When creating ads to attract new potential customers, it may seem like the copy is the most important part, right? But that’s only one ingredient in your recipe for success. Another significant part of your strategy is Google Ads bidding.
The fact is that competitors are constantly working just as hard as you to grab the attention of your target audience — and that’s where Google Ads bidding enters the kitchen.
You can look at your Google Ads bidding strategy as the overall seasoning of your marketing efforts. It not only gets your ad to the customer, but it makes it stand out from the crowd with minimal ad price. That’s a win/win and it can’t happen accidentally. You need to be intentional with your bid strategy to make sure you’re letting your ad shine and increasing audience conversion for the best price. After all, what’s the point of a perfectly crispy french fry if there’s no salt to bring it to life?
Keep reading as we break down exactly what Google Ad bidding means, what strategies you can use and why your strategy matters in the long run:
How Google Ads Bidding Works
Every time you’re on a website within the Google search network or search results and there’s ad space available, Google runs an auction. The “winner” of this auction gets their ad featured in that ad space — but just for that specific auction or moment. When another person comes to the website or if you go to a different search result, another auction will take place to determine whose ad gets featured.
Due to this process, there are multiple strategies that companies can use to bid for ad space. Your end goal will determine which strategy is best to use. You may want to prioritize any mix of the following:
- Overall engagement.
A smart bidding strategy will lead you to your marketing goals without wasting time or money.
To start a new campaign with Google Ads, you’ll be asked to choose between manual and automated bidding. For many, an automated bid strategy is the best option because it means you don’t have to consistently — and repeatedly — adjust bids for multiple campaign efforts.
However, that’s not where your choices end. Google offers 12 types of manual and automated bid strategies to choose from.
To continue our cooking analogy, Google’s giving you a lot of seasoning options and it can be overwhelming if you don’t know what everything is. You want to make sure the sugar goes with the cake and the salt goes with the potatoes. In other words, your strategy has to match your business goal.
12 Types of Ad Bidding Strategies
Here we’ll explore the 12 different types of Google Ads bidding strategies and why you might choose to use each one.
Remember, not every strategy is perfect for every situation. Depending on your company’s specific marketing efforts you may choose to use one, two or any combination of multiple to get your desired results.
1. Target Cost Per Acquisition (CPA)
If conversion tracking is your No. 1 priority, target CPA bidding is probably your best strategy to use. This bidding strategy prioritizes conversions (e.g., sales, signups, app downloads, etc.) by trying to convert customers at a specific acquisition cost.
The CPA is the amount of money you are willing to spend to acquire one customer. This method ensures you stay within budget while still hitting targets and increasing leads for your ad.
When you choose the target CPA strategy, Google Ads will automatically place your bids on each ad space auction based on your CPA. Depending on the auction, you may end up with ads that cost less or match your acquisition costs.
Important note: Aim to set your target CPA amount at a price that is profitable. You don’t want to choose a target CPA that’s the exact same price as the product you’re selling or you’ll break even.
2. Maximize Conversions
This strategy is very straightforward: It aims to maximize conversions.
When creating a new campaign in Google, you can set a maximum daily budget and Google will then automatically bid for you to get the most conversions within that amount. This can be an easy and beneficial strategy if you plan to use your entire budget in a single day (instead of over a longer period of time).
Using the maximum daily budget that you set, Google will automatically run your bidding for you to get the most conversions for your money. Also, don’t worry about your entire budget going to one auction. Google optimizes how they use your budget so that it finds the most people that are also most likely to convert. If a single conversion is equal to your entire budget, Google won’t bid for it.
However, there isn’t any bid limit control for this strategy. This can be a disadvantage if your clicks become very expensive and exceed your daily budget.
3. Target Return on Ad Spend (ROAS)
Does your marketing campaign have a specific return on investment (ROI) with regard to pay-per-click (PPC) spending? If you answered yes, then the target ROAS strategy may be your preferred strategy.
This can seem like a complicated strategy because it involves more math than most marketers typically do in a work day, but thankfully it’s pretty easy once you get down to the heart of it.
ROAS is a metric that considers your conversion values or Google Analytics eCommerce revenue values when making an ads bid. When you create your campaign, you can set your bid strategy’s target ROAS as a specific percentage to maximize conversion value based on your preferred return.
To figure out this percentage, you would calculate:
Sales / ad spend x 100 = Target ROAS (%)
For example, if you would like $5 return for even $1 you spend on clicks, then the math would be:
5 / 1 x 100 = 500%
4. Maximize Clicks
If your marketing campaigns currently have a strong conversion performance, it may be time to prioritize traffic generation. In that case, there’s the maximize clicks strategy.
With this scenario, you can set your automatic bidding strategy based on your maximum daily budget. Google Ads will automatically bid for you to get as many clicks as possible without exceeding your set maximum budget amount. This means you may also lower your cost per click (CPC), as well as increase your search impression share (SIS).
This also works well for those that have a limited budget to work with and/or low search volume for keywords in your campaign.
However, what you gain in volume may come with a sacrifice to quality conversions.
5. Enhanced Cost Per Click (ECPC)
ECPC is a hybrid strategy that uses both automated and manual bidding. When using manual CPC, you can choose to give Google Ads the ability to increase or decrease your bids based on the chance of a conversion. If there’s less of a chance of conversion in this ad space, Google will decrease your bid since it’s less significant for your campaign.
The benefit of this strategy is that you get the chance to set your basic CPC based on your ad groups and keywords — and then Google algorithmically adjusts them for optimized results (thanks, machine learning!). These factors can be based on:
- Time of day.
- Browsing behavior.
- Geographic location.
- The device being used.
- And more!
With this option, Google helps you with bid adjustment so your ad campaigns can achieve your goals while still averaging out at your max cost per click settings.
6. Manual Cost Per Click (MCPC)
If you would like significantly more control over your Google Ads bid strategy than ECPC, you can opt for a manual cost per click strategy.
Based on your own research and knowledge, you can set bids for each different ad group or keyword in Google Ads. If some search terms increase results better than others, you can then choose to instantly adjust each of their budgets accordingly.
If you have a new account or campaign, it may be worth it to try this option to learn what works best for your business while also ensuring each ad stays within your budget.
On the flip side, increased manual control also means you’ll be spending more time monitoring each Google Ads campaign and making adjustments. If you’re new to Google Ads, this may not be the most user-friendly option. It’ll also take more work and experience to get the best bang for your buck since there’s a learning curve.
7. Maximize Conversion Value
Added in August 2019, this Google Ads bid strategy is actually different from the “maximize conversions” strategy.
Instead, the maximize conversion value strategy works more similarly to target ROAS (except you don’t have to set a target ROI): Google Ads uses its algorithm to maximize the return on your ad spend as best as it can.
Using the information Google knows about each user, it automatically sets your bids to find the best CPC for each auction. A great part of this strategy is that it will guarantee you’re getting the highest dollar value revenue from your ads — even if you end up spending more.
8. Target Impression Share
Target impression share is an automated bidding strategy that aims to reach your campaign’s Impression Share goals. It’s also a great option if you want to guarantee that your ad is showing up for brand keywords.
You can choose where you want your ads to appear on the target search page location for viewers based on 3 options:
- The topmost part of the page.
- The top (or near the top) of the page.
Remember to set a maximum CPC bid limit for this strategy that matches your end goals — otherwise, you might burn through your budget too quickly.
9. Cost Per Thousand Impressions (CPM)
This strategy bids entirely on impressions and is only available on the Display Network and YouTube campaigns. Your business gets charged based on your target CPM, which is the average bid (as opposed to the maximum bid) you’d like to pay for every 1,000 times your ad is shown.
The main benefit of using CPM bidding strategy is that it targets brand awareness and can get you the highest number of unique viewers possible. However, each unique viewer is actually able to skip your ad on YouTube, which could decrease its overall effectiveness.
10. Cost Per Thousand Viewable Impressions (vCPM)
Just like No. 9, this bid strategy can only be used for the Display Network and YouTube Ads. It also does a great job with brand awareness, so if that’s your goal this is a solid bid choice.
The vCPM strategy is a manual bid option where you can set your maximum cost on a viewable 1,000 impressions. Google Ads considers watching 2 seconds of a video ad on YouTube or 1 second of a display ad on the Display Network as a “viewable impression.” This ensures that the viewer has to have clearly seen your ad to be counted as an impression (instead of just a corner of it on a website).
It’s not a great strategy for driving conversions, but it does offer predictable pricing and helps raise your brand awareness for your target audience.
11. Maximum Cost-Per-View Bidding (CPV)
With the maximum CPV bidding strategy, you can let Google know the highest bid you’re willing to pay for a video view or interaction with your ad. This type of bid strategy is only applicable to YouTube campaigns. In fact, it’s currently the default bid setting when you create an ad for YouTube.
Google counts a view when someone watches your ad for 30 seconds. If your video ad is less than 30 seconds, then a view is only counted if the viewer watches the entire ad. A YouTube “interaction” could include any type of click to your ad (e.g., CTA, overlay, banner, etc.).
An advantage of this strategy is that it only counts the number of people who actually watch your ad — not the ones who skip or close the video. This can save you money if you’re on a limited marketing budget.
The cons? Many people choose to skip ads on YouTube videos, which means there are fewer chances for conversions. However, if you’re prioritizing brand awareness, this should be all right.
12. Portfolio Bid Strategies
A portfolio bid strategy is when you create one bid strategy in Google Ads that can then be applied across multiple campaigns — rather than one by one.
When you open portfolio bid strategies in your Google Ads shared library, there are 5 options:
- Target CPA.
- Maximize conversions.
- Maximize conversion value.
- Target ROAS.
- Target impression share.
Thanks to our prior breakdowns of these strategies, you should be able to make an educated choice of which serves your goals best (If you choose a portfolio bidding strategy).
Google Ads Bidding Best Practices
Now that you know the 12 Google Ads bidding strategies you can choose from, it’s time to understand what it means to put one or more into practice!
If you want to drive results, here are our tips for bidding best practices:
- Utilize the right keywords, ad groups or ads. Your bidding strategy will mean nothing if you’re working off poor data or inconsistent content.
- Choose a strategy based on campaign goals. Just because one strategy sounds good, doesn’t mean it’s the best option for your campaign. Distinguish your top goal(s) to ensure the strategy aligns with it.
- Don’t be afraid to test bidding strategies. If you’re unsure or don’t have past results to work from, try different bidding strategies with A/B tests to see how each performance varies.
- Commit to better results. You’ve just launched a campaign and the bidding strategy is showing great results — don’t change it! If you’re reaching your goals, it’s best to stay on the current strategy’s track.
Building an Ad Campaign for Your Business
Google Ads don’t have to be a hassle! Familiarize yourself with each bidding strategy so you can get the most out of your ad campaigns while saving time, money and resources. What’s not to love about that?
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