The twelve Google Ads bidding strategies you need to know.
Google offers a range of different bidding options for your ads, depending on what matters most to your business.
The main metrics advertisers focus on are clicks, impressions, conversions and views for video ads.
But while the specific scenarios of when to use which bidding option vary from campaign to campaign, it is helpful to go over the basics of each bidding strategy, when to use them and when to avoid them.
This will ensure that those ads you create will be shown to the right people at the right times.
Here we give a quick overview of the twelve main bidding strategies in Google Ads.
1. Target Cost Per Acquisition (CPA)
Target CPA bidding is a bidding strategy you use to optimize conversions. You simply set the acquisition cost you would like to convert users at, and Target CPA will target this metric.
Target CPA is an automated bidding strategy. This means Google ads will set your bids for each campaign themselves. Some conversions will cost more and some less in order to even out with your requested acquisition costs.
When not to use Target CPA: If you don't have an idea of your acquisition costs might be, Target CPA will not be effective.
The standard way to calculate CPA is to look at how much your product costs and set it for something lower. In this way you can scale your Google Ads.
The problem is often the cost to acquire a costumer will be much higher than the price of your product, and this might mean going back to the drawing board regarding your product and seeing what you can make or sell that justifies the CPA.
Your Cost per Acquisition is simply the amount of money you can afford to spend on acquiring one customer.
2. Target Return on Ad Spend (ROAS)
Target Return on Ad Spend involved some calculations that can throw some people off.
Target ROAS is the bidding strategy where Google Ads will set your bids to maximize conversion value based on the return you want from your ad spend.
For example, if you want to generate $10 for every $2 spent, then the formula to figure out ROAS would be as follows:
Sales ÷ ad spend x 100% = Target ROAS
Plugging in the numbers above would give the following:
$10 in sales from campaign ÷ $2 ad spend (clicks) x 100% = 500% target ROAS
3. Maximize Conversions
Maximize Conversions is one of the simplest bidding strategies that Google Ads offers.
All you do is set a maximum daily budget and Google automatically runs your bidding for you to the most conversions it can at that price.
If you set your daily budget at $100, Google will spend it throughout the day to find the most conversions.
Whenever using this bidding method, make sure to double check that you put in the appropriate amount. All too often marketers will add an extra zero or forget a period, and all of a sudden get surprised when their marketing budget for the month got used up in one day.
Maximizing conversions is a good way to figure out how profitable your Google campaigns are. At the end of each month, it is important to check back on your campaigns and see how many sales you got. Then adjust accordingly.
4. Enhanced Cost Per Click (ECPC)
Enhanced CPC gives Google the right to increase or decrease your bid amount based on the likelihood of driving a sale.
Bids will mostly be averaged out at your max cost per click settings. This means if it is CPC is too high on a keyword, Google will lower your bid to cost less because the likelihood of a conversion is too low.
This type of bidding is restricted to the Search and Display networks.
5. Maximize Clicks
Maximize Clicks is an automatic bidding strategy based on your maximum daily budget.
It's pretty straightforward. Google Ads will attempt to drive the most clicks possible with the daily budget you set in place.
6. Manual CPC Bidding
Manual CPC Bidding gives marketers more control over bidding strategy. Back in the day manual bidding was the only way to do Google Adwords.
In recent years Google has developed its smart bidding strategies and is slowly wresting control away from PPC marketers.
Nevertheless, Manual CPC can be a good way to control your spending if you don't trust Google.
The downside is more control means more time spent monitoring costs and making optimizations.
When not to use manual CPC?
If you are just starting out with Google Ads, this strategy will get too complicated.
Manual CPC requires you to set bids for different ad groups. If a specific campaign turns out to be more profitable than others, it's up to the marketer to move money to that campaign.
7. Target Search Page Location
TSPL (Target Search Page Location) bidding is the strategy of letting Google automatically adjust your bids to always show your ads on the first page results of Google.
While Google has the disclaimer that this strategy “doesn’t guarantee placement,” you won’t have issues if your quality scores are solid.
8. Target Outranking Share
Target Outranking Share is another automated bidding tactic that’s perfect for competitor targeting on Google Ads.
You can choose a specific website or competitor that you want to outrank.
When your ads and your competitor’s ads are both displaying, Google will increase your bids to outrank their ads.
Google also will show your ads when your competitor isn’t showing up to give you better brand awareness.
Here are your options when selecting this bid strategy:
Let’s break it down.
First, select the domain name you want to outrank. Focus on your biggest competitor, those that you notice more often on Google Ad results.
Target to outrank is the percentage of times you want to bid to rank on top of them.
For instance, setting it at 90% would mean that you want to outrank them 9 out of 10 auctions.
Keep in mind: the higher your percentage settings, the more you likely will pay per click due to jacking up bid costs.
9. Cost Per Thousand Impressions (CPM)
Cost per Thousand Impressions, otherwise known as CPM, is bidding solely based on impressions.
This option is reserved for the Display Network and YouTube campaigns like TrueView and is not for use on the Search Network (for obvious reasons).
10. Cost Per Thousand Viewable Impressions (vCPM)
vCPM bidding is a tactic of manual bidding best reserved for brand awareness campaigns.
Again, like CPM bidding, it is reserved for the Display Network.
This bidding type is setting your maximum costs on a viewable 1,000 impressions.
11. Cost-Per-View Bidding (CPV)
Cost-per-view bidding is strictly reserved for video advertising on Google Ads, and can be used on the TrueView video platform. Using CPV bidding, you pay for video views or interactions.
Interactions on the TrueView platform could be any of the following:
Call to action clicks
A “view” is determined by how long someone watches your video ad for, otherwise known as the duration. In this case, with CPV bidding, a view is counted when someone watches 30 seconds of your ad, or whenever they decide to engage!
CPV is currently the default setting for bid type on TrueView advertising.
12. Target Impression Share Bidding
Target Impression Share is a new bidding strategy released in late 2018 by Google Ads.
This smart bidding strategy is focused on brand awareness and helping you reach as many people as possible.
As an example, if you are looking to dominate impressions for specific keyword searches, like basketball shoes, you can ensure your ads show up 100% of the time on SERPs by selecting 100% as your target impression share.
Not sure which of these twelve bidding strategies are right for your Google Ads campaigns? Try Aori's smart bidding solutions to see if they get you better results.