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A Guide to the Best Bidding Strategies for Google Adwords

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Written by

David Sharpe

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8 MIN

A Guide to the Best Bidding Strategies for Google Adwords

A yellow forklift pushing three wooden blocks spelling "BID"

Manual bidding or automated bidding?

That’s a question many advertisers ask themselves when faced with a new campaign. But with so many options, it can be difficult to choose the right one.

In this article, I will look at each bidding strategy and what they offer.

What is a bidding strategy?

A bidding strategy is a campaign with a specific focus, dependent on a two primary criteria:

  • The networks your campaigns are targeting (Display or Search)
  • Your focus: clicks, impressions, conversions or views

The idea behind these strategies is that they help you to accomplish specific goals depending on what your target audience is. You can use them to get a higher click rate, making a better impression, or increasing your conversions. There are a variety of different bidding strategies available for you to use, and it’s important that you understand all of your options so that you can choose the one that’s best for you.

Read: Your Online Advertising Jargon Buster

Different types of bidding strategies

1. Target CPA (Cost Per Acquisition)

If you want to optimize your conversions, then this could be the solution for you. This type of strategy will focus on trying to create more conversions at a specific acquisition cost.

Google Ads will automatically set your bids based on your average CPA. If you don’t know your acquisition costs, then this could be a problem. Your CPA is the amount of money that you can afford to spend on one customer.

2. Target ROAS (Return On Ad Spend)

Google Ads will set your bids to maximize conversion value based on the return that you are looking for from your ad spend. It involves a bit of maths to work out, but if you can get there, then it can be quite helpful.

You calculate a Target ROAS like so:

(Sales ÷ ad spend) x 100

You can even use previous campaigns to help you decide what your percentage should be if you aren’t sure.

3. Target Impression Share Bidding

Target Impression Share Bidding is one of the newer bidding strategies around. It replaced Target Search Page Location and Target Outranking Share in June 2019. Advertisers set a goal impression share percentage, like the way you would for a target CPA. You get three choices for ad placements:

  • Absolute top of the page
  • Top of the page
  • Anywhere on the page

Google will then adjust your bids following this.

Note: Impression Share only includes the Google Search Network.

4. Maximize Clicks

Maximizing Clicks is an automated strategy that sets your bids to get as many clicks as it can within your specified budget. It’s arguably the simplest way to gain clicks, as Google Ads does most of the work. What’s more, you don’t need to set bid amounts for your ad groups, keywords or placements.

5. Manual CPC Bidding

If you’d prefer to do things manually, there’s Manual CPC Bidding. This strategy allows you to set your own maximum CPC. If you use this type of bidding, you get complete control over all of your bids, and you can set the maximum amount that you could pay for each click on any of your ads. It gives you a level of control that you can’t get through automated systems.

6. Enhanced Cost Per Click (ECPC)

Enhanced CPC is a partially automated bidding strategy that works by automatically adjusting your bids. The strategy is based on clicks and their probability of leading to a sale or conversion. ECPC tries to keep your average CPC below the max that you have set, and it works best when coupled with conversion tracking.

7. CPM Bidding (Cost Per Thousand Impressions)

This type of bidding is based solely on impressions. YouTube campaigns like TrueView and Display Network are the only things that this option can help. You can’t use it on a Search Network as it is a display only bid strategy.

8. vCPM Bidding (Cost Per Viewable Thousand Impressions)

Like the option above, this is a manual display-only bid strategy. It is there to let advertisers bid for impressions when your ad is triggered. If you are trying to expand your brand and you want people to know your message, this is an excellent choice based on viewability. Google will aim to maximize the number of viewable impressions your ad receives, which works best with a finite audience.

Viewable CPM bidding (vCPM) means only paying for ads when they’re seen. While CPM bids get converted to vCPM automatically, it’s recommended to manually update bids. For more info, check out Google Ads help page on vCPM.

9. CPV Bidding (Cost Per View)

You will pay for video views and other video interactions when you use this type of bid. It is the way that many people set the amount that you will end up paying for your TrueView video ads. CPV Bidding covers any clicks on call to actions that take them straight to your business website.

To do this, you enter the maximum that you want to pay per view for your ad group in a video campaign. The max bid then applies to all ads in the group.

Further resources

Summary

As you can see, there are so many bidding strategies that you can use to enhance your marketing in some way. Each strategy has its pros and cons, so it is going to depend on what you are hoping to achieve as to which bidding strategy you should choose.

Take your time and look through all of the options to give yourself the best chance of success. These only work well when they are evaluated and chosen wisely. Bidding strategies are not a one size fits all solution, so make sure you are checking on them frequently to ensure they are still accomplishing what you set out.

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