Google AdWords is a very powerful tool that can help businesses get more customers. It is one of the most effective ways to advertise online.
The Google AdWords system uses the same technology that powers Google Search to place ads in front of people who are interested in your products and services when they are searching for related terms on Google.
Google Ads bidding strategies are designed to help you reach your business goals as effectively as possible. They can also help you avoid unnecessary costs and increase your profit margins at the same time.
In this guide, we’ll explain how to choose the most optimal PPC bidding strategy for your AdWords campaign depending on your goals, budget, products so you can get the most out of every advertising dollar.
Table of Contents
11 Google Ads Bidding Strategies and the Use Cases of Each
Below we talk about the bidding strategies in AdWords, discuss what goals you should pursue with each of them, and share tips on how to make your campaigns more profitable.
1. Target CPA (Cost Per Action)
When you choose this PPC bidding strategy, you set the average cost that you are ready to pay for each conversion. Target CPA strategy will set your bids automatically to get as many conversions as possible with your target costs.
However, you shouldn’t expect that the end result of your target CPA should always be the number you have initially set. It can be below, above, or equal. Besides, if your target CPA is extremely low, Google might not even show your ads.
When should you use the Target CPA bidding strategy?
If you have clear CPA goals and know the value of each conversion for your business, it will be worth going after this PPC bidding strategy. You might also want to try this strategy if you have been using another bidding strategy and want to compare the CPAs for each strategy.
Tip: Google recommends that you check out your budget settings and make sure you are ok if it spends up to 2x your average daily budget. However, Google also notes that they won’t exceed your monthly charging limit.
2. Target ROAS (Return On Ad Spend)
When among all AdWords bidding strategies you choose Target ROAS, you set the average conversion value you want to get for each dollar spent. However, having too high expectations may not allow your ad to get high traffic. Google automatically adjusts bids to reach the ROAS goals the advertiser has set.
ROAS is expressed in percentage. To calculate your Target ROAS, one of the most profit-driven Google Ads bid strategies, you should divide your sales by your ad spend and multiple by 100%. Here’s the formula:
sales / ad spend X 100 = return on ad spend
For example, if you want to make $4 for every $1 you spend, your ROAS equals 400%.
sales / ad spend X 100 = return on ad spend (4 / 1) X 100 = 400% ROAS
When should you use the Target ROAS bidding strategy?
Target ROAS is great for businesses that own a huge and diverse product inventory. So it’s mostly beneficial for eCommerce stores and for businesses that have defined conversion value for each conversion.
Tip: If historical performance is available for your account, check out the Recommendations page and follow the recommended target.
3. Maximize Conversions
Maximize Conversions, another PPC bidding strategy, uses advanced machine learning to automatically optimize bids and help you get maximum conversions within your budget.
If you have a limited budget, you should start with a lower daily budget and see how everything works. Then you can slightly increase your daily budget to see if you get more conversions. This way, Google will work hard to get as many conversions as possible.
When should you use the Maximize conversions bidding strategy?
Among all bidding strategies in AdWords, this strategy is worth going after if all of your conversions have the same value, and you don’t have specific ROAS goals or CPA goals. For example, if you sell a course, a membership program, or event tickets and the product/service price is the same.
Tip: If you want to get cost-effective conversions, you should set Target CPA on your Maximize Conversions bidding strategy. Maximize conversions bidding strategy in itself doesn’t optimize the costs of action but will spend your whole budget to get as many conversions as possible.
4. Maximize Conversion Value
With Maximize Conversion value, one of the most popular Google Ads bidding strategies, Google will try to get conversions that have the highest value for your business. Opposite to Maximize Conversion bidding strategy that focuses on the number of conversions, this strategy focused on the quality (or value) of them.
When should you use the Maximize Conversion Value bidding strategy?
If your business offers different products and consequently different price points to your customers. You would like to use this bidding strategy if your goal is to drive conversions to your most expensive and most profitable products. eCommerce businesses are a great fit for this AdWords bid strategy.
Tip: Maximize Conversion Value bidding strategy will try to spend your whole average daily budget and increase your ad spend. To avoid this, check your average daily budget and set a target ROAS goal.
5. Enhanced CPC (Cost Per Clicks)
While other Smart Bidding strategies don’t require you to set bids manually and fully automate your bid strategy considering your CPA, ROAS, or budget target, ECPC partially automates your manual bids. In both cases, the goal is to get more conversions (quantity) or higher conversion value (quality).
When should you use the ECPC bidding strategy?
Among all Google Ads bidding strategies advertisers use this one when they already have some conversion data but not it’s not enough for using one of the Smart bidding strategies. To use any of the Smart bidding strategies, advertisers should have at least 30 conversions in the last 30 days. If the available data is below minimum requirements, advertisers should use ECPC as a temporary PPC bidding strategy.
Tip: ECPC bidding strategy considers the conversion rates for different types of traffic but it sets bids differently for mobile devices. So you only need to set bid adjustments for mobile to maximize conversions. However, if you are ready to pay a higher amount for a certain type of traffic, you can set a bid adjustment.
6. Maximize Clicks
This bidding strategy helps you get as many clicks as possible. It’s one of the AdWords bidding strategies that aim at increasing your brand awareness and web traffic and might be a fit good for a business with a large budget.
When should you use the Maximize Clicks bidding strategy?
If your business has a really well-optimized landing page with a strong CTA and you want to get as many eyeballs to your offer as possible. Or if you simply want to increase your website traffic.
However, it really doesn’t make sense to pay for clicks as clicking an ad doesn’t mean they will convert. Google will charge you for unqualified visitors and you might not get anything valuable in return.
Tip: You can add Maximum CPC (cost per click) bid limit to your Maximize Clicks bid strategy. It will allow you to define the maximum amount you are ready to pay for each click. Failing to set a limit will result in Google adjusting your bids.
7. Manual CPC (Cost per click)
Manual CPC bidding is one of those Google Ads bidding strategies that allow setting a maximum CPC for your ads (keywords, ad group, campaign). That’s the maximum amount you are ready to pay for each click. Note that if your bids are too low, Google might not serve your ads to users and you might lose potential customers.
When should you use the Manual CPC bidding strategy?
- If you want to have full control over your keyword bids.
- If you have available time to check and manually adjust your keyword bids.
- If your account doesn’t have at least 30 conversions in the past 30 days and you can’t use a Smart Bidding strategy.
Tip: In the beginning, you can set a maximum CPC bid for your entire ad group. Once you notice that some keywords are more profitable, you can allocate more of your budget to those keywords.
8. Target CPM (Cost per mille/thousand impressions)
With this bidding strategy, advertisers pay per thousand impressions. You don’t pay for anyone who skips out your ad and this strategy usually comes out fairly cheap. However, this is one of Google Ads bidding strategies that focus on vanity metrics as impressions don’t always lead to conversions and sales but you are charged to be seen.
When should you use the Target CPM bidding strategy?
If your business wants to run ads on the Google Display Network or Youtube ads, then out of all Google Ads bid strategies, you might want to use the Target CPM bidding strategy. However, it’s not available for the Search network. Also, this bidding strategy can be helpful if you want to increase your brand awareness.
Tip: Try to keep your video ads below 15 seconds and communicate your message quickly as users aren’t likely to watch a 30-second ad.
9. Viewable CPM
Out of all AdWords bidding strategies, Viewable CPM requires you to pay only for 1,000 impressions that are considered “viewable”. It means that users see 50% of your display ads on screen for 1 or more seconds or if your video ad plays 2 or more seconds. This strategy isn’t available for Search Network only campaigns.
When should you use the Viewable CPM value bidding strategy?
As in the case of the CPM bidding strategy, this one also works mainly for brand awareness campaigns. If your goal is to increase your conversion rate, your ROAS, or conversion value and you plan to run a profit-driven campaign, you should definitely skip this AdWords bid strategy.
Tip: If you want to proceed with this bidding strategy, make sure your ads are compatible. Otherwise, your ads won’t run.
10. Cost Per View (CPV)
CPV is on the list of Google Ads bidding strategies that are awareness-driven instead of conversion-driven and profit-driven.
When you choose the CPV bidding strategy, you pay for video views or clicks. If the user watches your video for 30 seconds (or the whole video if it’s shorter), that’s counted as a “view”. The maximum CPV bid is the highest amount you are ready to pay for a view or click.
When should you use the CPV bidding strategy?
If you want to run a bumper ad, a video discover ad or a non-skippable in-stream, Google Ads bidding strategies can be applied. CPV bidding strategy is one of your options. Another option is the CPM bidding strategy but you’d rather pay for a 30-second video view or click that for a 2-second video view.
Tip: The actual CPV is the final amount you pay for a view. It’s often less than your maximum CPV. Quality Score and Ad Rank are two essential elements that affect your actual CPV. Quality Score shows how relevant your ad is for users, while Ad Rank is your Quality Score multiplied by your maximum CPV bid.
11. Target Impression Share
Among all Google Ads bidding strategies, Target Impression Share allows advertisers to set what % of the time Google will show their ads to users when they are searching for your target keywords. Advertisers can also choose where Google will show their ads: on the absolute top of the page, on the top of the page, or anywhere on the page of Google search results.
When should you use the Target Impression Share bidding strategy?
You should use this AdWords bid strategy especially when you are bidding on branded terms. In this case, you want to make sure that searches will see your ad 100% of the time. So you set the Target Impression Share to 100%.
You might also want to use this bidding strategy if you have a large budget and would like to increase brand awareness.
Last but not least, this is a great defensive strategy against your competitors if they are bidding on your branded keywords and want to steal your potential customers.
Tip: Make sure not to set your Max CPC limit bid too low. Otherwise, it might hold you back from reaching your Target Impression Share goal.
Choose the Right Google Ads Bidding Strategy with Andava
It’s essential not only to choose the right AdWords bid strategy for your campaign but also set up your campaign the right way. You should be comfortable with the technical aspects of Google Ads as well, otherwise, your ads won’t work the way you were expecting.
Andava provides Google Ads management services. We have seen thousands of campaigns succeed with the help of lesser-known best practices, tips, and secrets.
We will help you choose the ideal Google Ads bidding strategies for your campaigns and keep your ad costs down while increasing your conversions and ROAS.