Choosing the right Google Ads bidding type and implementing a solid bid adjustment strategy is critical to lowering your ad costs.

If you’re not careful, you could end up wasting your entire budget on a few clicks.

However, by making the right moves, you can elevate your campaign’s performance to a new level.

In this article, we’ll go over how to choose the right bid strategy based on your advertising goals.

Recognize Your Goals

Each bid strategy is best suited for specific types of campaigns and advertising goals. For bidding purposes, you should consider five basic types of goals, as well as your current campaign settings.

• If you want customers to take direct action on your site and you’re tracking conversions, you should probably concentrate on conversions. Smart Bidding enables you to do so.
• Focusing on clicks could be ideal if you want to generate traffic to your website. Cost-per-click CPC) bidding may be appropriate for your campaign.
• Focusing on impressions could be a good strategy for increasing brand awareness. To get your message in front of customers, you can use cost-per-thousand viewable impressions (vCPM) bidding.
• If you want to increase the number of views or interactions with your video ads, you can use cost-per-view (CPV) or cost-per-thousand impressions (CPM) bidding.
• If you run video ads and want to increase product or brand awareness, you can use cost per view (CPV).

Increase Conversions with Smart Bidding

Smart bidding is intended to help marketers and businesses make advertising easier and more efficient. It is a resource that automates some processes and employs machine learning to optimise ads for better conversion or higher conversion value each time the bid-process occurs.

To capture the unique context of each search, it also considers a wide range of auction-time signals such as device, location, time of day, language, and operating system.

The five Smart Bidding strategies are listed below.

1. Target CPA (Cost Per Acquisition)

Target CPA bidding is a bidding strategy that can be used to increase conversions. If driving conversions is your primary campaign goal, Target CPA bidding will try to convert users at a specific acquisition cost.

Google Ads will automatically set your bids on each campaign based on your CPA using this method. While some conversions may be more expensive, others may be less expensive in order to balance out and align with your acquisition costs.

If you don’t know what your acquisition costs are, target CPA bidding can be difficult.

Your CPA is simply the amount of money you can afford to spend on acquiring a single customer.

For example, if you sell a $50 product, you should not set your target CPA at $50. When the goal is to profit, that would be breaking even.

When you choose this bidding method, you can enter your desired CPA and you’re ready to go!

2. Target ROAS (Return On Ad Spend)

Target Return on Ad Spend is a bidding strategy that confuses most people.

Why?

Because it needs some math. Yes, math, the dreaded, horrible subject that most marketers avoid.

Unfortunately, math is required for this one.

Target ROAS is a bidding strategy in which Google Ads sets your bids to maximize conversion value based on the return you desire on your ad spend. This figure is a percentage.

You want to generate $10 for every $2 spent on your next Google Ads campaign. To do the math, use the following formula:

Target ROAS = sales / ad spend x 100%

Using the above example, here is what the Target ROAS would look like:

$10 in campaign sales x $2 in ad spend (clicks) x 100% = 500% target ROAS

Simple enough, right?

If you’re still unsure about what percentage to use, you can go back to a previous campaign in Google Ads and change the columns.

Incorporate the following metric into your columns:

Value/cost conversion

As your new Target ROAS, use the number from your top-performing campaigns.

3. Maximize Conversions

Maximize Conversions is one of the most basic bidding strategies available in Google Ads.

Google will automatically run your bidding using the maximum daily budget that you set in order to get you the most conversions for your money.

For example, if your daily budget is $50, Google will allocate it wisely in order to maximise conversions.

Google will not bid on a single conversion if it costs $50.

Before using this bidding method, make sure you’ve set a reasonable daily budget amount that you’re willing to spend.

Check your return on investment at the end of a campaign to see if increasing conversions lead to profitable sales.

You don’t have to enter any information when you use this strategy (aside from your daily budget).

4. Maximize Conversion Value

The maximise conversion value strategy works similarly to Target ROAS, with the Google Ads algorithm attempting to maximise the return on your ad spend.

The difference is that you don’t have to specify a target ROI; instead, you simply let the algorithm do its best to maximise all of your ad spend.

5. Enhanced Cost Per Click (ECPC)

Simply put, it’s a hybrid of manual and smart bidding. You specify the initial CPC for your ad groups and keywords, but the algorithm optimises them.

Google reserves the right to adjust your bid amount based on the likelihood of driving the sale. Bids will be averaged at your maximum cost per click settings.

If a search is overly competitive and CPCs are exorbitantly high, Google may lower your bid to save money due to a lower likelihood of conversion.

If increasing bids is an easy way to steal, Google will make the decision.

Both the Search and Display networks support this type of bidding.

You can specify whether you want the algorithm to improve your set bids based on a fixed number of conversions or to optimise for conversion value.

This will only work if you’ve set up multiple Google Ads conversions with different values, or if you’ve set up dynamic conversion events that track the total value of a sale.

Increase Clicks with CPC bidding

There are two cost-per-click bid strategies to consider if you want to gain clicks to drive traffic to your website:

1. Maximize Clicks

Maximize Clicks is an automated bidding strategy that is based on your daily maximum budget.

Google Ads will try to get as many clicks as possible with your daily budget.

It does not take into account the quality or relevance of the traffic and is not suitable for driving sales or other conversions.

If you have a small budget or a low search volume for the keywords in your campaign, maximise clicks is the best option.

2. Manual CPC Bidding

Manual CPC Bidding allows you to have greater control over your bidding strategy. However, having more control means spending more time monitoring costs and adjusting on your own.

If you aren’t familiar with Google Ads, this strategy isn’t for you.

Manual CPC is when you set your own bids for different ad groups or keywords. If certain search terms outperform others, you can quickly adjust budgets to add or remove money from other campaigns.

It is a lot of work if you have a diverse campaign with a lot of ad groups and keywords. You may also find yourself bidding on a large number of clicks that are unlikely to convert.

There will be a warning that the campaign may result in poor performance, but if you have no data to work with or a very limited budget, it may be the best option.

Increase Visibility 

If you want to focus on visibility, you can use one of the bid strategies listed below to help maximise visibility:

1. Target Impression Share

Target Impression Share is a smart bidding strategy that focuses on brand awareness and helping you reach the maximum number of people.

For instance, if you want to dominate impressions for specific keyword searches, such as formal shirts.

Enter your desired impressions percentage.

Remember that the percent impression share is a goal that is influenced not only by your bids, but also by the quality score of each individual Google ad group and ad.

Even if you aim for 90% or 100%, you’re unlikely to meet that target unless you drastically overbid for views and clicks.

Impression counts do not guarantee that your ad will be seen or clicked because it may appear in a lower ad position.

Target Impression Share is typically used for your own branded search campaigns and a small number of key search terms for your brand.

2. CPM Bidding (Cost Per Thousand Impressions)

Cost per Thousand Impressions, or CPM, is a method of bidding that is solely based on impressions.

This option is only available on the Display Network and YouTube Ads and cannot be used on the Search Network (for obvious reasons).

3. vCPM Bidding (Cost Per Viewable Thousand Impressions)

vCPM bidding is a manual bidding strategy that is best suited for brand awareness campaigns.

It is reserved for the Display Network and YouTube Ads, just like CPM bidding.

This bidding type limits your maximum costs to 1,000 viewable impressions. After 2 seconds of a video ad on YouTube or 1 second of a display ad on the Display Network, it counts as a viewable impression.

Increase Views or Interactions (for Video Ads Only)

1. CPV ( Cost-Per-View Bidding (CPV)

Cost-per-view bidding is only available for video advertising on Google Ads, but it can be used on the YouTube Ads as well. CPV bidding allows you to pay for video views or interactions.

Interactions on YouTube can take the following forms:

• Clicks on calls to action
• Clicks on the overlay
• Companion banners 
• Cards

A “view” is determined by the length of time someone watches your video ad, also known as the duration. In this case, with CPV bidding, a view is recorded when someone watches 30 seconds of your ad, your entire ad if less than 30 seconds, or whenever they interact with your ad!

The default bid setting for YouTube Ads is currently CPV.

Let me show you how it works.

To begin CPV bidding, enter the highest bid you’re willing to pay for a view or interaction. This is referred to as your maximum cost-per-view.

For example, if you set your maximum CPV to $0.25, you’d pay no more than 25 cents when a user watches your ad or clicks on your call to action.

So, how do you decide what your CPV should be?

• Begin low and gradually increase based on your results.
• Prioritize increasing your quality scores and ad rank, as these will lower your cost-per-view, allowing you to pay less for better results.
• Increase your CPV gradually to broaden your audience reach.

Best Practices for Selecting the Right Bidding Strategy

Follow these 4 Best Practices to ensure you’re on the right track:

• Instead of choosing a bidding tactic at random, choose one based on your campaign’s goals and volume.
• For a few weeks, experiment with different bidding strategies (via A/B tests) to see how performance changes.
• Conversions, conversion rate, cost per conversion, conversion value, and other key performance indicators should be tracked.
• Continue to use the one that produces better results!
• Don’t jump from strategy to strategy in an unoptimized campaign, hoping for better results.

No bidding strategy will help you if you do not have the right keywords, ad groups, or ads. Check out our Blog 3 title to ensure your campaigns are up to the mark.