Google Search operates like an auction house on super speed.
Every minute, it sells millions of items to competing bidders.
Pundits, businesses, and brands outbid each other for the best deals at the auction house.
But, instead of selling fine art, collectibles, and jewelry, the Google auction house sells something different.
Google sells a position in the search rankings for every keyword searched on its platforms.
Simply put, Google sells you the opportunity to gain new customers.
Now, you can’t just walk into the auction house and bid randomly on unrelated queries for obvious reasons.
Your budget will evaporate, your competitors will win all the profitable auctions, and your sales won’t ever increase.
If you want to succeed, your business needs an efficient Google Ads Bidding Strategy.
But don’t worry, because my entire team and I have spent countless hours and personal ad budget figuring out these campaign bidding strategies and understanding the ins and outs of them.
We will teach you how to pick your fights and how to create a ruthless but efficient bidding system. Here’s what we’re going to discuss:
- What is Google Ad Bidding?
- How does Google Ads Bidding work?
- Main Factors to Winning a Google Ad Auction
- Bid Amount: Manual vs. Smart vs. Automated Bidding
- How to Improve Ad Quality Score
- How to Add Relevant Ad Extensions
- The 10 Best Bidding Strategies for your Google Ads Campaign
As you read this article, you will learn how to choose efficient Google ad bidding strategies.
And trust me when I say these strategies will leave you poised to capitalize on the millions of Google searches happening every minute while allowing you to dominate the auction house.
What is Google Ad Bidding?
Simply put, a bid is the amount of money you are prepared to spend for a click on a specific keyword. These bids will determine where your ad appears in search results.
Each time a search is made, the Google algorithm ranks results based on how much people are willing to pay for that keyword. Other ranking factors include quality score and how effectively the ad content and message relate to the term being searched.
Inside of your Google Ads account, you control the bidding. However, with an endless number of options, it’s hard to know where to start, or what queries your business should be bidding on.
With a clear Google ad bidding strategy, you can streamline your process, improve your ad campaigns, and increase your sales. Keep reading and we will guide you through the best bidding strategies that your business can use.
How does Google Ads Bidding work?
Google runs an auction every time there is open ad space on a search result and every single millisecond, there’s a gazillion searches that happen.
In fact, over 2 trillion auctions are run on their platform each year… Yes, you read that right. TWO TRILLION!
The advertisements that Google shows for that specific search are decided by the auction. You enter the auction with your bid.
Sounds simple, right?
It can be, but there are a lot of factors to take into consideration before you can become a master of Google ad auctions.
As we said above, a bid is the amount of money you are prepared to pay to win a keyword auction.
But, just because you are willing to spend the most per bid does not mean that you will automatically win the auction and get the top result. Google needs to validate that the content or webpage the ad is promoting is of high quality and related to the target keyword.
For example, imagine two businesses that are running similar ads and they are bidding the same amount on the same target keyword. If all other factors are equal, the business with the higher ad quality score will be ranked higher, winning the auction.
Main Factors to Winning a Google Ad Auction
- Bid Amount
- Ad Quality Score
- Relevant Ad Extensions
Lets break down all of the juicy information that revolves around these three major metrics.
Bid Amount: Manual vs. Smart vs. Automated Bidding
How do you know what you should spend on a bid for your target keywords?
Should you try to do it all yourself, manually setting the bid amounts and hoping it works? Or should you rather let the Google ads algorithm take care of it all with automated and smart bidding tactics?
There are several ways for you to win a Google ads bidding war and bring paying customers to your site. Let’s look at the three main bidding strategies you can use in your Google ads campaign.
- Manual Bidding
- Smart Bidding
- Automated Bidding
1. Manual Bidding
As the name suggests, manual bidding involves you manually modifying your bids at the keyword or ad group level.
In other words, you’re telling Google the highest price you’re willing to pay to rank for your keywords in an auction.
In order to optimize your Google AdWords campaigns, you can go into your account and alter your ad bids. Keep in mind that altering your bids will not change the budget you’ve set for your overall ad budget.
Google will provide you with a recommended bid amount and a high-to-low range of what your competitors are bidding for a certain keyword. But, if you use manual bidding, the final decision is up to you.
2. Automated Bidding
If you choose to use an automated bidding strategy, Google will optimize your bids to achieve your pre-set goals. The automated bids that Google selects will be based on the spending limit you’ve established for your campaign.
Cost per action, target ROAS, maximize clicks, maximize conversions, maximize conversion value, and target impression share are examples of automated bid strategies.
If you are new to Google ads, we recommend using an automatic bid strategy (maximize clicks) to help remove some of the uncertainty early on.
Once you have a better grasp of bidding strategies, manually bidding could provide more profitable opportunities.
Three ways that automated bidding can improve efficiency:
- Saves time, energy, and marketing dollars.
- Incorporates a wide range of signals to assess user intent.
- Uses machine learning to set an appropriate bid for each and every auction.
3. Smart Bidding
Smart bidding is a type of automatic bidding and is often referred to as “auction-time bidding.”
This method takes advantage of machine learning to optimize your campaigns for conversions or conversion value.
Some examples of smart bidding strategies that you can try are: Target ROAS, Target CPA, Maximize conversions, and Maximize conversion value.
Smart bid strategies employ machine learning to automatically optimize your bids based on predetermined campaign goals.
Okay, now that you know the different types of bidding you can use in Google Ads Campaigns, let’s look at how you can improve your Ad Quality Score and start ensuring you win profitable auctions.
How Can You Improve Your Ad Quality Score?
As we mentioned above, the amount you bid is not the only factor in winning an auction. One of the key factors that Google uses to determine whether an ad is shown is the Quality Score.
Google wants to answer search queries with the most relevant, high-quality content available. Google’s ranking algorithms measure this with the Ad Quality score.
Your quality score (based on a score from 1 – 10) is measured by three different elements:
- Ad Relevance
- Page experience
- Expected CTR (click-thru-rate)
1. Ad relevance
Your ad relevance score is a measurement of how closely your keyword matches the message in your ads.
For example, if we were to bid on the term ‘how to improve ad quality score’ at Yoru Marketing but our ad said “The 7 Best Google Ads Bidding Strategies,” that would give us a low ad relevance score as they are not directly related.
An ad titled “Tactics to Improve Google Ad Quality Score” would have much higher relevance.
2. Page experience
To maximize your page experience score, you want the messaging on your landing page to align with the original ad that the user clicked on and the term that they initially searched for.
So, if we ran an ad for ‘how to improve ad quality score’ at Yoru, but the landing page was full of content about coding a website, this would be a poor landing page experience, and the user would bounce from the page quickly.
3. Expected click-through rate
The expected click-through rate (CTR) calculates the likelihood that your ad will be clicked on when it appears for a specific keyword. This metric is based on the historical performance of your ads.
Keep in mind that this figure is not the same as your actual click-through rate (CTR); it just provides an estimate.
How to Add Relevant Ad Extensions
By now you should have a good understanding of the types of ads and tips to improve ad quality scores. The final topic we need to cover before getting into the bidding strategies is Ad Extensions.
Google Ads extensions provide more channels and routes for your potential customers to go down when they see your ad. These can be added from within your Google ads campaign manager.
Ad extensions take up more space on a search result. The bigger and more relevant your ad, the higher the chance you have of getting clicks and conversions.
While extensions directly impact search campaigns, shopping listings also have their own form of additions. These can be done via the Google Merchant Center.
Ad extensions not only benefit your visitors by giving them more information, but they also benefit you. Whether that’s calling you directly from the ad, going to a specific URL on your website, downloading your mobile app, or finding your address.
The Benefits of Ad Extensions:
- Boost your quality rating (indirectly).
- Boost your ad ranking
- It may lower your average CPC (cost-per-click).
- Increase Click-thru-rate (CTR)
Now, you know all the main factors it takes to win an auction on Google.
To recap, you want to choose a bidding type (manual, automated, or smart), you want a high Ad Quality Score, and you want to add relevant extensions to your ads. All of these, combined with the ultimate bidding strategy, will help you dominate the auction house.
To start winning more Google ad campaigns, all you need to do now is to choose a Google Ads bidding strategy.
Continue reading below as we cover our 10 favorite bidding strategies for businesses to use.
11 Bidding Strategies for Your Google Ads Campaign
When setting up your Google Ads campaigns, there are a total of 11 potential bidding strategies that you can select. There are pros and cons to using each of these strategies, so it pays to know how each one works.
By understanding the 11 Google Ads bidding strategies, your business will be one step closer to achieving its advertising goals.
- Target CPA
- Target ROAS
- Maximize Clicks
- Maximize Conversions
- Maximize Conversion Value
- Target Impression Share
- Manual cost-per-click (CPC)
- Enhanced cost-per-click (ECPC)
- Viewable CPM (cost per 1,000 impressions)
- Target CPM (cost per 1,000 impressions)
- Maximum CPM (cost-per-view)
Google Ads Bidding Strategy #1: Target CPA
“Cost-per-acquisition” is the amount you can afford to spend obtaining one customer.
In other words, CPA represents the cost of moving a single consumer through your sales funnel, from initial contact to final conversion.
If you want to maximize for conversions, you can utilize the target CPA bidding method. If increasing conversions is your main objective for the campaign, choosing Target CPA bidding will concentrate on attempting to increase user conversions at a particular acquisition cost.
By using this technique, Google Ads will automatically set your campaign bids based on your CPA. But, if you are unsure of what your acquisition costs are, target CPA bidding can be challenging.
If your primary advertising goal is to increase conversions (signups, sales, or mobile app downloads), target CPA bidding can help you achieve this.
Google Ads Bidding Strategy #2. Target ROAS
Alright, I’m going to need you to grab your calculators out for this one. Target ROAS requires a little bit of math…
When you select the Target ROAS bidding strategy, Google will tailor your bids to maximize conversion value based on your ad spend. If you have a certain return on investment that you want to hit in your Google advertising, Target ROAS is the strategy for you.
Got your calculator ready? Good. Let’s look at a quick example:
Let’s say you are running an ad campaign and you want to earn $15 for every $3 you spend.
You will need to plug these numbers into the formula below to find your target ROAS.
(Sales ÷ ad spend) x 100% = Target ROAS (tROAS)
For our example above, it would be:
($15 ÷ $3) x 100% = 500% tROAS
That was easy, wasn’t it? Now you can give it a go for one of your campaigns.
But keep in mind that just because you set a tROAS of 500% doesn’t mean Google’s algorithm will magically start hitting this number from scratch.
In fact, I recommend that you begin a smart shopping campaign without one checked to boost start the results before adding any restrictions.
Benefits of Using Target ROAS as your Bidding Strategy:
- Your ads will be placed in front of searches with higher buying intent.
- This is perfect for eCommerce stores with multiple products, as you can identify the ideal balance between high-profit margin products and high volume products.
- Using ROAS can sometimes reduce ad spend as Google is trying to get you more revenue for less ad spend.
Google Ads Bidding Strategy #3. Maximize Clicks
Using this strategy, Google will attempt to drive as many ad clicks as possible within your budget. It is an automatic bidding strategy based on your maximum daily budget.
Although most eCommerce store owners view maximize clicks as the “spray and pray” method to generating quick traffic fast, it has worked for me time and time again. In fact, for any new account we take on, I launch a testing campaign using strategy.
Simply put, this strategy is simple to set up and easy to manage. Plus, t is one of the best choices for your business if you have a limited ad budget or the keywords you are targeting have low search volume.
We recommend using this strategy if your ads already have a high conversion rate and you are looking to increase volume.
Google Ads Bidding Strategy #4. Maximize Conversions
This is one of the simplest Google Ads bidding strategies on offer and it affects search campaigns mostly.
If your advertising goal is to increase sales or leads, try this strategy. Google targets searchers with higher buyer intent and bids on these keywords for you.
To maximize conversions, Google will use an automatic bidding strategy to help you achieve the highest number of conversions for your budget.
For example, if you set a daily ad budget of $40, Google will use this $40 to find you the most conversions for your buck.
There is no bid limit control on this bidding strategy, so be sure to set a daily budget that you are comfortable with. This type of advertising can become very expensive and Google may exceed your daily budget to bring more conversions.
Once your campaign is over, assess your return on investment (ROI) to see if the ad was profitable. If maximizing conversions helps to increase your sales profitably, this strategy was a success.
Google Ads Bidding Strategy #5. Maximize Conversion Value
The newest bidding strategy on the Google Ads platform is “Maximize Conversion Value.” It was added in August 2019.
Similar to Target ROAS, the Google Ads algorithm seeks to maximize the return on your advertising investment.
The main difference is that there is no need to specify a target ROI; instead, you can just let the algorithm do its best to maximize every penny you spend on advertising.
Your bids are automatically set by Google Ads to help you maximize conversion value while staying within your budget. In order to determine the best CPC bid for each auction, Google gathers data on the device, location, time of day, demographic, query, and more.
Due to Google’s ability to identify users who are more likely to make purchases that are valuable to you, you will automatically generate the most money from your advertisements.
Google Ads Bidding Strategy #6. Target Impression Share
In order to help you reach your impression share goal across all campaigns, Target Impression Share Bidding automatically sets bids for you.
Depending on where you want your advertisements to appear, you have three choices for the Target impression share strategy:
- At the absolute topmost position on the page.
- At the top of the page.
- Anywhere on the results page of a Google search
You can cap the highest amount you’ll allow the strategy to bid by setting a maximum CPC bid limit with this strategy.
Setting your limit too low runs the risk of limiting your bids, which could have an impact on your objectives. If you set no limits, your CPCs could significantly increase and your budget could be quickly depleted.
This bid strategy is excellent for brand-related keywords that you want to rank highly for (aim for a 95% impression share). But, it can be overly expensive and may not bring you conversions.
Google Ads Bidding Strategy #7. Manual cost-per-click (CPC)
Your bidding strategy is more in your hands with manual CPC bidding. More control, however, means more time spent keeping an eye on expenses and adjusting bids on your own.
This approach is not your best option if you are still learning Google Ads. To achieve the best results, time, experience, and extra work are required.
You can set your own bids for various ad groups or keywords using manual CPC. If certain search terms are more profitable than others, you can quickly change budgets to add or subtract funds from other campaigns.
Manual CPC is a lot of work if you have a varied campaign with numerous ad groups and keywords. Additionally, you might end up bidding too high for clicks that are unlikely to result in sales.
To select manual CPC as your bidding strategy, go into your Google Ads campaign and uncheck the box next to enhanced CPC, which is checked by default.
There will be a warning that the campaign might perform poorly, but if you don’t have any prior data or have a small budget, this strategy could be your best bet.
If you do decide to go this route, ensure you’re choosing a bid that’s on the lower end and increasing gradually. Otherwise, you’ll end up overspending your budgets at a loss.
For new advertisers, accounts, or campaigns, this is usually the best bidding strategy. You can monitor performance and ensure that none of your ads are overspending.
Google Ads Bidding Strategy #8. Enhanced cost-per-click (ECPC)
In a nutshell, enhanced cost per click is a hybrid of manual and smart bidding. You specify the starting CPC for your ad groups and keywords and then Google’s algorithm optimizes them for you by increasing or decreasing as needed.
Both Google’s Search and Display networks support this type of bidding.
The bidding aspect is decided based on the algorithm itself.
The benefits of using ECPC:
- It increases click-through rate (CTR) and conversion rate (CVR) significantly more than manual CPC bidding alone.
- It reaches a larger number of people in a wider audience.
The downsides to using ECPC:
- Due to the lack of bid caps, you may notice an increase in CPC. This may or may not be profitable for your ad account. We see this in the majority of smart bidding strategies.
- Due to a lack of bid control, you may end up spending more than you planned for each day.
Google Ads Bidding Strategy #9. Viewable CPM (cost per 1,000 impressions)
vCPM bidding is a manual bidding strategy that works best when you are trying to increase brand awareness.
Just like CPM bidding, it is reserved for the Display Network and YouTube Ads.
Viewable CPM bidding allows you to set target bids for every 1,000 impressions where your display ad is considered viewable.
An impression is counted as viewable when someone views 2 seconds of a YouTube ad or 1 second of a Display Network ad.
The benefits of using Viewable CPM:
- A fantastic way to increase brand awareness.
- Predictable estimates of ad costs.
- You only pay when your ad has been deemed viewable 1000 times.
The downsides to using Viewable CPM:
- The return on investment of vCPM is often lower for low-traffic websites or small brands.
- Viewable CPM is not meant to drive actual results such as sales or conversions.
Google Ads Bidding Strategy #10. Target CPM (cost per 1,000 impressions)
In 2018, Google Ads introduced Target Impression Share (CPM) as a new bidding strategy.
This method of bidding is solely based on impressions. Currently, it is only available on the Display Network and YouTube Ads, and it is not available on the Search Network.
The primary focus of this strategy is to increase brand awareness and help you reach the greatest number of people possible.
With this strategy, you are charged your specified target CPM, which is not the maximum, but rather the average bid you are willing to pay every 1,000 times your ad is displayed.
Whether viewers finish or skip the ad, your ad cost is determined by the fact that your ad was shown.
Target Impression Share is typically used for branded search campaigns as your ad will be seen by a large number of unique viewers.
The downside to the Target Impression Share strategy is that you are charged for an impression even if someone skips over your ad. This can create a large amount of wasted ad spend for your business.
Google Ads Bidding Strategy #11. Maximum CPV (cost-per-view)
If you want to raise brand awareness for your business with a YouTube campaign, this is one of only two bidding options.
Maximum CPV allows you to specify the highest bid you are willing to pay for a video view (or interaction with your ad). A view is defined as 30 seconds of video ad viewing, or if your video ad is shorter, the entire ad is considered a view.
If someone interacts with your ad, such as clicking on any overlays you may have, you will be charged your CPV bid amount.
The major benefit of using Maximum CPV as your bidding strategy is that you do not have to pay when someone skips or closes out of your ad.
With Max CPV, you are paying to have your ad shown to engaged audiences. More views does not necessarily mean more sales, but it is a great way to increase awareness of your brand.
Which bidding strategy should you use if you want to increase revenue from your ad spend?
We recommend using target return on ad spend (ROAS) as your main bidding strategy if increasing revenue is your main focus with smart shopping.
If you’re using a standard shopping campaign, we recommend starting with maximize clicks for testing products and manual cpc for scaling.
These bidding strategies have proven to work after hundreds of thousands of dollars of ad spend regardless of the niche. Some eCom store owners might have different experiences, but this is what has worked for us.
Other bidding strategies that we recommend trying if you want to increase revenue, sales, or conversions on your ad:
- Maximize Conversions
- Target CPA
- Manual CPC (with enhanced CPC enabled)
Find the Perfect Bidding Strategy for Your Business
To get the highest return on investment from your Google Ad campaign, you need to select the right bidding strategy.
- Instead of picking a bidding tactic at random, choose one based on your campaign’s goals and volume.
- For a few weeks, test different bidding strategies (via A/B tests) to see how performance changes.
- Conversions, conversion rate, cost per conversion, conversion value, and other key performance indicators should all be monitored and optimized.
- Stick with the strategy that produces the best results!
See How My Agency Can 10x Your Brand's Sales With Google Ads
Google Ads – effective targeting and scaling methods for ROI.
Bing Ads – dominating the market of a fairly untouched platform.
Facebook Ads (Retargeting) – helping stop the leaks from all sides of the bucket, especially with retargeting.
If you’d like help deciding on the perfect bid strategy and implementing it, we’re here to help. We specialize in growing eCommerce brands and service-based businesses, doing $25,000 to $30,000 or more with Google Ads and PPC.
To nail your bidding strategies, schedule a free call with us today! We will discuss the secrets that we have discovered and get you on track to dominating the paid ad auctions at Google.
We are excited to help you grow.