Google Ads Bidding Strategies: What are they and When to use them

Google Ads Bidding Strategies: What are they and how to use them 1
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Google Ads offers a number of different bidding strategies, which are each tailored to different types of campaigns, dependant on your goals. Here we will be discussing exactly what bidding strategies are, the different types and when to use them within your PPC campaigns.

Bidding strategies are essentially how you choose to set bids for your ads. There are so many different variations you can choose from. Most people will choose an automated bid strategy over manual because well, nobody wants to continuously be manually changing their bids when there are so many great automated strategies to choose from. It is however important to choose the RIGHT bidding strategy for your campaign otherwise your results will suffer.

What Bidding Strategies can I Choose From?

Currently, Google Ads offers 10 different types of bidding strategies:

  1. Target CPA
  2. Target ROAS
  3. Maximise Conversions
  4. Enhanced Cost Per Click
  5. Maximise Clicks
  6. Manual CPC Bidding
  7. Target Search Page Location
  8. Target Outranking Share
  9. CPM Bidding
  10. vCPM Bidding
What are they and when to use?

Target CPA

Target CPA is a smart bidding method where Google will set your bids to help get as many conversions as possible at your target Cost-Per-Aquitision (CPA). You should only use this bidding strategy if you have a large history of conversion data. This is because Google will use historical information about your campaign and will evaluate the contextual signals present at auction-time. This enables Google to find an optimal CPC bid for your ad each time it is eligible to appear. Sometimes your conversions will cost more than what your target CPA is set to and sometimes it will cost less. However overall Google will try to keep your CPA as close to what you have set as possible. If your campaign is new, or you don’t have a large amount of recent conversion data then it is best to stay away from target CPA. When to use: If you have a large amount of conversion history and want to focus on getting as many conversions as possible for a certain CPA.

Target ROAS

Before we discuss this bidding strategy we’ll run through what ROAS or Return On Ad Spend actually means. According to Big Commerce, ROAS is a metric that measures the efficacy of a digital advertising campaign. It helps online businesses evaluate which methods are working and how they can improve future advertising efforts. So now you know what it is, lets discuss the bidding strategy. This type of bidding lets you bid based on a target return on ad spend. You input your target ROAS and Google will automatically set your bids at auction time. This method again uses historical data and you must have at least 20 conversions within the last 45 days for this bidding strategy to work. However, Google suggests that for maximum machine learning and optimal results you should have 50 conversions over the past 30 days. Some of your conversions will have a higher ROAS than your target and others less. However, Google will aim to set your bids to reach your target ROAS most of the time. This strategy will adjust bids based on real-time signals such as device, browser, location and time of day. The great thing about this bidding strategy is that you can set it to both campaign level and ad group level. If you are wanting to use a specific target ROAS for an ad group, just make sure you are using a standard campaign strategy. When to use: Use target ROAS when you have a large set of historical data and want to focus on conversion value.

Maximise Conversions

This one is pretty self explanatory. Googles smart bidding will try to maximise conversions with the available daily budget given. There are a few things you should be aware of if you are thinking maximise conversions is the bidding strategy for you. Firstly you need to make sure that the campaign daily budget is not part of a shared budget. A campaign that uses maximise conversions will need its own budget. You will also want to check to see if you are already spending your full daily budget. Google will try to fully spend your daily budget everyday so if this is not currently happening then spend may increase drastically. When to use: Use maximise conversions when you want to get the most conversions with your daily budget, without a target CPA or ROAS.

Enhanced Cost Per Click (ECPC)

Enhanced CPC is used in conjunction with manual bidding to get more conversions. ECPC will automatically adjust your manual bids for clicks that seem more likely to lead to a conversion. When you enter an auction Google will look for ad auctions that are more likely to lead to a conversion and will adjust your bid to bid more aggressively. Vice versa, if a click seems less likely to convert then Google will lower your bid. Although ECPC will sometimes bid higher than your max. CPC, Google will always aim to keep your average CPC lower than the max. CPC. When to use: Use ECPC when you want to maximise conversions, whilst still having the control of manual bidding.

Maximise Clicks

Not to be confused with maximise conversions, maximise clicks is an automated bidding strategy that will set your bids to help get as many clicks possible with your given daily budget. It is a good idea to enter a max. CPC when using maximise clicks, to ensure that you are not paying drastically over what you want to. When to use: Maximise clicks should be used if your focus is generating as much traffic as possible to your website.

Manual CPC

Manual CPC is for those of you who like to have full control over your campaigns. I get that letting Google’s algorithm take control can be daunting but I’d always suggest giving it a test as it will save you a tonne of time in the long run. If you do however have time to be making bid adjustments then manual CPC is great because it gives you full control on what you will pay for a click. You can also set your max. CPC via ad group or at keyword level. With manual CPC you can also set bid adjustments based on locations, demographics and devices. This is not possible for other smart bidding strategies such as target ROAS, as these types of strategies uses real-time bidding so your existing bid-adjustments aren’t taken into consideration. Competition is forever changing in the Google Ads auction, so it is important to make sure you regularly analyse your max. CPC bids. When to use: Use manual CPC of you have time to accurately calculate what your max. CPC should be for each ad group or keyword. Also use if you like the comfort of knowing you have full control over your campaigns.

Target Search Page Location Targeting

Target search page location is a type of portfolio bid strategy that automates bidding across multiple campaigns to show your ad on the top of the page or on the first page of Google search results. Google’s algorithm will automatically adjust your bids to appear either on the top of the first page of results or on the first page. It is important to note that this bidding strategy can only be used on the Search Network. Google use real-time bidding for this strategy, which means your bids can be adjusted multiple times a day to enable your ads are being placed in the position you want to be shown. They also like to make it clear that it is not guaranteed to display your ad in the desired position. This bidding strategy will help you get the position, however ultimately the results come from the auction which is influenced by competition and quality score. When to use: Target search page location targeting is best used if you would like to focus on impressions and view-ability.

Target Outranking Share

This is great if you have a certain competitor you would like to beat. This bidding strategy will help your ads outrank ads from another domain. This bidding strategy will only work on the Search Network and you can only choose one domain you would like to outrank. It is important to note that this strategy will not improve your overall adrank, just your adrank against one other domain. It is suggested that if you set up target outranking share as your strategy you will need to wait 7 days to start seeing accurate results. This is a bidding strategy that I have always been cautious of because what happens if your competitor is also using the same strategy? How does Google decide who outranks who? When to use: Use target outranking share if you have a competitor you are looking to beat.

Cost-Per-Thousand Impressions (CPM)

Cost per Thousand Impressions, otherwise known as CPM, is bidding solely based on impressions. You pay per 1000 impressions. This bidding strategy can only be used on the Display Network and YouTube campaigns. When to use: Use this strategy if you are focused on brand awareness and getting more views.

Cost-Per-Thousand Viewable Impressions (vCPM)

With vCPM bidding, you bid for your ad based on how often it appears in a viewable position on the Google Display Network. You set the max. amount you want to pay for viewable ads, whether they’re clicked on or not. This option is better than CPM bidding because you only pay for actual viewable impressions. I personally don’t like CPM bidding because if your ad generates an impression below the fold then the prospect might not actually see you ad. Sounds like a total waste of money right? I’d stick to vCPM if I were you. When to use: Use this strategy if you are focused on brand awareness and getting more views. So in conclusion you can condense bidding strategies into 3 main goal areas: Goal = Conversions
  • Target CPA Target ROAS
  • Maximise Conversions
  • Enhanced CPC
Goal = Clicks
  • Maximise Clicks
  • Manual CPC
Goal = Impressions
  • Target Search Page Location
  • Target Outranking Share
  • Cost-Per-Thousand Impressions (CPM)
  • Cost-per-thousand viewable impressions (vCPM)
I hope you now understand that although when starting a campaign, choosing your bidding strategy can be complicated, it is so important you get it right. If you’d like to speak to the experts on this subject, feel free to contact us.

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