Jul '23 • Ad Management
Bidding Strategies on Google Ads
There is a lot of confusion about which bidding strategies to use and why, so I want to share my thoughts.
(Disclaimer: there is no 100% right or wrong answer. If you try something that should be right for you and it doesn't work, change it! Marketing is all about starting with your best guess, then monitoring and adapting based on the data.)
Manual CPC:
When you absolutely, positively HAVE to maintain full control over your bidding. (I pretty well never use this anymore)
If you're going to use this strategy, expect to spend a lot more time analyzing engagement metrics around device, demographics, time, location, etc, and adjusting bids at those levels and at the keyword level.
Enhanced CPC (eCPC):
The same as Manual CPC, but with the option to let the algorithm in just a bit for bid increases when Google thinks a conversion is likely. Can choose to optimize for conversions or conversion value. CPCs are affected by all bid adjustments.
This is a great choice when you're starting a new account and need to collect some conversion data before going full-auto on bids.
Maximize Clicks:
A strategy I always told people not to use and now find myself testing from time to time. As with the other click-centric bidding strategies (manual and eCPC), it is affected by all bid adjustments.
This is a strategy to use with caution. It attempts to get as many clicks as possible, which can cause it to bid low to get more clicks for the available budget. Low bids can mean low ad position, which can mean low CTR, which can mean low impression share, which can mean the only clicks you get are from bottom-of-the-barrel search terms.
If high-intent CPCs are generally low in your industry and you have a good amount of budget, you could test this to collect conversion data, but eCPC is generally considered a safer starting point. (I see this used more with Display or Brand campaigns)
Target Impression Share:
Easy to mess up, not always worth the effort. This is used most with Brand campaigns, from what I see. The idea is to show up in the top 3 or absolute top ad position as often as possible. It is only affected by 100% negative bid adjustments on device.
To be honest, the goal of every bidding strategy should be to show up as often as possible in the top position(s) while not overspending. The difference with Target Impression Share is that you aren't adjusting based on the quality of the search. It's all or nothing.
This is why it's best to use this with Branded search if you're going to use it at all. You want to show up as high as possible in every branded search, and the CPCs aren't as likely to get out of hand in pursuit of that goal (unless your brand name is super generic and designed for SEO).
Maximize Conversions:
Here's where we get into the more common questions and controversial answers. Many will say to wait on Max Conversions until you have 50 conversions a week. Others will say 50 a month. Still others will say 50 total conversions in the campaign's lifetime. Finally, Frederick Vallaeys (one of Google's first 500 employees and the OG who brought Conversion tracking to Google) says that the algorithm is probably at the point where you can just turn on Maximize Conversions in a brand new account and get reasonable results. Regardless of when to use it, there's a (mostly) hidden secondary goal to this bidding strategy. In addition to getting as many conversions as possible, Maximize Conversions will also try to spend your entire budget every day (and Google will spend as much as 2x your daily budget in a given day while staying within 30.4x your daily budget within a month). This means that if you have a daily budget of $50 and had a slow day, spending only $10 by 11pm, Google may spend as much as $90 on a click if it deems a conversion likely. If you're using Max Conversions, keep an eye on your average CPC. If you see a big jump all of a sudden, this may be the reason.
I generally turn to Max Conversions when I am getting a relatively steady flow of conversions, but don't have a clear CPA target yet. This can be due to conversions from lots of different keywords at CPCs that vary wildly or DSA or something like that. It's a solid choice for lead gen campaigns and ecomm alike, though it is usually overshadowed by Maximize Conversion Value with a ROAS target when conversion values are being tracked.
Maximize Conversions with CPA Target:
Generally considered the best option for lead gen accounts, the CPA Target lets you reign in the bidding by shifting the focus from "get as many conversions as possible within my budget" to "get as many conversions as possible at my Cost Per Action target". I want to draw attention to the meaning of CPA. It is NOT "Cost Per Acquisition", as it is often translated. Google can't really determine how much it costs you to acquire a new customer. It stands for "Cost Per Action", where "Action" refers to the conversion action. Google went with CPA because "CPC" would have made people think "Cost per Click" and "CPL (cost per lead)" would have made people mad because a conversion does not always equate to a lead. That said, this is generally the pinnacle of lead gen bidding because you don't have to have conversion value and it is generally more predictable than Maximize Conversions. The reason to use Maximize Conversions without the CPA target would be if your CPA has been consistently rising (for whatever reason) and your top impression share keeps plummeting. You could keep increasing your CPA target, but doing so many times a week will not give the algorithm time to learn and adapt to the changes. This creates a negative flywheel and it's generally best to just get rid of the CPA target to let Google bid what it needs to bid to keep up with the competition. While I don't keep hard and fast rules for when to use bidding strategies, I like to use the CPA target when I'm getting a steady flow of conversions and have a top or absolute top impression share of 80%+.
Maximize Conversion Value:
Similar to Maximize Conversions, the goal of this bidding strategy is to get as much conversion value as possible within your budget. If you're tracking conversion value, it will bid higher on the conversion actions that have a greater value assigned than on those actions that have a lower value. If you're not tracking value, but have set some conversions with the default "1" value, you'll probably end up with higher bids on those actions and would be better off with Maximize Conversions with or without the CPA target. I have heard, but not confirmed, that Google is aiming for a 200% return on ad spend with the Maximize Conversion Value bidding strategy. This means that if you spent $1000, Google would try to bid so that you brought in $2000 in conversion value from that ad spend. I believe, based on Google's explanation of the strategy, that the secondary goal of spending your full budget exists here as it does with Maximize Conversions. This is a great strategy to use when you have products to sell online, but you have a wide variety of price points, and Google bids too high on low-value products. The same is true with lead gen if you have entered values for your conversion actions.
Maximize Conversion Value with ROAS Target:
My favorite bidding strategy (but not the best for every occasion), adding the ROAS target is one of the best ways to constrain the algorithm to drive valuable action without breaking the bank to get the click. I've seen great performance from this strategy with targets all over the map, but it's generally best to walk the fine line between pursuing sales volume and efficient bidding. If you would break even on a sale to a new customer with a 300% ROAS, bidding for 350-400% is going to be more profitable in the long run than bidding for a 700-800% return. The reason for this is that a higher ROAS target requires lower bids or much higher conversion values. If your average order value is $150, you would need to get conversions around $18.75-$21 each to get a 700-800% ROAS, which may require a conversion rate of 30-100%, depending on CPCs. That's not reasonable for most ecomm accounts, so you may end up with a low volume of sales as Google tries to bid conservatively. On the other hand, you could bid twice as much if you were willing to bid for a 350-400% ROAS, winning many more auctions and getting clicks from higher-quality searches. The same rules apply to this strategy that I use with Max Conversions: If you're consistently losing impression share and see traffic and conversions dip, you'll be in a negative flywheel if you don't decrease or remove your ROAS targets.
Hopefully this wall of text was more valuable than overwhelming. If you've had questions about or confusion around bidding strategies, and this doesn't help, let's try tackling some of those on the next coaching call.
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Bidding Strategies on Google Ads
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