Google Ads Bidding Strategy – How To Choose The Right One For Your Campaign

Last Updated on April 3, 2024 by Subhash Jain

The accurate bidding strategy for marketing goals and its perfect implementation reduces your ad cost considerably. To succeed in this initial task of Google Ads marketing, you need to know the latest updates to Google Ads bidding strategies and the trends followed by the top performers. Though ‘Google Ads Auction Insights Report’ helps you perform good but optimized strategy implementation helps you get the best results at a low cost. In this blog, I share the latest updates to Google Ads bidding strategies and tips as well to help you get the maximum ROI in line with your preferences like networks, targeting, clicks, conversions, impressions, views, etc.

Let us be your guiding light in navigating the seas of digital marketing, as I have unlocked the true potential of Smart Bidding.You’ll still be able to use Target CPA and Target ROAS as bid strategies. They’ll simply be bundled with the Maximize conversions and Maximize conversion value bid strategies, respectively. This means that Maximize conversions will have an optional target CPA & Maximize conversion value will have an optional target ROAS.

What is a Bidding Strategy?

A bid strategy guides you for a cost-efficient Google Ads campaign defining when, why, where, and to whom your ad should be shown to increase clicks, conversions, conversion value, and visibility in search results as is preferred by advertisers. Smart bidding strategies can be value-based or conversion-based.

How Do Bidding Strategies Work? How Does Google Ads Calculate Bids?

Google has its parameters to fix the ranking of Google Ads in search results. The ads are reviewed for ranking each time whenever someone searches the related products/services. There are five key ranking factors that determine the order of Google Ads:

1. Bid 
2. Google Ad relevance 
3. Ad assets  
4. Ad Rank based on quality 
5. Context of ad with the perspective of search term

Different Types of Bidding Strategies

For businesses new to Google ads campaigns, it is common to design a campaign that ‘does it all’. There is no doubt that your business needs clicks, conversions, engagement, and cost-effectiveness. Google ads campaigns can be managed to achieve the marketing and promotional goals under the budget by using different bidding strategies. The major categories of bidding strategies are manual and automated. 

Under a manual bidding strategy, an advertiser manages keyword bids by self without the help of AI assistance based on the performance data of targeted keywords. Manual bidding is good for businesses having a limited budget, a small customer database, enough time to monitor performance, and skills to make changes.

Also known as smart bidding, automated bidding is an AI-powered keyword bidding strategy that works in line with real-time algorithms to optimize bids for particular PPC campaign goals.

A Paradigm Shift in Advertising

Smart Bidding isn’t just another tool; it’s a revolutionary approach to bidding strategies that leverages the prowess of machine learning and AI algorithms. No longer bound by the constraints of manual bid adjustments, advertisers now have a formidable ally that optimizes bids in real time. Imagine, in the vast expanse of the digital landscape, an intelligent system that analyzes a plethora of signals, including device, location, time of day, language, and operating system, to determine the optimal bid for each individual auction. This isn’t fiction – it’s the extraordinary power of Smart Bidding.

Manual CPC Bidding: Taking the Wheel

When it comes to having full control over your bids, Manual CPC bidding is your go-to strategy. By setting bids manually, you decide how much to pay for each click. It’s like driving a car – you determine the speed, navigating each turn with precision. This approach is ideal for those who want hands-on involvement, enabling swift adjustments to optimize performance. However, be cautious – manual bidding requires constant vigilance and time investment to stay competitive. Learn more About Manual CPC bidding.

Automatic Bidding: Let AI Steer

Picture yourself in a self-driving car with Automatic Bidding. Google’s machine learning algorithms take charge, analyzing heaps of data to set bids for you. Automatic Bidding strategy offers various flavors like Target CPA and Target ROAS, each tailored to your campaign goals. It’s like having a seasoned chauffeur who anticipates road conditions, but remember, relinquishing control means entrusting AI to make the best decisions. To ace automatic bidding, understand your campaign objectives and closely monitor results.

Enhanced CPC: Manual with a Boost

Think of Enhanced CPC as a trusty co-pilot to your manual bidding journey. It tweaks your manual bids in real-time, leveraging historical data to enhance your chances of conversions. This strategy’s magic lies in adaptability – it’s like having a personal fitness trainer who adjusts your workout routine as your strength improves. Employ Enhanced CPC  strategy when you’re confident in your manual bids but seek an extra edge for better outcomes.

Target ROAS bidding

ROAS bidding strategy helps you get as much return on ad spend (ROAS) as possible. Google will automatically adjust your bids to try to get you as much conversion value as possible while spending your daily budget.

Maximize Conversions: Chasing the Crown Jewel

Imagine chasing after rare treasures – that’s the essence of Maximize Conversions strategy. Maximize Conversions approach sets bids to garner as many conversions as possible within your budget. It’s akin to a treasure hunt, where you’re determined to capture the most valuable gems. Before diving in, ensure your campaign is properly optimized and your budget is aligned with your goals. With this strategy, every click counts towards the ultimate prize – conversions.

Maximize Clicks: Scaling Heights

Scaling the peaks of ad visibility is the goal of the Maximize Clicks strategy. It’s like climbing a mountain where each click is a step towards greater heights. This strategy suits those aiming for maximum exposure, but beware of the budget – it’s like ensuring you have enough energy to reach the summit. Employ Maximize Clicks strategy when brand awareness is paramount, and you’re ready to embrace a higher click volume.

Target Impression Share Bidding: Share the Spotlight

Ever wanted to be in the spotlight? The Target Impression Share strategy gets you there. It’s akin to aiming for center stage at a grand event. Target Impression Share Bidding approach lets you specify the share of ad impressions you want on the search results page. But remember, the limelight comes at a cost – be prepared to adjust budgets and bids to secure your place under the spotlight.

Cost Per Thousand Impressions (CPM) Bidding: Displaying Impressions

Looking to make a lasting impression? CPM Bidding is your canvas. It’s like showcasing your art in a gallery, focusing on views rather than clicks. CPM Bidding strategy charges are based on impressions, making it ideal for brand exposure. However, be cautious – it’s like hoping your art catches the viewer’s eye amidst the crowd. Use this strategy when your goal is to be seen and remembered.

Cost Per View (CPV) Bidding: Captivating Videos

Stepping into the world of videos? Enter CPV Bidding. It’s like paying an admission fee to a show – you only pay when someone watches your video for a certain duration. CPV Bidding strategy is tailored for video campaigns, ensuring that you pay for engaged views. Just like a captivating performance, ensure your video content is intriguing enough to hold the viewer’s attention.

How to Choose the Right Bidding Strategy for Your Goals

Choosing a bidding strategy for a Google Ads campaign depends upon your marketing objectives. Choosing the right strategy and executing it in the right way is a critical decision. Changing Google Ads bidding strategy can help you achieve a multifold conversion rate. So, which is the best Google Ads bidding strategy for your business to get high-potential leads?

This table may help you choose the right bidding strategy

Bidding Strategy Type	Marketing Campaign Goals	Campaign Type
Target CPA (cost per acquisition)	Conversions	Search, Display, Youtube
Target ROAS (return on ad spend)	Higher value conversions	Searh, Shopping, Display
Maximize Conversions	Maximum conversions	Search,  Display
Maximize Conversions Value	Maximum conversions with value each conversion brings to your business	Shopping
Maximize Clicks	Clicks & website traffic	Search,  Display
Manual CPC	Clicks & website traffic	Searh, Shopping, Display
Enhanced CPC (Cost per Click)	Clicks & conversions	Searh, Shopping, Display
vCPM (cost-per-thousand viewable impressions)	Brand Awareness Increase	Display, YouTube
CPV (cost-per-view)	Views & Interactions Increase	YouTube

How to Match Your Goals to a Bidding Strategy

Selecting a bidding strategy in line with marketing goals is vital for getting the maximum ROI. There are five basic types of goals you should consider to match with bidding strategy: 

• If the direct action by customers on your business website is your Google ads goal- Focus on a conversions strategy 
• If increasing website traffic to your website is your Google ads goal- Focus on Cost-per-click (CPC) bidding strategy 
• If increasing brand awareness is your Google ads goal – Focus on cost-per-thousand viewable impressions (vCPM) bidding strategy 
• If increasing views of video ads is your Google ads goal-Focus on a cost-per-view or cost-per-thousand impressions (CPM) bidding strategy 
• If increasing product or brand consideration is your Google ads goal- Focus on a cost-per-view (CPV) bidding strategy

What is Target ROAS?

The Target ROAS bidding strategy allows advertisers to set a ROAS (target return on ad spend); and, following your inputs, Google Ads automatically adjusts the bids to help you achieve maximum. The AI-driven bid strategy analyzes and predicts the potential of conversion for every search relevant to products or services being advertised. Target ROAS increases bid value if the conversion potential of searches is high and vice-versa. Your ad, irrespective to campaign type, needs to qualify for Target ROAS bidding based on 30 days performance- 

• App campaign: 300 conversions in the past 30 days
• Video Action Campaign: 30 conversions in the past 30 days
• Display campaign: 15 conversions in the past 30 days

How to Track Target ROAS Performance

To measure ROAS Performance, identify the total revenue generated from the campaigns and divide it by the ad spend; now multiply it by 100 to get the performance gain in percentage. It gives you a fair idea about how close you are to target ROAS.

How to Set Up Target ROAS

If you want to maximize conversion values for target return on ad spend, Target ROAS is a good choice for you. Also, if you want optimized conversions from a particular customer segment for different values, working with Target ROAS bidding strategy is good for you. To set Target ROAS bidding-  

• Under the campaign menu, select the campaign to be edited 
• Under the ‘Settings’ on the page menu, open the bidding section to select ‘Target ROAS’ and ‘Save’. 

Target ROAS is the average conversion value for each dollar spent on ads. To optimize the value, you can use data of average conversion value per cost.

What is the Performance Max Bidding Strategy?

Performance Max, the new goal-based campaign strategy uses machine learning to optimize your bids across Google’s advertising channels. Under Performance bidding, Google automates the ads creation based on the provided assets. As well, Google displays the best relevant ad created by using a combination of assets to maximize the performance. It is designed to make keyword-based Search campaigns more effective to find more numbers of potential customers across the popular Google’s channels like Search, Discover, YouTube, Display, Gmail, and Maps. 

When Should You Use Performance Max Bidding Strategy for Google Ads Campaign

Performance Max can be seen as a merger of Dynamic Search Ads with Smart Shopping. Suppose your Google Ads campaign aims to increase conversions, values, new customers, metrics-driven insights, and bidding automation. In that case, the Performance Max bidding strategy is just for you. Get here for the full insights about the performance max campaign or if you are having trouble creating one. This is one of the most important steps to getting the best results from the bidding strategy.Performance Max combines Google’s AI technologies across bidding, budget optimization, audiences, creatives, attribution, and more. They’re all empowered by your specific advertising objective, for example, if you have a CPA or ROAS target, and the creative assets, audience signals, and optional data feeds you provide.

How to Reach the Right Customers on Search Using Bidding

Using an optimal bidding strategy to reach the right customers on search is the core of Google Ads campaign success. Therefore, targeting your ads for the right audience becomes necessary, and it’s crucial to know how audience targeting works in Google Ads. To achieve this, a mix of Smart Bidding, responsive search ads, and exact match proves to be highly effective. Adding to that, a powerful hack to further boost your campaign’s success is by leveraging AI-powered Search campaigns alongside the exact match and responsive search ads strategy with value-based Smart Bidding.

How to Target Your Ads to the Right People

Google Ads bidding algorithm is set to learn at the query level rather than at the keyword level; therefore, the perfect matching of ‘keyword match types’ and bidding strategy becomes crucial. It must be important to know about the keyword selection strategy to make the perfect bidding strategy

• Align the keyword strategy with bidding system
• Choose the keyword match types in line with bidding objective
• Simplify the Google ads account structure
• Set automated exact match only campaigns 

How To Set Your Bids For Search Ads

Editing bids based on campaign performance data helps you maximize the generated ROI of Search Ads campaigns. Here are five tips to set Google ads bids for Search Ads- 

1. Research and list the target keywords  
2. Group the relevant keywords together including some negative keywords 
3. Set bidding for categories of keywords
4. Look at the initial Max CPC
5. Adjust bids for search ads based on performance but avoid changing bids too often

How to Create a Display Campaign with an Effective Bidding Strategy

Display ads campaign helps businesses to reach relevant audiences through the browsing of engaging ads over a number of websites, apps, and Google properties. The display ads campaign is powered by Google’s AI for objective-oriented targeting, formats, and bidding. The process to create a display campaign is the same- 

• Create new Display campaign in Google Ads account
• Select campaign settings like frequency of ads appearance, start and end dates, locations, languages, exclusions, etc
• Set your budget; monthly spend is 30.4X of daily budget you fix
• Set bidding strategy like Target CPA, maximize conversions, maximize clicks, viewable CPM, manual CPC
• Set targeting strategy to add additional criteria for target keywords and audience
• Create responsive display ads displaying your assets like images, logos, videos, descriptions, and headlines
• Review and publish campaign 

How To Target Display Campaign Ads To The Right People

Google allows you to add several targeting signals to their display ads campaign to reach the target audience segments. For example, you can target the people already visiting your website site, the people with a particular demographic, or the people probably interested in your products/services in future. Every time you add a new targeting layer for display ads, you narrow the reach of the campaign. You will find “Targeting” settings in the ad groups or campaigns. “Observation” feature in setting allows you to monitor ads performance without narrowing the targeting further. 

How To Set Your Bids For Display Ads

You can set display ads bids in different ways- 

• Default bids: When your ad appears in a placement, Google Ads uses an ad group default bid.
• Custom bids: Google Ads uses custom bids when your ads appear on websites related to a particular topic.
• Bid adjustments: This option gives you more control because you can adjust bid adjustments at a campaign or group level like days, times, and locations. 

The options for display ads bidding strategies are- targeting a specific cost per action, maximize conversions, ROAS, CPC, maximize clicks, CPM, and manual CPC bidding. 

Target CPA Bidding: Unlocking the Potential of Conversions

Target CPA bidding, a Smart Bidding strategy, empowers advertisers to strike the perfect balance between cost and conversions. By setting minimum and maximum Cost-Per-Action (CPA) thresholds, you can ensure that every customer action you receive is optimized for maximum returns. Google Ads, with its AI prowess, automatically adapts this strategy based on the likelihood of conversions. The versatility of Target CPA bidding makes it accessible across various campaigns, making it a go-to choice for businesses promoting products or services across different price segments.

When to Use Target CPA Bidding Strategy for Google Ads Campaigns?

If your goal is to drive an influx of conversions, whether it be sign-ups, sales, or mobile app downloads, Target CPA bidding is a shrewd choice to make the most of your Google Ads budget. This strategy particularly shines for businesses offering a handful of products or services in distinct price categories. To embark on the Target CPA journey, setting up conversion tracking is essential. And if you ever encounter fluctuations in campaign performance, fret not—Explanations are there to provide insights and clarity.

Maximize Conversion Value Bidding: Elevating Your ROI to New Heights

Google introduced the enticing ‘Maximize conversions’ and ‘Maximize conversion value’ features in the optional target fields of Search campaigns settings. While both strategies are designed to optimize conversions, Maximize Conversion Value bidding goes the extra mile by factoring in the value each conversion brings to your business. Powered by an advanced AI system, this strategy allows you to set a specific value to be maximized, whether it’s profit margins or overall sales revenue.

When to Use Maximize Conversion Value Bidding Strategy for Google Ads Campaigns?

If different conversions hold varying degrees of value for your business, or you have a specific Return on Ad Spend (ROAS) target to achieve, the value-based bidding strategy is your ticket to success. Opting for Maximize Conversion Value bidding showcases a preference for quality over sheer quantity, ensuring you make the most out of each customer action. With real-time data optimization instead of bid adjustments, this strategy represents a leap forward in the world of Google Ads performance.

Maximize Conversion Value with Target ROAS: The Ultimate Fusion

In an exciting update on April 20, 2021, Google combined the best of both worlds with the integration of Target ROAS into Maximize Conversion Value bidding. Now, advertisers can relish the benefits of both strategies simultaneously, maximizing the value for their business while achieving the desired Return on Ad Spend. With this approach, Google Ads automatically sets bids to ensure an average ROAS as defined by the advertiser, ensuring a harmonious blend of conversions and profitability.

When to Use Maximize Conversion Value with Target ROAS Bidding for Google Ads Campaigns

For those who haven’t explicitly set a ROAS target, embracing Maximize Conversion Value bidding leads to the full utilization of your daily budget. If you find yourself spending below your average daily budget, this strategy becomes a viable option to boost daily expenditures. For eCommerce merchants, this approach is a golden ticket, as it combines revenue generation with brand strengthening, delivering the best of both worlds.

Embrace the Future of Google Ads Bidding Strategies

These are just a few examples of the groundbreaking updates to Google Ads bidding strategies. The digital advertising landscape is ever-changing, and staying abreast of the latest advancements is crucial to making the most of your advertising efforts. As Google continues to innovate, advertisers are presented with new avenues to optimize their campaigns and achieve unprecedented success. So, equip yourself with the knowledge and tools needed to harness the power of Smart Bidding, and let your business soar to new heights in the dynamic world of online advertising.

Conclusion

In conclusion, selecting the right bidding strategy is vital for Google Ads success. Manual bidding offers control but demands time, while automated bidding saves effort through machine learning. Beginners may start with manual bidding to understand the system better. Tracking performance and making necessary adjustments are crucial for achieving marketing goals within budget. Success entails a strategic and agile approach, rather than merely increasing spending. Consider seeking guidance from a specialized Google Ads Agency to optimize bidding strategy and metrics effectively. Remember, the key to thriving in Google Ads is continuous optimization and intelligent resource allocation.

About Author:

Subhash Jain is the founder of Samyak Online, a prominent digital marketing firm that specializes in Google Ads and its diverse campaign types. With a wealth of experience, Subhash Jain & his team  are recognized as seasoned experts in crafting highly effective bidding strategies for Google Ads. Don’t hesitate to contact us for Google Ads consultation if you need assistance or have any questions.