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  • Writer's pictureJoe Karasin

Bidding Strategies For Google Ads

There are quite a few bidding strategies available within the Google Ads platform. Understanding what these are and how they work will give you a leg up when you’re running ads on the search or display networks.

A key component of any PPC campaign is the bidding strategy used. The right bid will help your ad display higher on the SERP. Using the wrong bid can see your ad display lower, or not at all. Bidding can seem like one of the most complex facets of PPC ads; below, we’ll go over the main bid types, and what they are designed to do.

All bids can be broken into two main categories: manual bidding and automated bidding. Within the automated bidding category, there are several options available, all with different goals in mind. Some of these strategies apply to the display network only, and some apply solely to video ads.

The best way to break these down will be to discuss each in detail. We will start with manual bidding, and then delve into the various automated options available.

Manual Bidding is exactly what it sounds like. You set a bid for each keyword, based on what you are willing to spend per click. For this article, we will use the real estate industry as the setting for our framework.

Let’s say you want to focus on obtaining leads for consumers looking to sell their home. Your keywords will be “seller centric”, such as +sell my +house, +best +realtor +near +me, or “get more money for my house”. (wondering why those terms look the way they do?)

You can set an overall maximum bid at the ad group level for all three keywords. Let’s say you start with a bid of $3.00. You let the ad run for a couple of days, and then look at the individual keywords within the ad group in the Google Ads Manager. You see that +sell my +house has a note next to it that says ‘below first page bid ($12.75). What Google is telling you here is that in order for your ad to appear on page one of the SERP, you should be bidding $12.75.

Now, because you bid $12.75, does this mean you will pay $12.75 for each individual click? No. You will only pay $.01 more than the highest bid in the auction for the click. So, let’s say 10 other agents are bidding for +sell my +house, and the highest bid is $5.00. All other factors being equal, you will pay $5.01 for this click.

Manual bidding requires more attention to your ads. You should check your keywords daily, as bids adjust regularly, and you can control your costs more effectively by adjusting your bids accordingly.

On the display network, a manual bid strategy like vCPM can be used to increase brand awareness. This is a good strategy if you are not necessarily focusing your ads on conversions and clicks, as you’ll be focusing on viewable impressions.

Now, let’s look at the various types of automated bidding. We’ll explain what each does, and where they can be used most beneficially.

Maximize Clicks is the first automated bidding strategy we will cover. Again, like manual bidding, this strategy is exactly what it says it is. This serves as a simplification of the manual bid, as all you need to do is set you average daily budget, and Google Ads will manage your bids and budget to gain the most clicks possible.

When attempting to drive traffic to your website or landing page, Maximize Clicks is an effective tool.

Let’s say, however, that you are not necessarily looking for traffic volume, but rather, you want highly motivated users to take specific actions on your page, such as fill out a form or use the “call us” button.

At this point, we want to look at bidding strategies that focus on conversions. There are several of these, each with a different way of optimizing your bids to increase the conversions you’re seeking.

Target CPA (cost per action) is a bidding strategy that enables you to maximize conversions at or below the cost you set. So, if your average commission on selling a home is $2,000, you’ll want to set a bid that reflects this. Be aware, however, that there are obviously other costs associated with having a consumer become a customer.

This is an effective strategy if you have a limited budget, as it enables your ad to be displayed at optimal times based on machine learning and historical data.

Target ROAS (return on ad spend) is a strategy that is best employed with seasoned campaigns that have conversion data. You should have a minimum of 15 conversions in the previous 30 day window for your search ads, and 20 conversions in the previous 45 day window for display campaigns.

This strategy gives the algorithm data it needs to determine an optimal bid based on the revenue from your conversions and also the amount you have previously spent to obtain a conversion. This strategy is best used in e-commerce situations where a transaction occurs online.

Maximize Conversion Value is a strategy similar to Target ROAS, but you determine what value you want to optimize. You can select options such as profit margin or sales revenue, and then the machine learning will spend your budget accordingly.

One feature that is extremely helpful with Maximize Conversion Value is the auction-time bidding option, which tailors your automated bid to the auction you are participating in. This can lead to saving money on your click and your conversion. The bid adjustments are helpful in situations where auctions might be less or more competitive due to outside factors (time of year, market shifts, etc.).

Maximize Conversions is a strategy that assists you in garnering more conversions, however, the cost saving features of the other strategies are not present. You do not need to target a specific CPA or any other targets. Your entire budget will be used.

This is ideal for real estate agents, as the revenue from a transaction can vary greatly, and no transactions are conducted on your website. Set a budget that you are comfortable spending and allow the system to find the most likely converters.

Enhanced Cost Per Click bidding is used in conjunction with manual bidding. Rather than having the machine learning feature adjust your bids for you, you will adjust your keyword bids manually.

ECPC will attempt to keep your cost below your bid, rather than focusing on the projected revenue or value you assign. This is more of a modification of manual bidding, but still qualifies as an automated bidding strategy.

Target Impression Share bidding is ideal for visibility and brand awareness. You can set the goal to the absolute top of page, top of page, or on page.

You can set a %, so if you set a goal of 75%, then Google Ads will adjust your bids to help your ad appear at the top of the page 75% of the total number of possible times. You can set a bid limit, which will cap your spend for any individual placement. It is important to set these appropriately, otherwise you will not reach your goal.

For display network or YouTube ads, you might want to try CPM (cost per milli), a strategy that charges based on the number of impressions you receive. This is a great strategy if you want your display ads shown across the internet, in apps, in Gmail, and other spots.

Costs for this strategy can be high, especially if you elect to use targeting expansion. But if you are attempting to gain clicks or conversions via display ads, this is ideal.

If you are investing in YouTube, then CPV bidding might be your best strategy. This automated option focuses on video interactions, including views, clicks, and other metrics. Expect to see more focus on YouTube ads as time goes on, as video is the preferred method of engagement for marketers.

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