How To Choose The Best Bidding Strategy For Your AdWords Campaign

Selecting a bidding strategy can be one of the most confusing and difficult aspects of running a PPC campaign. The best place to begin is to ask yourself what the core objectives of your campaign are, and this will help make your choice much clearer.

Whether you are aiming to get users to take a converting action on your website, drive more traffic to your website, or you want to increase your brand’s visibility, there are different bidding strategies that can help achieve these objectives.

  • Target Cost per Acquisition (CPA)

Your target CPA is the average amount that you would be willing to pay for a single conversion. Using its Smart Bidding feature, Google will make a CPC bid for your ad whenever it appears, based on historical campaign data as well as contextual information available at the time of the auction.

In theory, this will help your campaign convert for a cost that is equal to or less than the target CPA that you set. Keep in mind, however, that it is still possible for some conversions to cost more than your CPA due to uncontrollable factors such as the level of competition in the auctions.

Google will also suggest a target CPA for you, which is calculated from the historical conversion information of your account. To use this type of bidding, you will need to have conversion tracking set up in your account.

Best to use when: You want to boost your conversion rate whilst targeting a defined CPA.

  • Enhanced Cost Per Click (ECPC)

ECPC works by taking your manual bids for clicks and automatically lowering or raising them depending on how likely they are to lead to a conversion or not.

Using its Smart Bidding technology, Google will look at various indicators including the time of day, browser and device type or user demographics in order to adjust your bid accordingly. ECPC can be used for text and shopping ads on the Search Network but only text ads on the Display Network.

Like Target CPA, Google will attempt to maintain your average CPC in accordance with the max CPC that you set, but it is also possible that it will be more than your max CPC in some instances. This bidding strategy also requires conversion tracking to be set up.

Best to use when: You want your manual CPC bids to be automatically adjusted in order to increase conversions and you have a large and flexible budget.

  • Target Return on Ad Spend (ROAS)

Target ROAS is a type of bidding strategy that is geared towards optimising the value of conversions rather than the quantity of them. Therefore, your Return on Ad Spend is the average amount that you receive every time you spend £1 on your ads. To work out how much your return will be, you can use the formula:

Revenue / Ad Spend x 100

Like the two strategies above, Google will automate your bids based on a set ROAS that you have specified for individual auctions. By examining your accounts historical conversion information, Google will then set a max CPC based on predictions it has made about future conversions and the return you will get from them.

Based on your campaign type and the network it is delivered on, Google will adjust the bidding strategy correspondingly and the bidding strategy is currently unavailable to use on Display Network Only.

Best to use when: You want to generate high value conversions rather than a high volume of conversions.

  • Maximise Conversions Bidding

This is the fourth type of bidding strategy that makes use of machine learning to predict and set a bid value that will optimise your conversions. This strategy is geared towards getting the most conversions for the full value of your daily budget. Based on past data about your campaign, together with the contextual factors at the time of the auction, Google’s Maximise Conversions bidding will set a CPC bid every time your ad appears.

Best to use when: You want your campaign to be optimised for conversions but would rather spend your full daily budget rather than targeting a specific CPA. This is more suited to advertisers with larger budgets to spend.

  • Maximise Clicks Bidding

This type of bidding strategy is one of the most straightforward in that its aim is to generate the highest number of clicks within the budget of your campaign.

You will set an amount that you are willing to spend across keywords, ad groups and campaigns, and Google will automatically adjust your bid in order to generate as many clicks as it can for that amount. You can also set a maximum CPC, which will ensure that you don’t pay above a specific amount for each click you get.

Best to use when: You have a working conversion journey that you’re confident in but you need to drive more traffic to your site in order to begin it.

  • Manual CPC Bidding

Manual CPC bidding requires advertisers to specify the maximum price they would be willing to pay every time someone clicks on their ad.

Due to the way that Google’s ad auction operates, it is likely that most of the time you will be paying slightly less than your Max. CPC, as you will pay the minimum amount it takes to maintain your ad position amongst the rest of the search results.

The position you occupy is dependant on your Ad Rank, a score that is measured by your maximum CPC and quality of your ad compared against every other ad in that auction. Deciding on how much to set as your maximum CPC all depends on how valuable you perceive a conversion to be for your business.

Best to use when: You want to have more control over your CPC bids and you want to set separate bids for your ad groups, keywords and ad placements.

  •  Cost Per Thousand Impressions (CPM)

CPM bidding is based on how much you will pay every thousandth time your ad is shown, rather than when somebody clicks on it.

This kind of bidding strategy is most suited to those who want to increase brand awareness as their objective, which is why it is most commonly used for adverts on the Display Network rather than the Search Network.

The main obvious drawback that comes with this bidding strategy is that you could end up paying for thousands of impressions but zero clicks or conversions on your website, therefore it should be avoided if click or conversion optimisation is your main priority.

Display Network ranking is based only on bid price, therefore if you are the highest bidder, your ad will occupy number one position.

Best to use when: You want to increase your brand’s visibility on the Display Network and generating clicks and conversions is not your main priority. 

  • Target Outranking Share Bidding

This is a strategy that allows advertisers to bid to outrank the ads of a specific competitor. Rather than aiming to reach a specific position, when your ad outranks that of a competitor, it will appear in a higher position on Google’s search results. As such, this kind of bidding can only be used for campaigns on the Search Network.

This is another form of automated bidding in which your bids for your keywords, ad groups and campaigns will be adjusted by Google’s machine learning, in order to help you outrank your competitors.

Advertisers must also specify how many times they want to outrank their competitors; there are several settings, which allow you to choose what your bid will be adjusted for. For example, you can set a percentage of auctions in which you want to outrank your competitor, or you can set a max CPC that you are willing to pay to outrank your competitor.

Best to use when: You have a fairly large and flexible budget and a specific competitor over whom you want to increase your visibility in the search results.

  • Target Search Page Location Bidding

Target Search Page Location bidding is a strategy that focuses on getting your ad either to the top position of the page, or on the first page of Google’s search results, and as such, only works for campaigns on the Search Network.

Although there is a correlation between average ad position and conversion rate, the position of your ad on the search engine results will not guarantee clicks, conversions or your target ROAS, and therefore suits brand campaigns much more.

This is an automated strategy in which Google will adjust bids to meet your page location goals, however, there are two bid automation options to choose from. You can either set your bid amount yourself which Google will then automatically adjust, or Google will automatically lower or raise bids to meet the predicted top of page bid instead.

Best to use when: you want to increase exposure for your brand and are confident that if a user clicks the ad, they have a high chance of converting.

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