Google Ads Bidding Strategies: Complete Guide 2024

When you create Google Ads campaigns, you enter an auction every time your advertisement is shown. If there is an auction, that means there are bids as well. Since there are so many Google Ads campaign objectives and campaign types, there are different bid strategies you can choose from, including automated bid strategies and automated bidding strategies to optimize ad performance. In the video below and the article, I will cover all of the different Google Ads bidding strategies and options that you can choose from.

Keep in mind, your bid strategy should match the goal of your campaign. I would highly recommend using Smart Bidding strategies that are focused on driving conversions and revenue.

Understanding Google Ads Bidding

Google Ads bidding is a complex process that requires a deep understanding of the auction-based model. It’s essential to comprehend how Google Ads bidding works to make informed decisions about your ad spend. When you set a bid for each ad, it determines the ad’s placement and visibility. However, the bid is just one factor that Google considers. Other critical factors include ad relevance, landing page quality, and the user’s device and location. By understanding these elements, you can better strategize your ads bidding to maximize your campaign’s effectiveness.

How Google Ads Bidding Works

Google Ads bidding operates through an auction-based system. When a user searches for a keyword, Google Ads runs an auction to determine which ads to display and in what order. This auction considers several factors, including your bid, ad relevance, and landing page quality. Interestingly, the highest bidder does not always win the auction. Instead, Google Ads uses a sophisticated algorithm to determine the winner based on the overall quality and relevance of the ad, ensuring that users see the most pertinent ads. This approach helps maintain a high-quality user experience while allowing advertisers to optimize their google ads bidding strategies effectively.

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Google Ads Bidding Strategies

Below is the complete list of Google AdWords bid strategies. Some options require conversion tracking, and some are only available for certain campaign types.

Target Cost Per Action or Target CPA

You can target how much you want to pay for each conversion on your website. Target CPA Bidding is an automated bidding strategy aimed at optimizing conversions while maintaining an average cost per action. For example, if you want to drive conversions at a cost/conversion of $25 or less, then you can set your Target CPA at $25. Google Ads will automatically optimize your bids based on your targeting to try to deliver your business conversions at $25 or less.

Target Return on Ad Spend or Target ROAS

You can target the revenue return as a percentage based on your ad spend. For example, if you need $3 in revenue for every $1 in Google Ads spend, then you would set your Target ROAS at 300%. Google Ads will automatically optimize your bids based on your target to try to deliver your business a 300% ROAS or better.

Maximize Conversions

Google Ads considers your targeting and your budget to try to drive the most conversions possible within your budget. You do not set any targets or any bids.

Maximize Conversion Value

Google Ads considers your targeting and your budget to try to drive the most conversion value as possible within your budget. You do not set any targets or any bids.

Enhanced Cost Per Click or ECPC

If you are using Manual CPC bidding along with conversion tracking, you can choose to use Enhanced CPC. Google Ads will automatically raise or lower your bids to make you more competitive or less competitive in auctions. Google Ads adjusts your bids based on the probability that a conversion is going to happen based on the search term and other factors.

Maximize Clicks

Google Ads considers your targeting and your budget to try to drive the most clicks as possible within your budget. The bid strategy is completely automated and you do not set any bids or targets.

Manual CPC

If you’ve used Google AdWords for the last decade then you know Manual CPC quite well. It is the manual bidding strategy that allows you to set different bids for individual keywords, placements, or bids for your ad groups. Manual CPC bidding gives you more control over your cost per click, but it doesn’t take into account conversions.

Target Impression Share

If there are keywords that are vital for your business, you can target a specific impression share. You can choose to bid for the first position, the top slot of ad positions on the first page, or anywhere on the first page.

Target CPM or tCPM

With this bid strategy, you’ll pay based on the number of impressions (times your ads are shown) that you receive on YouTube or the Google Display Network.

Viewable CPM or vCPM

This is a manual bidding strategy you can use if your ads are designed to increase awareness, but not necessarily generate clicks or traffic. It lets you set the highest amount you want to pay for each 1,000 viewable ad impressions on the Google Display Network. vCPM bidding probably isn’t for you if the goal of your campaign is a direct response from customers, like buying a product or filling out a form

Cost-Per-View or CPV

If you run video ads, you can use cost-per-view (CPV) bidding. With CPV bidding, you’ll pay for video views and video interactions, such as clicks on the calls-to-action overlay (CTAs), cards, and companion banners. You just enter the highest price you want to pay for a view while setting up your TrueView video campaign.

Choosing the Right Bidding Strategy

Choosing the right bidding strategy is crucial to achieving your Google Ads goals. There are several bidding strategies to choose from, including manual CPC bidding, automated bidding, and smart bidding. Manual CPC bidding gives you control over your bids, allowing you to set different bids for individual keywords, placements, or ad groups. On the other hand, automated bidding uses algorithms to optimize your bids based on your campaign goals and performance data. Smart bidding, a subset of automated bidding, focuses on optimizing for conversions or conversion value, making it ideal for campaigns aimed at driving specific actions.

When selecting a bidding strategy, consider your campaign goals, budget, and the volume of traffic you expect. For instance, if your primary objective is to drive conversions, smart bidding strategies like Target CPA or Target ROAS can be highly effective. Conversely, if your goal is to increase website traffic, a manual CPC bidding strategy might be more suitable. It’s essential to test different bidding strategies to find what works best for your business, ensuring that your google ads bidding aligns with your overall marketing objectives.

Optimizing Ad Spend with Bid Strategy

Optimizing ad spend with bid strategy is crucial to achieving your Google Ads goals. By choosing the right bidding strategy and adjusting your bids accordingly, you can optimize your ad spend and achieve better results. Here are some tips for optimizing ad spend with bid strategy:

• Use bid adjustments: Target specific devices, days of the week, times of day, and geographic locations to ensure your ads reach the right audience at the right time.
• Set up automated rules: Automate the process of pausing, enabling, and changing bids and/or budgets based on specific parameters to maintain optimal performance.
• Leverage Google Ads scripts: Automate bidding activity based on specific time intervals and metrics, saving time and improving efficiency.
• Evaluate keyword value: Regularly assess the value of each keyword and adjust bids accordingly to ensure you’re investing in the most profitable terms.
• Account for seasonal fluctuations: Be aware of seasonal changes in performance and adjust your bids to capitalize on peak periods.
• Consider landing page performance: Optimize your landing pages and consider their impact on your bidding strategy, as a high-quality landing page can improve your ad rank and reduce costs.

By following these tips and choosing the right bidding strategy, you can optimize your ad spend and achieve better results with Google Ads. This approach ensures that your bid strategy is aligned with your campaign goals, maximizing the return on your investment.

Google Ads Bidding Definition

Google AdWords is an auction for advertisers to serve their advertisements to potential customers. A huge part of any auction is a bid. When you set-up your Google Ads campaigns, you will need to choose one of the available bidding strategies for your advertisements. Google takes into account different factors at the time of the auction, including your ad quality score. Your auction-time quality score and your bid will make up your ad rank. You set-up bid strategies for search, display, shopping, and video campaigns. Bidding strategies can optimize for conversion value, conversions, clicks, impressions, video views, or engagement.

What is a Google Ads Bidding Strategy?

The Google Ads auction considers your bid and other auction-time factors that make up your quality score. Your Google bid strategy will determine how much you bid when you enter the ad auction. One factor that makes up your Ad Rank is your bid, so your bidding strategy is the bidding method you choose for your Google Ads advertising campaign. You have to set up a bidding strategy for Search, Display, Shopping, and Video campaigns. Generally, your strategy will be to drive conversions, conversion value, clicks, impressions, video views, or engagement.

Google Ads Smart Bidding Strategies

At the time of writing this blog post, there are four smart bidding strategies available. You can choose Maximize Conversion Value, Target ROAS, Maximize Conversions, and Target CPA.

Google Ads Portfolio Bid Strategies

Once you create a portfolio strategy, it will be stored in your Shared library. This is the central location for managing your portfolio bid strategies and tracking their performance. By clicking on the “tools” menu and next “Shared library”, you can see the portfolio bid strategy option. This tool can be used on Campaigns, Ad groups, and Keyword pages to add items to a portfolio bid strategy.

Portfolio bid strategies let you automatically set bids for multiple campaigns. Create a portfolio bid strategy or see the performance of an existing bid strategy.

How to Set Bid Limits in Google Ads

If you want to control your costs, you can set a maximum and/or a minimum bid for your Smart Bidding strategies. The video below will help you learn more. You can read our full article here and watch this video on YouTube.

In Summary

Bidding strategies are an essential part of your Google Ads campaigns. Setting a bidding strategy and improving your bid strategy can have a positive impact on campaign performance. If you have any additional questions, please leave a comment, and we will answer them.