Everything you need to know about different bidding strategies (bids) in Google Ads

And how to choose the right bidding strategy for our campaigns

To achieve the best results and optimize their advertising budget, advertisers can use different types of bidding strategies provided by Google Ads. The different bidding strategies depend on your individual goals.

Choosing the right strategy and implementing it are crucial. You can dramatically reduce your advertising costs if you choose the right bidding strategy and implement it effectively. However, to do this, you need to be well versed with the different strategies, tricks and their modus operandi. Otherwise, you're just wasting your entire budget in exchange for a few clicks.

Studies show that changing the bidding strategy can lead to noticeably increased campaign conversion. Bidding strategies are categorized into two main sections - automated and manual.

This article will walk you through them and help you choose the best one for your specific requirements.

What is Google Smart Bidding?

Google's smart bidding refers to strategies that use machine learning to optimize for conversion value. The most common smart bidding strategies are target CPA, target return on ad spend (ROAS), maximizing conversions, and maximizing conversion value.

What are bidding strategies in Google Ads?

The bidding strategy is where you set an average for how much you're willing to pay for each thousand impressions. An effective strategy will help your campaign's unique reach and it will be cost effective. Additionally, you can minimize your costs by using an exclusive bidding strategy.

Types of bidding strategies in Google ads

1. CPC Manual

This is a manually controlled bidding strategy where you can set the cost per click for a keyword or an individual ad group. If specific search keywords are more profitable than others, you can quickly adjust budgets to add or remove budget from other campaigns.

This strategy will give you complete control over your spending, as you can decrease and increase your advertising budget at any time, depending on the performance of your ads. But more control means more time spent monitoring spend and self-correcting.

Also by cutting budget you can lose too much market share in a very short time. You can use this strategy if you have a limited budget and specific target keywords.

2. Maximize conversions

This is an auto-bidding strategy, where the bid is determined based on previous conversions of your campaigns and competitors' auction data. The strategy only works for maximum conversions for the least budget.

With a conversion maximization strategy, you can set a daily budget for your Google Ads. Using the maximum daily budget you set, Google will automatically run your bidding for you to get the most conversions for your money.

Before you choose this bidding method, be sure to check that you have set your daily budget amount at a reasonable level that you are willing to spend. At the end of the campaign, check your ROI to see if maximizing conversions leads to profitable sales.

Using this strategy, you don't need to enter any details at setup (other than your daily budget).

3. Enhanced CPC

In a few words, it's a combination of manual and intelligent bidding. You set the base cost per click for your ad groups and keywords, but the algorithm has to optimize them. Google has the right to increase or decrease your bid amount based on the likelihood of driving a sale. Bids will try to be averaged at your maximum cost per click settings.

If a search is too competitive and the cost per click is extremely high, Google may lower your bid to cost you less due to the reduced chances of conversion, and vice versa. If this turns out to be an easy "steal" of a conversion, the algorithm will increase the bid. This type of bidding is available on both the search network and the display network.

4.Target Impression Share

This bidding strategy focuses on displaying your ad at the top of the designated page. The targeted impression share strategy is extremely effective for brand visibility. Google ads will display your brand name at the top of the page to maximize your company's visibility. This smart bidding strategy is focused on promoting your business and helping you reach as many people as possible.

5. Target CPA

Selecting a target CPA will allow you to determine an average cost per conversion.

Suppose a customer searches for your product or service, then Google Ads uses your target conversion price to calculate the optimal bid based on the auction's likelihood of conversion. If boosting conversions is your primary goal for a campaign, selecting a target CPA bid will focus on trying to convert users at a specific acquisition cost.

With this method, Google Ads will automatically set your bids for each campaign based on your CPA. While some conversions may cost more, others may cost less to align and align with your cost per acquisition.

6. CPV bidding

Bidding for CPV (Cost-Per-View) is the most effective way to calculate the price you'll spend on TrueView. This strategy works for your video advertising on Google Ads. You can use this method if you want to generate quality views for your YouTube ads.

A "view" is determined by how long someone watches your video ad, also known as duration. In this case, when bidding for a CPV display, it counts when someone views 30 seconds of your ad, your entire ad, j.tpo-less than 30 seconds, or any time they engage with your ad.

So how do you figure out what to set as your CPV?

• Start low and adjust based on your results.
• Focus first on maximizing quality scores and ad rank, they will reduce the cost of displaying your ads, allowing you to pay less for better results.
• Slowly increase CPV to increase your audience reach.

7. CPI (cost per install)

Cost per install is another strategy you can choose in Google Ads.

It's used for the universal APP campaign, where the goal is to get more app installs. However, this bidding strategy is only available for mobile app campaigns and is limited to mobile devices only.

If your goals are to promote your mobile apps, this bidding strategy is a good choice.

8. Bidding for maximum value of conversions

This strategy became popular and gained fame due to its specialized features. It allows marketers to optimize ads based on various parameters. Including sales revenue or profit margins. Google will generate bids based on these factors and maximize ROI.

You can use this strategy if you have a payment gateway on your website and if you want to promote your e-commerce site.

9. Target ROAS

Targeted return on advertising spend (ROAS) is an excellent strategy for getting the desired return on investment (ROI). The process is complicated, but fortunately you don't have to do it alone.

Google automatically does it for you - you have to choose the ROI target that will affect the number of conversions you get.

Let us give you a basic example:

10. Maximize clicks

Maximize clicks is an automatic bidding strategy based on your maximum daily budget. Google Ads will try to incentivize as many clicks as possible for the amount you allocate, automatically measuring bids to help you improve and increase clicks within budget.

If you want to increase the number of visitors to your website within your daily budget but also attract quality traffic, this strategy is a good choice.

How to choose the right bidding strategy?

Overall, advertisers who shift their bidding strategy according to target return on ad spend (ROAS) can see 14% more conversion value than target CPA. However, ad spend remains the same.

If you aim to achieve a specific desired return on ad spend (ROAS) across your portfolio of campaigns, you need to set an ad spend ROAS target using a strategy to maximize conversions.

The key to choosing the right bidding strategy for your business's ads is clearly defined marketing goals, budget, and testing different approaches until you determine which works best for you.

In addition to choosing the right bidding strategy, an important step to successful Google Ads campaigns is optimization. If you're incorporating Google's platform into your marketing strategy for the first time and feel uncertain about making the right decisions, turn to us at ADvantage Digital Agency for advice. Request a consultation today and get the results you want.