Google Ads Bidding Strategies: A Comprehensive Guide for Maximizing ROI

In the world of online advertising, success often hinges on selecting the right strategy to maximize your return on investment (ROI) and achieve your specific goals. With that in mind, it’s important for brands to choose the right Google ads bidding strategy that aligns with their goals (and dictates how your ad dollars are being spent). This article aims to help you make informed decisions when choosing the most suitable Google ads bidding strategy for your campaigns. This article will provide an overview of the bidding basics, explore the factors to consider when selecting a strategy, and discuss the importance of aligning your chosen approach with your campaign goals to help you become a more informed advertiser.

What does choosing a bidding strategy mean? 

Bidding in Google Ads is the process of determining how much you are willing to pay for each click, impression, or conversion generated by your ads. Your chosen bidding strategy plays a critical role in your ad campaign’s overall performance, directly impacting your ad placements, visibility, and ultimately, your results. 

Bidding strategies in Google Ads serve various purposes, from maximizing visibility and ad impressions to driving specific actions such as clicks, conversions, or sales. The right bidding strategy can help you allocate your budget effectively, reach your target audience, and achieve your marketing objectives.

What is bidding vs budget in Google Ads?

Bidding and budget are two important factors to consider when running Google Ads campaigns. Bidding refers to the amount of money you are willing to pay for a click on one of your ads, while budget refers to the total amount of money you are willing to spend on your ads over a certain period of time, such as a day or a month (also known as the ad spend for that particular campaign).

In Google Ads, you can set a maximum bid for each keyword or ad group, which determines how much you are willing to pay for a click. The actual amount you pay for each click will depend on the competition for that keyword or ad group and the quality of your ad and landing page. Your budget, on the other hand, is the total amount you are willing to spend on your ads over a certain period of time. You can set a daily budget or a monthly budget, depending on your needs and goals.

How do I set a bidding strategy? 

A screenshot showcasing the Google Ads campaign settings interface, highlighting the section where users can easily change their bidding strategy to optimize campaign performance.

Campaign > Settings > Bidding > Change bid strategy 

What are the different bidding strategies? 

Manual Bidding Strategies 

A manual bidding strategy in Google Ads refers to the process of manually setting the maximum amount you are willing to pay for each click on your ad (cost-per-click, or CPC) instead of relying on Google’s automated bidding systems. By using manual bidding, you can have more direct control over your advertising budget and the individual bids for each keyword or ad group in your campaign.

Manual CPC: 

In google ads, the only true manual bidding strategy is Manual CPC. The bidding strategy allows you to set the maximum CPC for each keyword or ad group. You’ll have full control over your bids, so you know exactly what you’re spending on certain keywords, but it does require constant monitoring. You’re going to want to increase bids on keywords that have been performing well, and decrease bids for those that haven’t been performing well. 

An image comparing the pros and cons list of Manual CPC bidding strategy.

Automated Bidding Strategies 

Automated bidding strategies automatically adjust your bids based on your campaign objectives. 

To successfully transition from a manual bidding strategy to an automated bidding strategy, your campaign needs at least 30 conversions (I aim for 50).  All automated bidding strategies will perform more efficiently with tight conversion tracking in place. The algorithm needs time and data to learn about your customer. After all, how will Google optimize towards conversions if it doesn’t know who usually converts, and at what price point? 

Enhanced CPC (eCPC):

The Enhanced CPC bidding strategy is actually a semi-automated bidding strategy, as it’s a combination of manual and automated. You’re still able to set maximum CPC bids, but eCPC will adjust your manual bids to help get more conversions while maintaining your set CPC limits. 

An image comparing the pros and cons list of Enhanced CPC bidding strategy.

Maximize Conversions:

With the Maximize Conversions bidding strategy, Google will automatically set your bids to get as many conversions as possible within your budget. The only control you’ll have is over your daily budget, and you might see CPCs rise as Google bids more aggressively for conversions. 

An image comparing the pros and cons list of Maximize Conversions bidding strategy.

Maximize Clicks:

Similarly to Maximize Conversions, Maximize Clicks automatically sets your bids to get as many clicks as possible within your budget. It’s easy to use, but your CPCs can rise to spend your entire daily budgets, so make sure to set maximum CPCs!

Maximize Conversion Value:

Maximize Conversion Value automatically sets your bids to maximize the total revenue from your conversions within your budget. It’ll choose which auctions are more likely to return a higher conversion value, and it will bid on those aggressively. 

An image comparing the pros and cons list of Maximize Conversion Value bidding strategy.

Target Impression Share:

Target Impression Share is a bidding strategy in Google Ads that aims to show your ad on a certain percentage of eligible impressions based on your specified target share. It helps increase your ad’s visibility and achieve a desired ad placement (such as the top of the search results page) by automatically adjusting your bids. For example, if you begin to notice that your competitors are dominating the top ad placements for specific high-value keywords, you can use Target Impression Share for your ads to appear more frequently in higher positions. This is most popular amongst branded campaigns. 

An image comparing the pros and cons list of Target Impression Share bidding strategy.

Smart Bidding Strategies 

Smart bidding strategies optimize your bids by using auction-time information to make real-time bid adjustments. It optimizes for conversion or conversion value in each and every auction. For smart bidding strategies, aim for at least 50 conversions in the last 30 days

Target CPA: 

When you set your bidding strategy to maximize conversions, you can set a target CPA (cost-per-acquisition). When you set a target CPA, Google will adjust bids to achieve that goal, while still giving you the most amount of conversions. 

An image comparing the pros and cons list of Target CPA bidding strategy.

Target ROAS:

You can set a target ROAS when you use the Maximize Conversion Value bidding strategy. You can tell Google to try to hit your ROAS goals, but if you set a goal too high, it won’t spend your budget.

An image comparing the pros and cons list of Target ROAS bidding strategy.

What is the difference between a “smart” and an “automated” bidding strategy? 

The terms smart bidding and automated bidding are often used to speak about the same thing (anything that isn’t Manual CPC), but that’s not entirely accurate. Automated bidding strategies refer to bidding strategies that automatically adjust your bids based on specific campaign objectives, without requiring manual intervention. These strategies use your campaign’s historical data to optimize bids for outcomes such as maximizing clicks, conversions, or conversion value. 

Smart bidding strategies, on the other hand, are bidding strategies that optimize your bids by using auction-time information to make real-time bid adjustments. It optimizes for conversion or conversion value in each and every auction. So, while all smart bidding strategies fall under the category of automated bidding strategies, not all automated bidding strategies are smart. 

Choosing the right bidding strategy (best practices)

When choosing a bidding strategy, it’s essential to consider several factors, such as your campaign goals, budget, resources, and industry competition. Each bidding strategy comes with its own set of advantages and drawbacks, making it crucial to weigh your options carefully before committing to a particular approach.

For all new campaigns, Manual CPC is the way to go. This ensures that you gather enough data for the algorithm to learn about your audience and customers, and will make any automated bidding strategy work more efficiently down the road. Once your campaign has at least 30 conversions (I like to wait until 50), then you can move into automated bidding. If you decide that you want to switch to maximize conversions, let the campaign gather some data on that automated strategy, then set a target CPA. This way you’ll be able to optimize your CPA, rather than setting a CPA too low and potentially getting Google not to spend your budget.

Which bidding strategy should I use? 

Scenario 1: I’m a new account, just setting up a campaign

Initial bidding strategy: Manual CPC

For a new campaign with no historical data, you can start with Manual CPC as your bidding strategy. This approach allows you to set the maximum cost-per-click (CPC) for each keyword or ad group based on your initial understanding of their importance or performance. It’ll give you full control over your bids, and it’ll also allow Google to gather enough data on your campaign to work with an automated bidding strategy. Once you have around 30 conversions (try to aim for 50), then you can switch to an automated bidding strategy. 

Scenario 2: I’m just setting up my pmax campaign, so I can’t use manual CPC 

Initial bidding strategy: Maximize Conversions

In a situation where you can’t use manual CPC, such as when setting up a performance max campaign, you can start with the Maximize Conversions bidding strategy. This automated approach optimizes your bids to obtain the highest number of conversions within your budget, without the need for manual bid adjustments. Maximize Conversions is a good initial strategy when you want to focus on driving conversions and don’t have specific cost-per-action targets. Once your campaign has accumulated enough historical conversion data, you can either switch to Maximize Conversion Value or implement a Target CPA. 

Scenario 3: After gathering data, I set a tROAS, but now my campaign has stopped spending

This means that you set a target ROAS that’s way too high. If you’re just switching from Manual CPC, then you may want to start Maximize Conversion Value without any target goal. Then, once you understand the ROAS that your campaign hover on, you can pick a ROAS slightly over the average. If you set a tROAS (or tCPA) that Google doesn’t think it can achieve, it won’t spend. 

That’s a wrap

That’s an overview of every bidding strategy that you can use on your search campaigns, including best practices and a walk-through of a couple of scenarios that you might have seen (or might see in the future). Although there’s still Viewable CPM and Cost Per View, those bidding strategies mainly apply for YouTube and Display campaigns. I’ll make another article on those separately. 

One response to “Google Ads Bidding Strategies: A Comprehensive Guide for Maximizing ROI”

%d bloggers like this: