Nowadays, there exist billions of websites on the internet. The competition in organic search has increased, and 75% of users never visit the second page of Google! So, paid ads are a smart way for marketers to increase leads ratio through increased traffic.

Marketers want to get a higher conversion rate through paid ads. However, before jumping into Google Ads bidding strategies, we need to understand how Google Ads auction works.

Three factors – higher cost-per-click (CPC) bid for the keyword, the quality score of the keyword and ad extension relevance to the ad as well as keywords, play a vital role in deciding how your ad will rank.

READ: Google removed 600 Android apps from Google Play for Disruptive Ads and Disallowed Interstitial policy

The primary focus of marketers should be on keeping a balance between conversion volume and cost per conversion. If you are on a tight budget, then keeping lowering a bid would affect your conversion rate. Contrarily, increasing bid strategy comes up with more conversions, but the more cost per conversion as well.

At this point, modern Google bidding strategies would keep you at bay from hot waters.

Manual Bidding

It is the basic bid strategy and includes manual work A-Z. Advertisers set their bids manually at the group level or keyword level. If you want to give the same bid to all the keywords, go for the group bid level. On the other hand, for the higher level of control, you could assign bids to keywords individually.

The problem with this strategy is it is time-consuming. Advertisers take all the control in their hands, so it requires them to keep monitoring results to change bidding costs. The second issue is, it is under-informed. Google shows fewer metrics in the performance report than automatic bidding.

If you want to save time and get access to detailed data points then manual bidding is not for you.

Enhanced Cost Per Click

It is similar to manual bidding, but you give control to Google to adjust the keyword bids. Enhanced CPC algorithms can increase or decrease the bid. Google’s primary focus remains on growing the click-through rate (CTR) and conversion rate (CVR). But, it comes with the expense of an increase in cost per click. ECPC increases the bid more often than lowering it.

Advertisers should keep an eye on CTR and CVR; these both should go up. An increase in these factors would increase CPC as well, but it must not affect your profit margin severely. The higher CPC cost means less ROI – return on investment. The best way to use this bidding method is to test it with a smaller campaign first.

Maximize conversions

It is what Google calls complete automation. Advertisers do not have to set individual keyword bids; instead, they only have to select the desired outcome of an advertisement.

Advertisers allocate daily budgets for this strategy, and Google consumes the whole budget. Take care not using a shared budget for this campaign; otherwise, it will spend whole!

You must enable conversion tracking as Google’s goal would be to maximize the number of conversions being tracked. If conversion tracking is not enabled, then the algorithm would not be able to identify the potential searchers who are more likely to convert.

Your goal was to maximize conversions, but what if daily budget is spent, and you end up with no conversions. It could go another way around, too, but still it is risky.

Instead of using it, the Target CPA or Target ROAS is safer choice to use. Let’s see how!

Target CPA (Cost Per Acquisition)

Using Target CPA, advertisers can set a target cost per conversion/acquisition, and then Google adjusts bids accordingly. The main focus of the algorithm remains on generating as many conversions as possible within the defined budget.

It will not work for individual keyword-level bids. This strategy is meant to be practiced at either the campaign or portfolio level.

Like maximize conversions approach mentioned above, it needs conversion tracking enabled to assist algorithms in making smart decisions. Along with it, you must have a reasonable amount of conversion data for providing Google at the start. Do not put axe on your own foot by setting CPA lower than your average CPA in the past. It would restrict algorithms in generating good results.

If you do not have at least 40-50 conversions data of the past 30 days, testing target CPA is not a wise move.

Target ROAS (return on ad spend)

With this, Google Adword adjusts bids in real-time against the target ROAS to maximize conversion value by predicting future conversion and conversion value. This strategy works at the ad group, campaign, or portfolio level.

According to Google, Google Ads predicts future conversions and associated values using your reported conversion values, which you report through conversion tracking. Google Ads will then set maximum cost-per-click (max. CPC) bids to maximize the conversion value while trying to achieve an average return on ad spend (ROAS) equal to your set target.

Take precautionary measures the same as CPA because these both need consistent data to work smartly.

Maximize Clicks

It is the same as Maximize conversions, but this is best for driving more traffic or getting more links. Conversions are not a target in this approach. Websites having excellent conversion rates already can use “maximize clicks” as it will drive more traffic and subscribers to them.

Advertisers must set maximum CPC for this strategy because getting clicks with far more expensive than average is not suitable for the business.

Target Impression Share

It is a relatively newer bid strategy than previous ones and focuses on reach as well as awareness. Advertisers whose concern is getting shares set a goal Impression Share percentage. Placement options on the absolute top of page, top of page, and anywhere on the page are available for bidding. Google would adjust the bid according to the position selected.

Setting a maximum CPC bid is crucial for this approach as well to not let Google go beyond profitability level. Advertisers must not pay more than the average amount for individual clicks. Keep monitoring CPCs and performance outcomes for maximum CPC adjustments.

Target Search Page Location

If a website’s concern is to get on the top of search results or to get a position on the first page, then “target search page location” is an answer. This strategy is all about gaining impressions by ranking at the top spot. However, sometimes the CPA or CPC costs too much to rank for these top positions, and the brand then looks for another strategy.

Target Outranking Share

It is a bidding war. Advertisers choose one domain to outrank it and also the percentage of queries for which they want to outrank. It is not the smart strategy because the cost per click could go high for both competitors, and the only winner would be Google.

Cost per thousand viewable impression

Viewability is the crucial factor of this strategy. Advertisers bid for impressions when their ad is shown in the viewable space on different sites. This strategy is useful if your goal is to expand your brand coverage.

Google’s focus remains on increasing ad viewability. Now, if you have hit a smaller group of people, then they would start feeling overwhelmed by seeing your ad repeatedly. So, choose the audience and ad frequency wisely. Keep an eye on placement reports to make sure your ad is being displayed on relevant sites.

Which Google Ads bidding strategy is the best?

The simple answer is “there is no one-size-fits-all solution.” Every strategy has its pros and cons. You have to choose one according to your brand’s goals and budget.

Generally, automated bidding strategies are best for all types of businesses. They save us time, but if you are bidding for the first time, then starting with manual bidding is not a bad option. It gives total control over bidding, but many performance opportunities are missed by doing so.

In enhanced CPC, greater control is given than manual bidding as algorithms keep adjusting bids according to long term average CPC parameters. They are meant to deliver more conversions to marketers. We recommend it because the risk of getting lower conversions minimize due to automatic adjustments.

Target CPA and target ROAS automatically tailor your keyword bids to a predetermined CPA target, but they are quite risky. Uncertainty remains in getting conversion at your desired volume. Like gambling, your money could go into vain or could get you fantastic outcomes. Additionally, you should only use it if you have a reasonable amount of past conversion data—at least 40 conversions.

If your concern is to maximize traffic, “target impression share” and “target search page location” strategies should be used.

Cost per thousand viewable impressions is best for a brand’s awareness as it is focused on viewability.

In the last, Target Outranking Share is a war against one of your competitors. We do not consider it a wise move. If your competitor would start doing the same, then the bidding price could go much higher.

Whatever strategy you choose, do not set, and forget. The bottom line is to keep monitoring the reports to optimize settings if necessary.

What do you think about the best Google Ads Bidding Strategy? Do share in comments!

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