCPM bidding is not for you.
Bidding Strategy in Google Ads
- Go to Google Ads account
- Select a particular campaign
- Go to the settings tab
- Under Settings, you will find bidding
- Click on bidding
- You will see all bidding strategy options
It is important to select the right bidding strategy, selecting the right bidding strategy will depend upon the business objective. Also, not every bidding strategy would work for your business. The best way is to consider the business objective and then define the bidding strategy and keep experimenting with the other ones if they are not working.