Have you seen auctions of paintings, and everyone wants that masterpiece? So, they bid as high as possible to possess the item.
Something similar happens behind the scenes of Google Ads. But there isn’t a person doing an auction, instead just some lines of code through which you bid to show your ad to the audience. The bidding process is different here.
That’s where bid strategies in Google Ads come into play.
You can get high revenue without breaking the bank if you choose the right Google Ads bidding type and combine it with a strong strategy. But what if you choose the wrong Google Ads bid strategy? Then, your entire budget for the campaign will go to waste.
But don’t worry. There’s an ideal way to ensure your campaign performance exceeds and skyrockets your business growth.
It is understanding bid strategies in Google ads. According to stats, using the right strategy can increase your conversion to 142.86%. In this blog post, we’ll discuss 11 different types of Google Ads bidding strategies and how they can significantly impact your campaign types.
Let’s get started.
What Is the Process Of Google Ads Bidding?
Many advertising platforms work on a pay-per-click system. But among them, Google is the most effective platform that promotes your business through the Google Ads system.
But how does it even work?
Suppose a user searches for a keyword on Google. Now, what happens next is that plenty of advertisers compete to show ads to the searcher. You’ll get a better placement if you bid more and have a high score.
The bidding system is generally automatic, and the algorithm considers many factors:
- Quality score
- Relevance with the target audience
- Relevance of ad and landing page
After considering these things, Google decides how often your ad will be shown to the audience and the cost per click. But there is room for flexibility. You can manage and fine-tune your bids to align with your marketing objectives.
For instance, if you aim to increase your presence in search results and across display ad networks. It allows you to raise bids for specific keywords or placements strategically.
Likewise, if cost-effectiveness is a priority, you can lower your bids for less competitive keywords and placements. It allows you to optimize your advertising strategy for optimal results.
Manual vs. Automated Bidding Vs. Smart Bidding
There are two major types of Google ads. They are manual and automated. But there is another bidding option known as smart bidding. You should know all the bidding methods to utilize these techniques to their fullest potential.
It is when advertisers are willing to pay a maximum amount for every click. They want their keyword to be placed on the highest rank. The basic advantage of this is that advertisers have complete control over the budget spending and keyword placement.
You can bid at the ad group or keyword level in the manual bidding strategy. But there is one drawback, which is it can be time-consuming, and staying on top of trends can be difficult.
There is no need to do any manual work in the automatic bidding. These work automatically, and all the bids are adjusted in real-time. It allows you to get better results with minimum effort. There are many ways to achieve this, some of which are below.
- Maximize clicks bid strategy.
- Target impression share
- Automated bid strategy for video ads
It is relatively less time-consuming, and the accuracy rate is higher than manual bidding. But the biggest downside is it can cost you a lot of money, and tracking the performance of campaigns can be difficult. It’s because the algorithm has more control over your advertisements.
It is also an automated technique, but it’s specifically made for Google Ads. Various factors are considered in it, such as query of user, device type, location, etc. Here are some types of this technique:
- Maximize conversions
- Target cost per action (CPA)
- Maximize conversion value
- Target return on ad spend (tROAS)
After considering these things, it shows the ads to the most relevant people. It’s more cost-effective in achieving marketing goals. The techniques that fall under Smart bidding techniques often utilize auction-time bidding. It optimizes the bids according to conversion to conversion value in every auction.
|Manual Bidding||Automated Bidding||Smart Bidding|
|High control and manual||Some control, automated||Limited control, automated with AI|
|Requires constant manual adjustment||Adjusts based on preset rules||Real-time adjustments based on machine learning|
|Suitable for experienced advertisers||Accessible for advertisers with some experience||Accessible for advertisers with some experience|
|It can be time-consuming for large campaigns||Saves time, especially for large campaigns||Time-efficient for ongoing optimization|
|Ideal for specific bid strategies||Offers flexibility for various types of campaign ultimate goals||Optimizes for specific conversion ultimate goals|
|Less reliant on extensive historical data||Requires sufficient historical data for optimization||Relies heavily on historical data for accuracy|
|E.g., bidding $2 for a keyword||E.g., Using the Maximize Clicks Bids technique to increase clicks.||E.g., Employing “Target ROAS” to achieve a 300% return on ad spend.|
11 Types Of Bidding Strategies In Google Ads
Google Ads started manual bidding advertising in 2000. The format remained the same for almost ten years, but in 2010, Google launched eCPC. What is it?
It’s an enhanced form of CPC bid strategy. It is considered a transition from manual bidding to an automated system.
Manual bidding → Semi-automated version
After that, Google Ads evolved at a rapid speed. Many more strategies were introduced because of this transition, such as:
- Target CPA
- Maximize Clicks
These techniques were introduced in 2013. But later on, after the smart bidding strategy, many strategies improved to a great extent. Another important thing you should know is that two methods are obsolete now. They are as follows:
- Target Search Page Location
- Target Outranking Share
Now that you know the overview of these techniques, it’s time to find which one is most suitable for your business. Every single campaign should have its unique goal and a bid strategy. Here are the top 11 effective bid strategies that you should know about. Knowing a single strategy won’t make your entire campaign successful. So, let’s take a look at these common strategies.
1. Target Cost Per Acquisition (CPA)
Acquire conversions at a predetermined cost-efficiency level.
It is a bidding technique that works exceptionally well to optimize conversion rates. If increasing conversions is on the checklist of your business goals, then you should implement this strategy for the campaign.
Through this, you can convert the users with specific acquisition costs. In this method, Google Ads will do all the work for you. It means your bids campaign will be set automatically based on your CPA. The cost for conversion rates can vary depending on the factors we mentioned earlier.
But this can be extremely confusing if you don’t know about the customer acquisition costs. So here’s an example to understand this.
But remember, Cost per Acquisition (CPA) is the maximum amount you’re willing to spend to acquire a single customer.
Let’s say you’re selling a product for $100. Setting your target CPA at $100 wouldn’t make sense because that means you aren’t getting high profits with each sale. The goal is to make a profit.
While selecting this bidding strategy, you can specify your desired target CPA. It ensures your advertising efforts aim for profitability.
2. Utilizing Target Return on Ad Spend (ROAS)
Maximize advertising revenue relative to your ad spend.
Most advertisers make mistakes in this technique because it confuses them a lot. Do you know what’s the reason behind that?
It’s because you need to know math. You might wonder why you must do the math as a marketer.
In this strategy, knowing math means more chances of getting results. In Target ROAS, Google Ads aims to maximize the value you get from your ad spend. Instead of a fixed number, it’s percentage-based. It allows you to set a specific return on ad spend goal.
Let me show you a practical example of this.
In your upcoming Google Ads campaign, your goal is to achieve a significant return on investment. You aim to make $100 in sales for every $20 you spend on ads. To calculate this, you can use a simple formula:
Total Sales ÷ Ad Spend x 100% = Target ROAS
For instance, let’s calculate the Target ROAS for this scenario:
- Total Sales: $100
- Ad Spend (Clicks): $20
$100 (Sales) ÷ $20 (Ad Spend) x 100% = 500% Target ROAS
That’s how you can calculate your ROAS and ensure you’re profitable.
3. Maximize Conversions
Get as many conversions as possible within your budget.
Among all the bidding techniques, it’s considered one of the simplest. All you need to do is set a maximum daily budget for your campaign. From there, Google will do the bidding so you can get conversions.
Suppose your daily budget is set at $100. Google will utilize it strategically to maximize the number of conversions.
However, if each conversion costs $75, Google won’t bid on them. Why?
Because it’ll exceed your budget.
But here’s what you must remember before opting for this strategy. You should ensure that your daily budget is at a comfortable spending level.
4. Maximize Conversion Value
Maximize the total value of conversions generated.
This strategy was added in August of 2019. It’s a relatively new technique and works essentially like Target ROAS. The Google Ads platform utilizes the budget to maximize your return on ad spend.
The major difference is that you don’t need to specify target ROI. In this, the algorithm optimizes your ad spend to the best of its capabilities without specific ROI constraints.
5. Enhanced Cost Per Click (ECPC)
Optimize bids for better conversion performance.
This technique is a mix of both manual and smart bidding. You’ll set basic CPC for ad groups and keywords. But after that, the algorithm will take over. It’ll optimize these for you.
The platform has all rights to either reduce or increase the bid amount. Why?
This reduction or increase in amount is based on the chances of sales you can get from the bidding. But what if the search is extremely competitive? And even worse, the CPCs are also high. What should you do in this case?
Then Google will reduce your bid to cost less because the chances of conversions are also low. This bidding technique is for both:
- Display networks.
Basically, the goal of this bidding technique is to have control of your keyword bids. It is also helpful in increasing the click-through rate.
6. Maximize Clicks
Get as many clicks as possible.
It is an automatic bidding technique based on your maximum daily budget. One thing you should know about this strategy is that it isn’t perfect for getting leads or conversions. Do you know why?
Because it doesn’t consider the quality or relevance of traffic.
Yes, you might get thousands of clicks with this technique. This is your most viable option if you have a limited budget and limited search volume for campaign keywords.
7. Manual CPC Bidding
Allow advertisers full control over their bid amounts for each click.
With this, you can get more control over your bidding strategy. But there are two drawbacks as well. If you’ve more control, that means you have to spend more time on the following:
- Monitoring average costs
- Making adjustments
This is not the best option if you’re not a Google Ads expert.
In Manual CPC bidding, you control setting bids for various ad groups or keywords. If you think another individual keyword or search term has more potential, you can immediately remove your money from the campaign, adjust the budget, and change campaign settings.
8. Cost Per Thousand Impressions (CPM)
Maximize the exposure of your ads and generate brand awareness through paid impressions.
You can tell by the name that this bid is based on the number of impressions. But remember, this option is only for:
- Display Network
- YouTube Ads
It isn’t available for use on the Search Network.
9. Cost Per Thousand Viewable Impressions (vCPM)
Pay for every thousand ad impressions that are viewable by users on the platform.
If you want to increase brand awareness, manual bidding is the best option. But like CPM building, this option is also for:
- Display Network
- YouTube Ads
In vCPM bidding, the maximum cost is usually set at around 1,000 viewable impressions.
Viewable impression on YouTube = 2 seconds of video watched
Viewable impression on Display Network = 1 second of video watched
10. Cost-Per-View Bidding (CPV)
Pay for video ad views at a specified cost-per-view rate.
This technique is only if you want to do video advertisements on Google Ads or other related platforms such as YouTube Ads platform.
But how do people interact with video? These interactions can be any of these:
- Clicking on CTA
- Overlay clicks
- Companion banners
A view is equivalent to how long a person watches your video. Let’s understand it with this example.
With CPV bidding, you begin by specifying the highest amount you’re willing to spend for a view or interaction. This is referred to as your maximum cost-per-view.
But here comes the next big question. How do you know what you should set as your CPC?
It’s simple. Start with less and adjust according to the ad’s quality and rank. You can slowly increase the budget to gain better results.
11. Target Impression Share Bidding
Maximize the visibility of your ads by targeting a specific impression share percentage.
It is a new bidding strategy introduced in 2018. Through this, you can increase your brand awareness and reach many people. There are other types of Google remarketing campaigns but this one best.
Suppose you are an SEO agency and want to dominate SEO agency search keywords. You should enter the goal percentage of the impressions.
Even if you set your sights on 80% or 90%, reaching such a goal would likely require bidding high amounts for views and clicks. Moreover, having high impressions doesn’t guarantee that your ad will be viewed or clicked, especially if it appears in a lower ad position.
This strategy is particularly useful when brand visibility and ad placement are top priorities in your advertising campaigns. It’s commonly used for branded search campaigns or specific high-value keywords where you want your ads to appear as frequently as possible in relevant search results.
Google Ads has various bidding techniques which can be customized according to the campaign’s goals. Remember, choosing the right strategy means more chances of growing the business. For example, if you choose the Maximize Conversions bidding strategy, your campaign goals should also align with this technique.
It’s extremely important to be clear about what you want to achieve with the campaign. As mentioned above, there are plenty of strategies, so choosing a suitable one for your business can be extremely difficult.
You might have a wide range of results you want to achieve with the Google Adwords campaign. Such as getting more traffic on the website? Maximize sales and conversions?
But if you know your targets and have clear, realistic goals, achieving those ultimate goals will become much easier for you. Even with the simplest bidding strategies and a limited advertising budget, you can skyrocket your brand awareness campaigns and increase the likelihood of conversion.
After assessing your primary goals, you can figure out the most suitable technique that can help you get maximum results. But it doesn’t stop there. After running a campaign, you should check data, do conversion tracking, and use advanced machine learning programs and analytics to ensure your strategy works effectively.
Related: Future of Advertising