Which Google Bidding Strategy Should You Use and Why?

Which Google Bidding Strategy Should You Use and Why?

by Andrea Knezovic

To give you the best answer to this question, first, we need to explain all Google Bidding strategies that are available at the moment. Since there are quite a few, we won’t dive deep into each specific Google bidding strategy. Instead, we’ll share some basic concepts so you can decide which Google bidding strategy will be the best choice for your business goals.

Google Ads platform can automate the way you do your online advertising in a way that will boost your efficiency. If you are just starting out, you might want to consider strategies that will allow you to have more control over your ad spend.

Did you know that 96% of brands are present on Google Ads? This comes as no wonder since this platform is the biggest provider of search advertising on the market. Not only that, but its Display Network reaches 90% of global internet users. 

Google Bidding Strategy Goals

Now, before you start, there is an important question for which one you have to have a clear answer before making your first Google Ads campaign.

What Is Your Business Goal?

Or even better; what is your current business goal that you want to achieve with advertising on Google? If you don’t have a clear answer, here is the list of the most common goals from which you can determine what (bidding) strategy will be the best choice for you.

Driving More Conversions

Whether your goal is to have more subscribers to your newsletter, e-book downloads, or sneakers sold on your web-shop, they all can be measured as a conversion. Without having conversion tracking in place there is basically no sense in starting online advertising if your goal is to drive more conversions.

You would be just running through the dark as you can’t see what’s working and what’s not. With specific campaign types, like Google Smart Shopping Campaigns, you’ll be able to drive more traffic to your website and increase conversions.

Driving More Traffic to Your Website

You might have multiple goals on your website so driving more traffic is something that you can definitely do and optimize within Google Ads in order to get the best possible quality for the lowest possible price.

Brand Awareness

So, you are soon launching a local event that you want to everyone know about? If you have a strong budget, Google will definitely be your best friend by letting everybody know.

Hopefully, these most common examples gave you a better understanding of what your goal is or could be, so now we can dive into Google bidding strategies.

First, we’ll explain strategies based on CPC (cost per click) then smart bidding, and finally, strategies based on video views, impressions, and interactions.

Bidding Strategies for Driving More Traffic to Your Website

Manual CPC

Best choice if you want to gain more traffic to your website. The ability to control how much you want to spend per click on your AD and to actually be able to set different CPC per ad group is a great way to start with Google Ads while having full control over your advertising.

Once you realize which AD groups are the most profitable, you can allocate more of your budget to them by shutting down others or simply lowering their CPC.

However, there are some downsides to this bidding strategy. If you’re looking to spare time and have access to detailed reports then this strategy isn’t the best choice. It is highly time-consuming because every change is done manually. Also, when it comes to reporting, Google is able to show more data for automatic bidding strategies.

google bidding strategy
Manual CPC bidding strategy.

Maximize Clicks

Automated and straightforward bidding strategy where Google Ads System manages your bids to provide you with as much traffic as possible. There are not many occasions where you should use this bidding strategy, but if you are in a hurry of filling your campaigns with data and your website with traffic, this is a way to go. You can also use this strategy if you notice the keyword search volume in your campaigns is low. 

This is not a bidding strategy you should use if you’re just starting out and want to get conversions. On the other hand, websites that have sufficient conversion rates could benefit from this strategy.  

Maximize clicks bidding strategy includes a bid limit option which gives you more control over your spend – similar to Manual CPC bidding.

Maximize clicks bidding strategy.
Maximize clicks bidding strategy.

Okay, now let’s assume that you’ve just released a brand-new e-commerce website. Your goal is to drive conversions which are basically purchases of your products. In this case, you want to focus on conversions with Smart Bidding.

Smart Bidding Strategies with a Focus on Gaining Conversions

Target ROAS (Return on Ad Spend)

It requires a robust and stable business model without too many changes that could interfere with Google machine learning. Target ROAS is helping you to increase conversion value while targeting specific Returns on the AD spend. 

This bidding strategy is applicable to the campaign level, ad group, and portfolio level. 

With this smart bidding strategy, you won’t be able to use it until you have enough conversion data in your campaigns. That’s why we recommend starting with the rest of the strategies available.

Target ROAS
Target ROAS bidding strategy.

Target CPA (Cost Per Acquisition)

Cost per acquisition can be defined as the amount of money you are willing to spend on getting a single customer.

Google will automatically set your bids based on a specific acquisition cost. Before you even start using this strategy, you must have enough historical conversion data (at least 40 conversions) over the last 30 days. 

For example, if you are selling t-shirts at $15 per unit, you may, for example, set up a Target CPA at $5.

Let’s say that your total cost to produce a T-shirt is a 10$ and your CPA is $5. Any CPA below $5 will be pure profit and of course, any CPA above $5 will be a loss. So, in this case, we would actually aim at a $2.5 – $3 target CPA instead of $5. This way Google knows how much it can bid in order to keep your advertising profitable.

Target CPA
Target CPA bidding strategy.

Maximize Conversions

Simple, smart bidding strategy, but often not so profitable. With this fully automated bidding strategy, advertisers only have to choose their desired goal and set daily budgets. 

Of course, in order to track the effectiveness of this strategy, advertisers have to implement conversion tracking. 

Google will try to get you as many conversions as possible within the set daily budget. However, this will be done without targeting a specific CPA which may lead to a significantly higher cost per conversion.

No, if your daily budget is $40, Google will not spend it on a single conversion. However, it can happen that conversion will cost more than you hoped. Therefore, before you decide on this method, set your daily budget at a level you’re willing to risk. 

Enhanced Cost-Per-Click (ECPC)

This bidding strategy is similar to manual bidding. It will, however, give you a bit of control over your cost-per-click while allowing Google to bid more in cases where it thinks there might be a higher chance for conversion.

Also, if the search is too expensive, and your competitor’s CPCs are ridiculously high, Google will decrease your bid to minimize the chance of converting. 

What advertisers have to track when using this strategy is that both CTR and conversion rate should see an increase.

Within this strategy, you also have the option to optimize bids for conversions. More precisely, you can pick whether you want to focus on conversion volumes or conversion value.

This bidding strategy is available both on Google Search and Google Display.

Enhanced cost-per-click (ECPC) bidding strategy.
Enhanced cost-per-click (ECPC) bidding strategy.

Target Impression Share

This is another smart bidding strategy where you let Google bid for you with the goal of showing your ad on the top, absolute top, or anywhere on the first Google search result page.

In this case, Google will bid for a specific search term to outrank other advertisers. If you are selecting to outrank 100% of your competitors’, the cost will add up fast.

This strategy gives you a certain amount of control, so make sure you set a maximum CPC bid. After setting a maximum CPC, you will need to track performance and adjust it accordingly. Besides your bid, note that your ad quality scores also affect your impression share. 

Finally, keep in mind that all those impressions are no guarantee that your ad is even seen since it can be placed in lower positions.

Target impression share bidding strategy.

For starters, we suggest either ECPC or Target CPA Google bidding strategy.

If your goal is not oriented around generating clicks that will lead to conversions, then the following bidding strategies might be a solution to stick with. In most cases, you’ll use them if you want to raise awareness around your brand, product, service, local event, or whatever you need to promote.

Best Google Bidding Strategies for Raising Awareness

Cost-Per-Thousand Impressions (CPM)

You’re paying based on the number of impressions that will be serving on the Google Display Network and YouTube.

Cost-Per-Thousand Viewable Impressions (vCPM)

This bidding strategy is a good choice for brand awareness campaigns. Similar to CPM strategy, where the only difference is that Google is charging you for the 1000 viewable impressions (ads which are not only served but actually viewed) on the Display Network. YouTube is not included.

Cost-per-thousand viewable impressions (vCPM) bidding strategy.
Cost-per-thousand viewable impressions (vCPM) bidding strategy.

Cost-Per View (CPV)

Available only on YouTube, which is charging for video views and interactions.

What counts as interactions? They include clicks to call to action buttons, companion banners, cards, and overlay clicks.

A view is defined as the length of time a user watches your video ad, also known as the duration. When it comes to CPV bidding, a view is when someone watches 30 seconds of your ad or your entire ad if it’s shorter than 30 seconds. Another thing that counts in as a view is when users engage with your ad.

When you start advertising on Youtube, CPV is the default bid setting. It allows you to enter the highest bid you want to pay for a single interaction. This is called a “maximum cost per view”. For example, if you set it to $0.30, this is the highest you will pay for when a user watches your ad until the end.

This is an effective way of bidding if you are a large company trying to push a new product. An example of this would be the launch of new flagship mobile phones from Samsung, Apple, Huawei. They use a lot of CPV bidding to raise awareness.

Out of Use Google Bidding Strategies

You may have heard of two Google bidding strategies that are no longer in use: Target Search Page Location and Target Outranking share. Both of these strategies were removed from Google Ads in June 2019.

The bidding option which replaced both is Target Impressions Share.

To Sum Up on Google Bidding Strategies

Bear in mind that these strategies are just a glimpse of what needs to be understood to run a Google Ads campaign effectively. There is a lot more to cover which we will be doing in our future blog posts. We hope this one will hopefully give you an idea of where to start when choosing a bidding strategy.

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About Udonis

Udonis is an independent full-service mobile marketing agency that acquired more than 200,000,000 users for mobile games since 2018. Visitudonis.co

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