It is no simple task to beat all your competitors in the battle for Google Ads visibility. Millions of advertisers every day try with all their might to lead and stand out amid heavy competition. Google Ads bidding capabilities have much more to offer you beyond simple bid setting to navigate this competition successfully.
If you haven’t yet experienced your breakthrough in Google Ads and haven’t yet enjoyed defeating competitors who likely just have deep pockets, we have good news: you can do it. We have prepared a guide that will arm you with all the capabilities, tools, and bidding strategies you need to easily leap over your competition.
How Does the Bidding System in Google Ads Actually Work?
Google allows you a large number of bid types for ads. Most advertisers focus on clicks, impressions, conversions, or views (mainly for video).
Every time Google has available advertising space across its Search network or in search results, it runs an auction. The auction will determine which ads will be displayed at any given moment in the available ad placements.
The bid you set is what enters you into that auction. It might sound simple, but the more you understand the subtlest nuances of bidding, the better your bid will be and the more you can achieve from your advertising.
In principle, it depends on your business industry, but there are several main bidding options we will cover in this guide so you can choose the strategy best suited to your business goals.
3 Components in Google Ads Auction Ranking
So we talked about auctions—how does it actually happen in practice?
Every Google Ads auction considers three main parameters when ranking your ad:
1. Cost per click for the keyword
2. Your Quality Score for the entered keyword
3. The extent of ad assets (formerly ad extensions) and their relevance to the keyword
These Google auctions happen quickly, so it is advisable to know how to make adjustments to maximize your capabilities.
Let’s dive deep to understand how you make these adjustments and get the most out of the algorithm.
Bidding Methods Recommended by Google Ads
The Google auction model was originally designed to try to increase your bid; your goal is the opposite: to get the most out of your bid price, pay less, and get more.
When setting goals for a Google PPC campaign, you need to consider the balance between conversion volume and conversion cost. For example, you could lower the bid, but that might hurt your conversion volume.
On the other hand, you can increase the bid more and more, which may increase conversion volume, but it is also the surefire way to burn through your budget.
To avoid these scenarios and find the right balance, here are Google Ads bidding recommendations:
- Make sure conversion tracking is monitored and properly configured
- Make sure the attribution model is configured and aligned with your goals
- Perform A/B testing on bidding strategies using Google’s feature called Drafts & Experiments
- Research the core of your campaign and your goals thoroughly. For example, if the goal is to increase brand awareness, focus on impressions rather than clicks.
- Evaluate the performance of your ads and don’t be afraid to make adjustments in real time.
- Be patient and wait for enough data to know whether you need to make bid adjustments; try to reach a high level of confidence in your conclusions.
- Structure your account so that it’s easy to make adjustments whenever needed.
Setting Clear Goals for the Bidding Strategy
When it comes time to understand what you would like to get from your ads, it is important to set clear and achievable goals.
Not all of your goals and ambitions will always align in the same direction, and that’s okay; the overall goal is to aim for the major, high-impact metrics to achieve good numbers.
Examples of realistic and clear metrics:
– Increasing the conversion rate by 20%
– Increasing ROAS by 15%
– Reducing CPA by 45%.
It is possible to achieve all these goals together, but often the data does not converge, and the most important thing is that top-priority goals actually materialize, even if lower-priority ones do not.
Now that you understand that your goals will affect bidding strategies, let’s look at bid types that can be useful for you.
Manual Bids or Automated Bidding Strategies?
Working in the old, cumbersome way is always an option; there are those who like it and even manage to achieve good results this way. But if you want to work smart, it’s advisable to know how to work with Google’s automated tools to reach your Google campaign goals.
CPA-Based Bidding
Get as many conversions as possible at the CPA you set. This is the best method if your ad is designed for lead generation.
Pros
Excellent for campaigns driving conversions such as sales, sign-ups, messages. Setting an automated CPA bid can increase the leads you can get from the existing budget, using your conversion tracking data, with the goal of preventing unprofitable clicks and getting more conversions at a lower cost.
Cons
Cannot set a maximum CPC for the bid.
Requires a particularly high budget.
ROAS-Based Bidding
Do you have an ROI you intend to achieve as a result of using PPC?
If so, using Return on Ad Spend (ROAS) might be suitable for you.
The ROAS metric takes into account your conversion values—those you defined during the conversion tracking setup, or revenue values from Google Analytics Ecommerce.
Let’s say you define that you want a return of 7 NIS. This means that for every shekel you spend, you will earn seven shekels. The target for the bidding strategy would therefore be 700%.
Pros
Ecommerce-oriented bidding relieves store owners of the headache of finding the balance between budget strategy and bid pricing, leaving the “winners” with high profit margins.
Additionally, this is a strategy that knows how to place ads directly in front of purchase-ready audiences.
Cons
Requires a lot of preliminary work entering sales data and product prices; requires you to know which keywords are the most profitable to deliver high ROAS.
Optimizing for ROAS can suppress ad spend because it attempts to reduce expenses and increase revenue to achieve a high return, which sometimes harms the campaign’s overall revenue potential.
Maximize Clicks
Through this bid, Google automatically allows you to get as many clicks as possible within your budget. This is an ideal solution when you have high conversion rates and a strong ability to drive your customers toward a purchase or other beneficial action.
Pros
Simple and easy to manage. These are basic automated bids.
The learning period is fast.
This is the fastest strategy for generating traffic.
Cons
Clicks and conversions can be of low quality.
Maximize Conversions
If your goal is to increase inquiries, sales, or any other interaction, you define it in advance and automatically receive the highest number of conversions relative to your budget—an excellent bidding strategy for those with surplus budget who want to exhaust it in a single day.
Pros
Helps achieve higher conversion volumes.
Automatically identifies people who are more likely to convert according to what you defined.
Cons
There is no bid cap on cost per click, and you can easily reach the daily budget with minimal clicks.
Google wants to get you the largest number of conversions, but it might come at high costs, which will raise CPA or lower ROAS.
Maximize Impression Share
You set a bid designed to automatically generate maximum visibility across all campaigns. There are three impression share bid options: absolute top of the page, top of the page, anywhere on Google search results.
This bidding strategy allows you to set a maximum CPC bid limit; if you set the bid too low, it may harm your campaign goals, and if you set the bid too high, the click price could skyrocket and the budget will run out quickly.
Enhanced Cost Per Click Bid (ECPC)
This is a smart bid that can be applied manually and gives Google the freedom to increase or decrease the bid when it determines there is a higher probability of conversion.
When there are so many options, it may create the impression that you need to pay more and raise your bids, but in practice, Google “auctions” take additional factors into account: geographic location, time of day, device, potential audience, browsing behavior, intent, Quality Score.
So don’t feel like your budget is too small; Google has the capabilities to help you reach your goals.
Using Your Budget Wisely
You have seen the bid types, and these are just the tip of the iceberg of available bidding options. You should get to know all the pricing strategies and match the appropriate bidding strategy to each activity.
Ultimately, every activity and every business has different goals: one wants to strengthen the brand, another needs only a handful of clicks to profit much more from them. Bidding strategies are your assurance in managing your budget and maximizing the goals from your Google campaign; they can be what turns your campaign into a success.