The Complete Guide to Bidding Strategies for Google Ads

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Google Ads Hub • The Complete Guide to Bidding Strategies for Google Ads

The Complete Guide to Bidding Strategies for Google Ads

When Google Ads first rolled out, bidding was a massive part of a brand’s success.

The right bid meant you could be deeply competitive with high-ranking visibility consistently.

Today, however, that’s not the case. Bidding used to have much more importance in the past than it does today, especially since Google’s automated bidding strategies means that you don’t need to worry about setting the “right” bid— Google can do that for you.

Your account structure, ads, landing page, offer, and keyword selection are what will absolutely make or break your success on Google Ads today. That being said, it’s still important to understand what your bidding options are, how the different bidding strategies work, and how (and when!) to use them.

What is Smart Bidding?

You’ve really got two options when it comes to bidding with Google Ads: manual bidding or smart bidding.

Manual bidding allows you to determine what you want to pay per click. This is the reflected directly into the manual CPC bidding strategy.

Smart bidding, on the other hand, is made up of a series of automated-by-Google bid strategies that take advantage of machine learning. They focus on different objectives, like maximizing conversions or maximizing high value conversions.

Smart bidding allows you to tell Google what specific results you want to prioritize. They can set a bid for you automatically, or you can set target costs per action CPAs or results (like target ROAS).

Google Ads Bidding Strategies In-Depth Breakdown

Wondering what each Google Ads bidding strategy means for your business, and when to use them?

In this section, we’re going to take an up-close look at the eight different bidding strategies available to businesses now so you can know what each one offers.

1. Manual CPC

First up: Manual cost-per-click (CPC).

This bidding strategy allows you to throw smart bidding out the window if you so choose. You can set a manual limit for how much you’re willing to pay for each click.

While smart bidding is highly effective for brands that have an account history (meaning plenty of information that Google can use to optimize your accounts), manual CPC does have its own benefits.

It allows you to set clear and very direct parameters around how much you’re willing to spend for each click. This gives you the chance to be in control and make sure you aren’t spending too much per click, especially while Google learns more about how to optimize your ads and ad delivery.

When You Should Use It

We recommend using the manual CPC bidding strategy on any brand new Google Ads account.

This gives you time to control how much you’re willing to spend per action to ensure profitability while Google gets the data it needs to properly optimize your campaigns moving forward.

At the end of the day, automated bidding strategies simply don’t work well without significant amounts of data in the account.

Start here for a minimum of two weeks or up to a month, and then you can look at testing automated bidding strategies. Once your results start leveling out a bit more, that’s a good sign.

2. Enhanced Cost per Click (ECPC)

The enhanced cost per click (ECPC) bidding strategy is a little like an optimization upgrade of your manual bids.

This bidding strategy works by automatically adjusting your manual bids for clicks that seem more likely to lead to a sale (or other conversion type!) on your website.

These are different from target CPAs or ROAS Smart Bidding features, which set bids based on the cost of the specific targets you’ve set. The ECPC bidding strategy will work to keep your average CPC below the max that you set, even including bid adjustments.

You must have conversion tracking set up in order to use this bidding strategy, but you can use it on Search, Shopping, and Hotel campaigns.

When You Should Use It

When you’re ready to start testing Google’s Smart Bidding but you don’t want to jump straight into their full line of automation-focused bidding strategies, this is a good baby step.

You still have full manual control over your max CPC bid limits, but you’re still giving Google the freedom and flexibility to increase your bids on searches they believe are most likely to convert, all while maintaining your average CPC.

This means that you will, on average, not pay more than the max CPC, but a few high value opportunities may cost a bit more. If you set your max CPC bid cap at $2, they might pay $2.20 for a high value click but counteract it with a $1.70 click after.

As a quick note: Here at GrowMyAds, we rarely use ECPC as of 2022. When you’re ready to start testing Smart Bidding, we recommend jumping straight in and starting with the Maximize Conversions or Maximize Conversion Value bidding strategies with limits on either your cost-per-action (CPA) or return-on-ad-spend (ROAS) goals.

3. Maximize Conversions with no tCPA Set

One of Google’s bidding objectives is to “Maximize Conversions.” The focus here is to maximize the quantity of potential conversions; they’ll show your ad to as many people as possible who are likely to convert at any level.

You can choose to simply select the “Maximize Conversions” bidding strategy without setting a target cost per action (TCPA).

This gives Google free reign to find you as many placements as possible where users are likely to convert as possible, without restrictions on cost.

When You Should Use It

This is a good bidding strategy to use when your campaign is already converting underneath your ideal CPA goal, and you’re not maxing out your full campaign budget on a daily basis.

If, for example, the CPA goal is $150 but we’re only spending $100 on the campaign daily, that’s a good sign that this may be a solid bidding strategy.

The other scenario we find ourselves using Max Conversions bid strategy is on brand new campaigns within an account that has consistent conversion data. Setting a new campaign out of the gate to Max Conversions can help get lift early and jump start the learning phase.

We only recommend using this on a new campaign that you are confident has a high chance of working and you just want to get action quicker than starting with Manual then switching to a smart bid strategy after data collection.

4. Maximize Conversions with tCPA Goal Set

This bidding strategy is a branch off of the strategy above, but with more instructions given to Google.

Recap: Your goal is maximizing the specific type of conversions you want (which can be sales, but also might be something like booked appointments or lead sign-ups), so Google is still going to show your ad to users most likely to

When You Should Use It

You have a campaign that has a consistent volume of conversions and is hitting or close to your CPA goal.

We use to recommend having at least 30-50 conversions in the last 30 days before switching to Max Conversions with tCPA goal, but now as long as the campaign has consistency even if it is less than 30-50 conversions per month, then we have had success switching over to Max Conversions with tCPA goal.

Be careful when setting your tCPA goal – you can’t force Google’s automation to magically hit your goal if historically the campaign has not been performing.

For example – if your CPA goal is $50 but the campaign over the last 30 day averages a CPA of $100 – you can’t just set a CPA goal to $50 and expect Google to hit that. The most likely outcome of setting a CPA goal that is significantly under the campaign’s historical average is the campaign will just slowly die out.

5. Maximize Conversion Value with no tROAS goal Set

Just as you can focus on quantity of conversions with the above bidding strategies, you can also prioritize maximizing the value of your conversions.

Not all conversions are created equal, after all. The ability to pay more for clicks that are likely to drive a $200 sale instead of a $100 sale, for example, would be appealing to any brand.

This particular bidding strategy seeks to maximize conversion value with no manual restrictions added by the advertiser.

When You Should Use It

You should only ever use the Maximize Conversion Value once your campaign is already converting well under your return on ad spend (ROAS) goal, and you’re not hitting your full campaign budget.

You can use this to automate and optimize what’s already working.

This particular bidding strategy works particularly well with Performance Max and Shopping Campaigns.

6. Maximize Conversion Value with tROAS Goal Set

This is an extension of the bidding strategy above. You’re still prioritizing maximizing conversions of good value, only this allows you to set a target ROAS through Google manually.

Google has plenty of ROAS-tracking features; they can see which users are purchasing higher-priced items through their Shopping platform, for example, which can help them determine which users are looking for high value items.

If you want to prioritize clicks that will, on average, have a target ROAS of 2x your ad spend, for example, you can do so with this bidding strategy. The bidding strategy won’t guarantee this, but it’s a good goal post.

When You Should Use It

Use this bidding strategy when you have a revenue-focused campaign— which will typically be a Shopping or Performance Max campaign— that is yielding a consistent volume of conversions and is either hitting or close to hitting your ROAS goal.

In the past, we recommended having at least 30-50 conversions over the past 30-day period before switching to Max Conversion Value with tROAS goal, but now as long as the campaign has consistency (even if it is less than 30-50 conversions per month!), then we have had success switching over to Max Conversion Value with tROAS goal.

Be careful when setting your tROAS goal. You can’t force Google’s automation to magically hit that goal on a campaign that wasn’t already performing.

7. Target Impression Share

The Target Impression Share bidding strategy is completely different from what we’ve looked at so far.

Instead of prioritizing a specific action, like getting as many clicks or conversions as possible, the priority here is to get as much of the impression share for your target keywords as possible.

It also tells Google that you’re willing to pay for a top ad spot, so you’re showing up in a solid ranking position.

For brands who want to aggressively expand their reach and build brand name recognition, this might be something that catches their attention.

When You Should Use It

The Target Impression Share bidding strategy is typically going to be used for Brand campaigns.

You want to always be at the top of the search results (or at least as often as possible). If you’re willing to pay top dollar for a top ad spot regardless of the ROI. Think of this one a little bit like an ego play.

8. Maximize Clicks

This bidding strategy is simple and to the point.

Want to get as many clicks as you can and let the chips fall where they may? This is the strategy for you.

The entire priority is driving clicks at the highest volume you can.

When You Should Use It

While getting plenty of clicks sounds great at a first thought, all the other bidding strategies do a much better job helping you achieve very real and specific goals more effectively.

We typically recommend avoiding this bid strategy entirely. The only real exception is if you don’t have deeply about profitability and have different reasons for advertising on specific campaigns.

An example of this might be a big spender launching a major campaign who wants to generate a lot of data quickly… even at a potential loss.

Bid Adjustments

A bid adjustment is an increase or decrease in percentage of your bids based on different factors.

You can, for example, bid more on clicks that come from smartphone users than desktop because they convert more often for your business.

You can set bid adjustments based on location, audience targeting criteria, times of day the ad is being shown, and where the ad is being displayed in Google.

There’s also the option to bid more based on campaign performance, including different high-performing keywords.

This can help you show your ad to users that you most want to prioritize.

Keep in mind that some types of campaigns and bidding strategies won’t be impacted by bid adjustments, even if you’re able to set them. You can see a thorough breakdown of this here:

Image source: Optmyzer

Final Thoughts

Even though your bidding strategy (and the bid itself) isn’t going to completely make or break your Google Ads campaigns like it would have ten years ago, choosing the right bidding strategy can still absolutely make a big impact on your success.

Knowing which bidding strategies to choose— and at what point of campaign management to choose them— will be key. And remember that you can always change things up if your currently bidding strategy isn’t working for you.

Google Ads has a lot of moving pieces with plenty of decisions to make. We can help you sort through them all. Learn more about how we can help here.