Google Ads

How To Use Bid Strategies In Google Ads

Google Ads offers the opportunity to use different bid strategies within your account.

The big advantage of using bid strategies is that you have to spend significantly less time optimising your keyword bids.


What are bid strategies?


Bid strategies allow you to use Google’s algorithm for your keyword bids so that you don’t have to worry about doing this manually.

The more data, the better. It’s not recommended to use the bid strategies for any accounts that don’t have a lot of conversion data.


Bidding vs manual


Back in the days, you had to manually change the bids of each of the keywords in your account. You needed to analyse the data and then individually go through each of the keywords and decide a CPC bid. Then, you could tweak these bids based on the device, location, time of day etc. You can then find the combination that works the best.


Google Ads bid strategies manual vs bidding.

Using SEM bid management tools like DoubleClick Search or Marin are expensive and typically not available for the smaller Google Ads accounts. Over the last few years, Google worked on creating algorithms within Google Ads to take away some of the manual work. The bid strategies are part of this.


Bid strategies work based on a goal. Google’s algorithm looks at various indicators (keyword, location, device and many other unknown ones) and decides the best bid to match your goal.

Automatic bid strategies are user-based, so Google re-calculates the bid every time one of your keywords gets triggered.


Google Ads automated bidding strategies


Based on your goals there are a few different bid strategies you could consider for your campaigns.


Target CPA (cost-per-acquisition)

With Target CPA the bids are set to get as many as possible conversions out of your budget while keeping in mind the CPA goal. If you’re focusing on lead generation and have a clear cost per lead goal, this would be the bid strategy to use.


Target ROAS (return-on-ad-spend)

ROAS stands for Return On Ad Spend. This bidding strategy is focussed on getting you as many as possible conversions while matching the ROAS goal. This is mainly for e-commerce websites and webshops.


Maximise Conversions

This bidding strategy works together with your daily budget and will focus on maximising the number of conversions from your campaigns.


Enhanced cost-per-click (ECPC)

Enhanced CPC is a variation of manual bidding, where you give the system the opportunity to automatically adjust your bids to increase conversions. The algorithm can increase your bids if it’s more likely a click will turn into a conversion, as well as decrease your bids in the case it’s less likely.


Maximize Clicks

This bidding strategy will get you as much as possible clicks for your daily budget. Keep in mind this might include irrelevant traffic. You should set up conversion tracking for your campaigns and use the maximise conversion bidding strategy instead.


Manual CPC bidding (manual bidding AdWords)

This is the default option, which means you will manually set all of your keyword bids.


Target Search Page Location (position bid strategy)

With this bidding strategy, you will be targeting position (first page or even first ad position) no matter the cost-per-click.


Target Outranking Share

You can add a domain of one of your competitors and tell Google that you want to out-rank them.


Bid strategy best practices


The bid strategies perform better depending on the data that is available. When launching new campaigns, I would recommend starting with manual bidding. Once you collected the initial data you can implement one of the bidding strategies.


Google Ads best practices.

Keep in mind that the bid strategies need some time to learn as well. Google recommends giving each new bid strategy at least two or three weeks to learn. After this period you will be able to see it matching the goals.


You might want to test out different bidding strategies to see which one works the best for you. Based on the type of campaign you are running you might want to consider the following strategies.


Lead generation

If you are running a lead generation campaign you would want to use either the target CPA or maximize conversions bid strategies.


If you have a clear cost per lead that you target, use the target CPA option. This will make sure that you won’t exceed your goal. If you noticed that you reached your daily budget, you can either decide to increase your daily budget or lower your target CPA. The latter will lower your cost per lead and will get you more leads for the same budget.


E-commerce

When running e-commerce campaigns you can use the target ROAS or (again) the maximize conversions options.


Especially if you’re running a large e-commerce website with a lot of products with different revenues I would go for the first option. Smaller webshops can consider the second option as well.


Branding

If you’re running branding campaigns you should still care about conversions. I would recommend tracking at least an important page on your site so that you can track high-quality visitors over low-quality.


Once you set this up you can use the maximize conversions option. I wouldn’t recommend using the maximize clicks option.


If you want to outrank your competitors for certain keywords (eg. your branded keyword) you can consider using one of the position based bid strategies.


Conclusion


When done right, automated bidding can make your campaigns more profitable. It also reduces the time that you would normally spend on manually adjusting your bids.


The time you save you can spend on optimising other aspects of your campaigns, like ad copy testing or Quality Score optimisation. This can further increase the performance of your campaigns.


There’s no doubt that machine-learning will be better for making large-scale calculations like keyword bidding.

As a side-note, you could argue if you would want Google to decide your keyword bids based on factors that are unknown to us. That being said, at Vazooky Digital we have seen a big improvement in the performance of campaigns that have enabled the automatic bidding features.

Author


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Jeroen Minks

With over 10 years experience in digital marketing, Jeroen helps businesses to get more results out of their online advertising budgets.