There are several Google Ads bidding strategies to help businesses reach their target audience and drive conversions.
To maximize the performance of PPC campaigns, it’s imperative that businesses and marketers understand the different bidding strategies available in the Google Ads network.
In this article, I will explain how Google Ads bidding works and share the 10 best Google Ads bid strategies that PPC experts regularly employ to outperform your competition.
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Google Advertising Bidding Strategies
Every Google Ads bidding strategy that I am going to discuss in this article falls under three categories:
Category 1: Manual Bidding Strategy
The manual bid strategy allows you to manually set your bids for keywords, ad placements or other targeting options in your Google Ads campaigns. You have full control and complete flexibility. However, manual bidding is time-consuming and requires constant monitoring of ad campaigns.
Category 2: Semi-Automated Bidding Strategy
A semi-automated bid strategy is a hybrid approach combining manual and automated bidding elements. It involves using automated bidding features or tools provided by advertising platforms while still retaining some level of manual control and decision-making. The Enhanced CPC bid strategy is part of a semi-automatic bid strategy.
Category 3: Fully Automatic Bidding Strategy
In the fully automated bidding model, Google sets bid amounts on its own depending on how likely your ad will result in a click or conversion. Automated bidding avoids guesswork to help you meet your Ad performance goals. Unlike Manual CPC bidding, you don’t have to manually update campaign bids for specific ad groups or keywords.
Top 10 Google Ads Bidding Strategies
Knowing all Google bidding ad strategies is a fantastic way to increase your return on ads spend (ROAS). You should carefully choose your bid strategies based on your campaign goals.
Here are the top 10 Google Ads bidding tactics used by experts:
1) Manual Cost-Per-Click (CPC) Bidding
Manual CPC bidding is one of the basic PPC bid tactics where you can set maximum bids manually for either the ad group or keyword:
You pay when viewers click on your ad. You can set a maximum CPC bid for your ad groups (your default bid). You can also set separate bids for custom keywords.
CPC Bid Amount = Maximum Cost Per Click
If specific keywords in your campaign drive more conversions, you can use manual bidding to allocate more of your advertising daily budget to those keywords. For example, if you have an online store selling Adidas shoes, you can allocate a higher bid for keywords like “Adidas running shoes” to ensure that your ad appears prominently when users search for that specific term.
Now let’s assume through PPC keyword research you find that the average CPC for relevant keywords is $5.50. As the campaign runs, closely monitor the Google Ads performance. If you find that a CPC bid of $5.50 drives a satisfactory conversion rate and meets your target CPA, maintain or slightly increase the bid amount for successful keywords.
2) Enhanced Cost-Per-Click (ECPC)
Enhanced CPC or ECPC is an automatic Google Ads bidding strategy to adjust your manual bids for clicks that seem more or less likely to convert:
One of the most significant advantages of ECPC is that it keeps your average CPC below the max CPC when optimizing for conversions.
Enhanced CPC can be used with Display ad campaigns without setting up conversion tracking. However, you will have to set up conversion tracking with Search, Shopping or Hotel campaigns.
The formula to calculate the ECPC bid amount is:
ECPC Bid Amount = Maximum Manual Bid * (1 + ECPC Adjustment)
For example, if the ECPC adjustment for a particular auction is 20%, the formula to calculate the ECPC bid amount would be:
ECPC Bid Amount = $1.50 * (1 + 0.20) = $1.80
In this case, the ECPC bid strategy would increase your manual bid by 20% to $1.80 for that specific auction. It’s important to note that the ECPC bid amount will still be within the limits of your maximum manual bid. If the ECPC adjustment resulted in a bid amount higher than your maximum bid, the ECPC bid would be capped at $1.50.
3) Target Cost-Per-Acquisition (tCPA)
Target CPA bidding is a Smart Bidding strategy that optimizes your bids for conversions:
You need to specify the average cost you’d like to pay for each conversion under the CPA bidding Google Ads strategy.
Let’s consider an example of a digital marketing agency that offers website design services. The agency has determined that its target Cost-Per-Acquisition (tCPA) is $100, meaning they are willing to spend up to $100 to acquire a new client through its website.
To calculate the Target CPA bid amount, they also consider the historical conversion rate of their campaign, which is 2%. The formula to calculate tCPA is:
Target CPA = Maximum allowable cost per acquisition x Conversion rate
Using the formula, the calculation would be:
Target CPA Bid Amount = $100 * 0.02 = $2
In this case, the agency would set its Target CPA bid amount at $2. This means that for each click on their ads, they are willing to spend up to $2 to achieve conversion and acquire a new client.
4) Target Return on Ad Spend (tROAS)
Target ROAS is one of the most powerful Smart Bidding strategies that leverage “auction-time bidding” to optimize your advertising returns:
If the Google Ads algorithm determines that a user search is likely to convert with a high value, Target ROAS will bid high on that search. Similarly, it will bid low if the algorithm determines that the search isn’t likely to generate a high-value conversion.
The formula for calculating tROAS is:
tROAS = (Revenue Generated from Ad Campaign / Cost of Ad Campaign) * 100
For example, a company runs an advertising campaign with a total cost of $5,000. The campaign generates revenue of $20,000:
tROAS = ($20,000 / $5,000) * 100 tROAS = 4 * 100 tROAS = 400
In this example, the tROAS is 400, indicating that for every dollar spent on the Google Ads account, the company generates $4 in revenue.
5) Maximize Conversions
As the name suggests itself, Maximize Conversions bidding strategy is a Google Ads bid strategy to automatically adjust bids to help get the most conversions for your campaign:
Google automatically uses the historical campaign data and contextual signals present at auction time to find the best bid for your ad automatically.
Let’s say a company has a budget of $1,000 for its advertising campaign. The bidding algorithm determines the optimal bid for each ad auction based on historical data and the likelihood of conversion. Throughout the campaign, the algorithm dynamically adjusts the bids to increase the chances of conversion. It might bid higher on keywords or placements that have historically generated more conversions for the company and bid lower on those with lower conversion rates.
At the end of the campaign, let’s assume it generated 50 conversions. The cost of the campaign, which is the total amount spent, is $800. In this example, the Maximize Conversions strategy helped the company achieve 50 conversions within its budget of $1,000.
The cost per conversion would be:
- Cost per Conversion = Total Campaign Cost / Number of Conversions
- Cost per Conversion = $800 / 50
- Cost per Conversion = $16
6) Maximize Conversion Value
The Maximize Conversion Value bidding tactic helps increase your campaign’s total conversion value within your specified budget:
The formula for Maximize Conversion Value bidding is as follows:
Maximize Conversion Value = Conversion Value / Cost of Ad Campaign
To calculate the Maximize Conversion Value for a specific campaign, you need to know the total conversion value generated by the campaign and the cost of the ad campaign. For example, a company runs an advertising campaign with a total cost of $2,000, so:
- The campaign generates a total conversion value of $10,000.
- Maximize Conversion Value = $10,000 / $2,000
- Maximize Conversion Value = 5
In this example, the Maximize Conversion Value is 5. It means that the company generates $5 worth of conversion value for every dollar spent on the advertising campaign with the help of the maximize conversion value strategy.
7) Maximize Clicks
Maximize Clicks is one of the top automated bidding strategies that aim to optimize your PPC campaigns for maximum clicks:
You can use Maximize Clicks target search for a single campaign or as a portfolio bid strategy.
Let’s say a company has a budget of $1,000 for its advertising campaign. The bidding algorithm dynamically adjusts bids to increase the chances of receiving more clicks.
Throughout the campaign, the algorithm may bid more aggressively on keywords, placements or audiences that historically generated higher click-through rates (CTR) and bid less on those with lower CTR.
At the end of the campaign, when the entire budget is exhausted, let’s assume it generated 10,000 clicks. The cost of the campaign, which is the total amount spent, is $800.
In this example, the Maximize Clicks strategy helped the company achieve 10,000 clicks within its budget of $1,000. The cost per click would be:
- Cost per Click = Total Campaign Cost / Number of Clicks
- Cost per Click = $800 / 10,000
- Cost per Click = $0.08
So, in this case, the cost per click using the Maximize Clicks strategy is $0.08.
The goal is to achieve as many clicks as possible while staying within the budget, and the bidding algorithm optimizes the bids to achieve that objective.
8) CPM Bidding (Cost-Per-Thousand Impressions)
Maximum CPM (cost-per-thousand impressions) is a bidding tactic in which you set a maximum bid amount to pay each time your ad is shown 1,000 times:
You can also use this as a portfolio bidding strategy. The bidding strategy is best for campaign goals like brand awareness and reach.
The formula for calculating CPM is as follows:
CPM = (Total Cost of Campaign / Total Impressions) * 1000
Let’s say a company runs display network campaign ads that cost $5,000. The campaign serves a total of 100,000 ad impressions.
CPM = ($5,000 / 100,000) * 1000 CPM = $50
In this example, the CPM for the campaign is $50. It means that for every 1,000 ad impressions served, the advertiser pays $50.
9) CPV Bidding (Cost-Per-View)
The CPV bidding tactic is used in video advertising campaigns:
Under the CPV bidding, you only pay for video views and interactions (such as clicks on call-to-action overlays, cards and companion banners). A view is counted when someone watches 30 seconds of your video ad or interacts with the ad, whichever comes first.
The calculation for CPV is straightforward:
CPV = Total Cost of Campaign / Total Views or Engagements
Let’s say a company runs a video advertising campaign that costs $2,000. The campaign generates 10,000 views or engagements with the video ad.
CPV = $2,000 / 10,000 CPV = $0.20
In this example, the CPV for the campaign is $0.20. It means that the advertiser is paying $0.20 for each view or engagement with their video ad.
10) Target Impression Share Bidding
Target Impression Share is one of the popular automated bidding strategies that lets you adjust your bids to show your ad anywhere in the Google search results:
A target impression share strategy is helpful for campaigns with brand terms.
For example, you wish to achieve a 50% impression share in a specific ad campaign, and your ads generate 10,000 impressions. The campaign’s actual impression share achieved is 60%.
To calculate the Target Impression Share, you can use the following formula:
Target Impression Share = (Impression Share Achieved / Total Available Impressions) * 100
- Target Impression Share = (60% / 10,000) * 100
- Target Impression Share = 0.006 * 100
- Target Impression Share = 0.6%
Best Google Advertising Bidding Strategies
For your convenience, I’ve put all this info into a handy chart to help you decide which Google Ads bidding strategy you should use:
To get an edge with your Google Ads, be sure to check out:
Google Ads Transparency: A New Tool to Spy on Your Competitors
Last Word on Google Ads Bidding Strategies
It is crucial for advertisers to carefully consider their campaign goals, budget and available resources when selecting the most suitable automated bid strategies.
By staying informed about the best practices and experimenting with different bidding strategies, you can optimize your Google Ads campaigns and achieve remarkable success.
If you’re ready to level up your business with advertising, Single Grain’s Google Ads experts can help!👇
Google Ads Bidding FAQs
How often can I change my bidding strategy?
You can change your bidding type at any time during your Google Ads campaign. However, it’s important to note that Google ads bidding work when you give ample time to collect sufficient data from multiple campaigns before evaluating the results.
Which are the bidding methods that are no longer used?
The Target Search Page Location and Target Outranking Share bid strategies have been discontinued by Google.
What are portfolio bid strategies?
Portfolio bidding strategies group together multiple campaigns into a single strategy. You can think of it as a central hub for managing your bids. Portfolio bid strategies save time, and you can make changes across different campaigns using a one bid strategy.
What is the best bidding strategy for new campaigns?
The best bidding type for new campaigns depends on your specific goals, but a combination of manual bidding and automated bidding options such as Target CPA or Target ROAS bidding strategy can provide a good starting point for optimizing performance and controlling costs.