Google Ads Bidding Strategy – The Complete Guide 2022

Automated Bidding? 

Smart bidding? 

Manual Bidding? 

A bit confusing to choose which works best for your Google Ads campaign. 

Let’s hit the sweet spot straight away. Different Google ads bidding strategies help you to lift your ad performance differently. In addition, claiming the right point on Google ads significantly reduces ad costs. 

To define the right bidding strategies, we’ve streamlined the key elements and bidding options on Google ads 2022 to clearly understand bidding strategies to avoid losing your money. 

Choosing bids is a critical task; if it goes wrong, be ready to lose a massive amount of money on Google ads. But, if you work out a suitable google ads bidding Strategy, I’m sure you can double your money pot 8X times your investment

Why does Google use a Bidding strategy? 

You may wonder why Google has such a bidding strategy, which is much more confusing and difficult for people to relate to. The Google bidding strategy is used whenever the google ad auction is triggered. The ads on the Google search engine run an ad auction whenever a user looks over the search engine. 

Google ads

When the search query is entered and searched, Google runs ad auctions, which analyze the most relevant ad terms, their quality score, and bidding Strategy to determine which ad news to show to the user at which position and then pops out the ad to the user.

Google Ad Auction + Bidding Strategy + Quality score = Google Ads on SERP 

The same operation exists to display ads in which the google ad auction algorithm determines which ad should be displayed for the user at what position. 

Smart Bidding

Simply selecting the bid strategy and entering the maximum bid cost is not the ranking factor to rank your ads. It depends on a lot more considerations, such as, 

  • Ad Content & Creatives
  • Ad extensions
  • Landing page experience
  • Competitiveness of the keyword search
  • Location, device and time of the search
  • Ad relevance

To reduce your ad cost, choose the right ad type and adjust your bids appropriately. Conversion rates can be increased only if you make the right bidding moves.

Google ads bidding Strategy is the tip of the iceberg that determines your ad ranking. 

What is the best Google ad bidding Strategy? 

Honestly speaking, there is no best bidding strategy exists. However, if the best bidding option were provided, all the brands & advertising agents would have crushed their sales targets and skyrocketed their revenue by 100x. 

One size does not fit all. The same works here; one bidding Strategy will not scale your ad whenever running ads. The Google ad algorithm will pull your ad down to rock bottom if you implement the same bidding strategy for all your ad needs. 

There is no best bidding strategy, and results on google ads depend on the individual goals marketers or advertisers need to achieve. 

To clearly learn how Google bidding works, you must understand the different types of Google bidding Strategies for different ad campaign types.

Let’s briefly discuss different types of Google Ad bidding Strategies. 

Google ads Bidding Strategies

1. Target CPA (Cost per acquisition)

Target CPA bidding strategy helps to make conversions based on the set or predefined cost. Each conversion is based on the manual price (Target CPA) applied for every action or acquisition. 

This bidding strategy drives conversion at a specific cost per action. If you’re working to increase the conversion rate or focusing on more conversions below or at a defined expense, then Target CPA works best for your Google ads campaign. With the Target CPA (data), you feed on the google ads manager, work with the google algorithm and convert the audience at a specific cost

Target Cost per conversion

If you’re new to Google ads or just starting your campaign, enter the amount you want to set as the target cost per action or acquisition made for your ads. Then let Google automatically optimize the bidding process while it aims to reach your target CPA at the defined cost. 

2. Target ROAS (Return on Ad spend)

The Target return on Ad spend (ROAS) lets you decide how much return you need to make with your google ads campaign. 

ROAS = Revenue / Total Ad Spent x 100

Google ads return on ad spend formula

If you earn $50 in sales and spend $10 on advertising, you will earn 500% ROAS.

If you are confused about calculating your ROAS, examine your previous ad campaign results. If your revenue is 2 Rupees for every 1 rupee spent on an ad campaign, then your (ROAS) will be 200%. 

Target return on ad spend

3. Maximize Conversions

Focuses only on driving a maximum number of conversions within the limited budget. Therefore, the daily limit will be calculated for the maximum budget you set, and the Google ad algorithm will achieve the highest number of conversions possible per day for your budget. 

The Maximize Conversions bidding strategy aims at getting you the most conversions for your daily budget.

You have to select the Daily ad budget, and the rest will be taken care of by the Google bid optimization technique. 

4. Maximize conversion value 

Maximize conversion value bid strategy operates moreover similarly to maximize conversion bidding. Here, your ad campaign optimizes your bid to achieve maximum ROAS (Return on Ad spend) 

Maximum conversion value

You only have to set the target ROI for your daily ad budget, and Google optimizes your bid to get the best ROAS. 

There is one major difference between the Maximize Conversion value strategy and the Target ROAS strategy: Maximize Conversion Value aims to maximize conversion value.  

5. Target Impression share

Target Impression share bidding strategy helps you to achieve the expected impression result for your ad campaign. In this bidding strategy, Google automatically optimizes your bidding and tries to get the maximum possible impression goal for your ad campaign. 

If you’re going with the Target impression share bidding, you have three options for your ad placements, 

  • Absolute top of the page 
  • Top of the page
  • Anywhere on Google SERP

By setting Target Impression Share, you can tell Google what your maximum CPC bid should be. Achieving an impression share goal will depend on a number of factors, including your ads and ad groups’ quality score. 

6. Maximize Clicks

In Maximize clicks strategy, Google helps you achieve the maximum number of clicks for your daily ad budget. This Strategy would aim to drive as many clicks as possible, which may not be ideal if you want to drive conversions.

This Strategy will not consider certain factors like relevance audience, quality score and proper audience filtering. 

Bidding in this manner may be the best option if you’re on a limited budget or running ads in a niche with a low number of searches.

7. Enhanced CPC (ECPC)

Enhanced CPC has the functionalities of Manual and smart bidding strategies incorporated for the ad campaign. Users can set an ad budget or conversion rate. Google can optimize the bid based on the chances of making the conversion. 

For example, if a conversion needs a high value, the google ad algorithm changes the conversion value. If it can close the conversion for a lesser value, it can close it for a much lesser value than expected. 

In Google’s smart bidding algorithm, if a conversion is likely, it will increase the bid, and if not, it will lower it. 

Assigning different conversion values for each action can help Google to optimize the conversion value based on the circumstances. 

8. Manual CPC

A manual CPC bidding strategy is backed by more manual control over your bids and targeting options. For example, you set manual CPC bids at the ad group or for the keyword, and the Google ad algorithm uses these bids to determine where your ads will show. 

manual Bidding workflow

Unfortunately, this control may be exhausting, especially if you’re running multiple ad campaigns, ad groups, and keywords, which means you’ll spend more time setting and adjusting your bids to achieve the best performance.

Manual CPC bidding lets you set bids and target location-based audiences. However, they also track your ad spending and optimize them automatically.

9. Target Cost per Thousand Impressions (tCPM)

The Target CPM strategy is applied only for the display network and youtube ad campaigns. In this bidding strategy, you’ll be charged for every 1000 impressions of your ad shown to the audience.

Google finds the most potential reach and targets the ad for them particularly. Google ad Algorithm makes the ad impression rate always lesser or equal to avoid additional charges. 

10. Viewable CPM (vCPM)

Viewable CPM (cost per thousand viewable impressions) is a manual bidding strategy where you only pay for impressions considered viewable impressions. Viewable impressions are measured by measuring how long your ad is shown and how many people saw it during that time.

For example, you might only bid for Google Search impressions when the search results return after a user enters your brand name and clicks on the link in the ad.

11. Cost per view (CPV)

Cost per view bid strategy charges you only for a specific watch time of your ad campaign. CPV is only applicable to youtube ad campaigns. 

You can set a maximum bid for every view or interaction for your ad. This only applies to YouTube Ads campaigns. A view is counted when someone watches 20 seconds of your ad, when people interact with it or when they click on it.

Advertisers will be charged only for the viewable ad or for any interaction made and not for the skipped or closed ads. 

The Bottom line

Google Ads provides a wide range of categories to help you optimize your campaigns. Though many of these options seem like black magic and way too much, they enable you to easily test different strategies and get your ad spend budget working harder than ever before.

Initially, you might wonder how to get started if you’re new to Google Ads. New campaigns take time to build, so with enough patience and time-proven tips, you can raise sales, boost conversions and achieve remarkable results.

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