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Google Ads Bidding Strategies That Can Maximize Your Advertising Budget

Google Ads is a pay-per-click advertising platform that puts you in control of the amount you wish to spend. It also allows you to choose how and where you wish to spend it. In a nutshell, you bid on the keywords that people search for. This gives you the opportunity to show ads in Google search results. You then pay the preset amount you bid when someone clicks on your ad. Sounds easy, right? There are twelve different Google Ads bidding strategies. So, how do you choose the one that is the right fit for your business? Not every PPC strategy brings the same outcome, and you need thorough planning and monitoring to find a strategy that will maximize your Google Ads budget. This could potentially help you to connect with a new audience online.

Set your goals first

To effectively set your budget, you need to determine what you want to accomplish by advertising online:

  • Do you wish to draw more traffic to your website?
  • Do you wish to get in touch with more locals?
  • Do you wish to build awareness of your business or brand?
  • Do you wish to do that in a particular location, or among certain customer demographics?

Having an idea of the results you are going for will help you decide on your goals. Only then should you try different strategies to help you meet those goals, and make the most of the budget that you have set. In this text, we will explain each of the bidding options available. We will also suggest the best ones depending on the goals of your campaign.

Google Ads bidding options

There are twelve different bidding options you can use:

  • Target CPA (cost per acquisition)
  • Target ROAS (return on ad spend)
  • Maximize Conversions
  • Enhanced Cost Per Click (ECPC)
  • Maximize Clicks
  • Manual CPC Bidding
  • Target Search Page Location
  • Target Outranking Share
  • CPM Bidding (cost per thousand impressions)
  • vCPM Bidding (cost per viewable thousand impressions)
  • CPV Bidding (cost per view)
  • Target Impression Share Bidding

Target CPA

This is the bidding strategy to use for optimizing conversions. In other words, if driving conversions is the goal of your campaign, this option will focus on trying to convert users at a specific acquisition cost.

Cost Per Acquisition is the amount of money you are willing to spend on acquiring one customer. By selecting this option, Google Ads will automatically set your bids across your campaigns based on your CPA. Some conversions may cost more, some less, but it evens out.

When setting your CPA, you need to keep in mind the price you can afford to pay. Keep a realistic perspective when setting your targeted CPAs. If you set your CPA at $30, but the products you sell are also $30, you haven’t priced your CPA accordingly. You want profits, not a break-even situation. 

 

Target ROAS

All right, this one is a little tricky, so stick with me. Target ROAS is the bidding strategy where Google Ads sets your bids to maximize percentage-based conversion value based on the return you want from your ad spend.

This complicated sentence will become more clear through a real-life example. Let’s say that you want to generate $10 for every $2 that you spend. You divide $10 by $2, multiply it by 100%, and you get your ROAS (500%). 

Sales ÷ ad spend x 100% = Target ROAS

This is how it looks in Google Ads:

Since this all sounds complicated, you can look at your previous campaigns, choose the top-performing one, and use that number as your Targeted ROAS. But first, you will need to add one column to them.

Maximize Conversions

Let’s take a break from math, and look at one of the simplest Google Ads bidding strategies. With this option, all you need to do is set the maximum daily budget, and Google will run your bidding. This will get you the most conversions possible for the amount you determined. Google will use the money you dedicated wisely, so it won’t spend your entire budget on one conversion. At the end of the campaign, you should check your return on investment to see if this strategy paid off for your business. Here is a look at it:

Enhanced Cost Per Click

This type of bidding is restricted to the Search and Display networks. Using Smart Bidding, Google makes all the calls. It will increase or decrease your bids based on the likelihood of driving the sale. 

Competitive searches with high CPC have less chance of converting, so Google will lower your bid since you don’t want to pay a high price for the click that won’t convert. Conversely, if increasing the bid has a high chance of bringing a conversion, Google will do so.

Maximize Clicks

This is also an automatic bidding strategy. You set your maximum daily budget, and Google uses it to drive as many clicks as possible. It is as simple as that.

Manual CPC Bidding

If you like to have full control over your bidding strategy, or perhaps don’t trust Google’s algorithms, this is the option for you. However, you should be ready to spend more time monitoring and adjusting costs.

With Manual CPC, you can set bids for different ad groups on your own. This gives you the option to assess which campaigns are performing better and add budget while removing it from those less successful. You can also combine Manual CPC with ECPC. This way you can manually control budget while Google adjusts your bids based on the chance of converting. Did we mention that this is our favorite bidding strategy?

Target Search Page Location

This strategy will let Google adjust bids so that your ads will show on the first page of Google search results, or the first four places of the first page. While Google says that this strategy doesn’t guarantee placement, with good quality scores you shouldn’t have any issues.

Target Outranking Share

This is yet another one of the automatic Google Ads bidding strategies that is based on outranking a website or competitor that you specify. If your ads and your competitor’s ads are displaying, Google will increase your bids to outrank your competitor. In case your competitor is not showing ads, Google will still show yours. These are your options with this strategy:

You need to enter the domain name you wish to outrank, the percentage of times you wish to outrank the competitor, as well as the amount of money you don’t want Google to bid above. Keep in mind that the higher percentage you set, the more likely you are to pay a higher cost for a click due to increasing bid costs.

Cost Per Thousand Impressions (CPM)

This is a bidding option based solely on impressions, and is reserved for the Display Network and YouTube campaigns, not for the Search Network.

Cost Per Thousand Viewable Impressions (vCPM)

This is a manual bidding tactic based on setting maximum costs on a viewable 1000 impressions. It is also reserved for the Display Network, and is great if your campaign aims to raise brand awareness.

Cost Per View Bidding (CPV)

This strategy is reserved for video advertising on Google Ads, and can be used on the TrueView video platform. It is the default bid type setting on this platform. Using CPV bidding, you pay for video views or interactions.

A view counts when someone watches your video ad for 30 seconds, or decides to engage. Interactions can be any of the following:

  • Call to action clicks
  • Overlay clicks
  • Cards
  • Companion banners

You start bidding by entering the highest amount you are willing to pay for a view or interaction. We suggest starting low and adjusting your bids based on the results.  Higher quality scores and ad rank will lower your cost per view, so you will pay less for better results.

Target Impression Share Bidding

Google Ads implemented this strategy near the end of 2018, and it is proven to be great for brand awareness campaigns. 

As you can see, you can specify the percentage of times your ads will show for a specific keyword, as well as the maximum bid limit. However, you should use this with caution as costs can quickly add up in case you specify a high percentage. It is best to use this bidding type for cheap keywords.

Choose a strategy based on your goals

As we said at the beginning, the most important thing for a successful campaign is determining goals early on. So, let’s assume you have done that. Since we can not read your mind here at Chicago PPC agency, let’s use some of the most common goals, and list the most valuable Google Ads bidding strategies for each:

  • ConversionsMaximize ConversionsTarget CPATarget ROASTarget Outranking Share
  • Website trafficMaximize ClicksTarget Search Page LocationManual CPC Bidding
  • Brand awarenessTarget Impression Share BiddingTarget Search Page LocationTarget Outranking ShareCPM and vCPM (for raising awareness on YouTube and Display Networks)

These suggestions are based on our experience. As you get more familiar with Google Ads, you should feel free to experiment with different bidding strategies strategies until you find the combination that is the best fit for your campaigns.

Smart Tricks For Increasing Sales

Set bidding automation rules

Although monitoring bids is crucial if you wish to maximize conversions for as little money as possible, you are probably not going to spend all day looking at Google Ads. Luckily, Google Ads has a Rules option where you can set up notifications, pause campaigns, or adjust bids. Everything automated, no effort at all.

Jump-start bidding

Instead of playing it safe with lower bids that you would increase in time, you can start aggressively from the beginning. You can use the Keyword Tool on Google to analyze top page bids, and bid higher than the current top position for a few weeks. It will cost you more money at the beginning, but it will also show your ad in the top spot on the Search Results page. This will drive more clicks and ultimately improve your Quality Score. As the score goes up, your expenses go down. After a while, you can decrease your bids to match the second position. You should notice that your costs drop dramatically, while position and performance metrics still thrive. Here is how the keyword tool settings look:

Adjust bids by demographics

As your campaign targets multiple demographics, it probably won’t be to everyone’s appeal. Luckily, you can customize bidding based on demographics. This will allow you to spend your money where it is performing the best – on those demographics with high click-through rates and performance.

google ads bidding strategies

Once you notice this trend, select the top-performing demographic and adjust bids manually.

The better they perform, the more you want to increase bids.

Final thoughts

At first glance, bidding on Google Ads sounds complicated. You may even feel overwhelmed at the complexity involved in the strategies. Don’t let yourself get discouraged. Instead, recognize that setting aside a budget for Google Ads can have a positive impact. Even a small amount spent on Google Ads can assist your business in reaching its goals. Be savvy about your ad expenditure and apply the tips we just covered. Take your time, don’t be in a rush. Monitor what strategies you implement. Keep what works, and don’t be afraid to tweak your ads should you hit a wall. Keeping these things in mind will allow you to make the most of your online marketing investment. 

Brian Djordjevic
About The Author

Brian Dordevic

Bojan is Marketing Strategic Planner with a passion for all things digital. Feel free to follow him on Twitter or schedule a consultation call with him.

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