Bidding Strategies

Everything You Need To Know About AdWords Bidding Strategies

The competition to maintain a strong online presence and maximize conversions through AdWords is immense.

Owing to this fierce competition, you have to make sure to have a place in the competition before even starting.

Here, AdWords gives you several ways to bid for your ads depending on your business goals and objectives.

Bidding is one of the essential features of AdWords as it plays a key role in deciding the Ad Rank. Click To Tweet

There are a lot of factors that influence the Ad Rank like the Quality Score, landing page, and keyword relevancy but bid amount is comparatively more essential.

Unfortunately, there are a lot of advertisers who fail to plan the bidding strategies efficiently.

However, bidding to gain a higher position in the Search Engine Result Page should not be your ultimate bidding strategy. Rather you should bid to meet the objectives and goals of your business.

What are your Goals?

Define your goals

In AdWords, there is various type of campaigns and business goals that require different bidding strategies.

Hence, before starting off with bidding, you should first determine your campaign goal. You should also know how this campaign goal will let you achieve your ultimate business goal.

Your campaign goals can be of the following types:

(i) Increase Brand Awareness

To increase your brand awareness, you should focus on impressions. For this, you can use Cost per Thousand viewable impressions (CPM) so that you can put your message in front of your customers.

(ii) Generate Traffic

Here, your ideal strategy should be to focus on the clicks. Cost per Click bidding may be the right bidding strategy in this case.

(iii) Nurturing Leads

To generate more leads, you should not only focus on the impressions and clicks but also on little engagement and micro conversions.

(iv) Increase view or interaction with your ads

This may be the case when you are dealing with video ads and for this, you can use Cost per View (CPV) bidding.

(v) Driving Conversions

If your campaign is focussed on driving more conversions, then you should look forward to increasing the conversion rate and achieving a target CPA.

(vi) Aiming to get a positive ROI

For a lot of businesses, getting a high ROI is the ultimate goal. If your campaign is focussed on achieving a high ROI, then you should possibly focus on the conversion rate, Cost per Acquisition (CPA) and then determine your ROI.

After you have clearly identified your campaign objective, understand the most important metrics and then apply a bidding strategy.

Given below are some bidding strategy options to fulfill your campaign goals.

 

1. Manual CPC Bidding

Manual CPC Bidding

It is the best option to optimize the bids as it gives you the maximum control over your bids.

With Manual CPC Bidding, you can set a maximum price on the cost of someone clicking on your ad.

Manual CPC Bidding lets you have a control over the cost and the volume of clicks on your ads. Click To Tweet

You can set different bids for each ad group in your campaign or even for each keyword.

If you set individual bids for each keyword level, then this will let you have the highest level of control.

On the other hand, when you set bids for each ad group, then the same is bid is applied to all the keywords within that particular ad group.

As a result, the keyword level bids outweigh the ad group level bids.

This kind of bidding strategy is best for those advertisers who want to have proper control over the budget and make sure that nothing is being overspent.

Moreover, Manual CPC bidding is essentially useful for those campaigns who are merely interested in website traffic.

And also for those campaigns who need not reach a target budget every month.

In addition to this, if your campaign targets the Search Network, the Display Network or both of them, then Manual CPC Bidding is a right choice for you.

2. Automatic Cost per Click

Automatic CPC Bidding

This bidding strategy gives Google the control to adjust your bids (whether an increase or decrease). It helps you to get most of the clicks within your daily budget for most of your campaign.

If you want to reduce your AdWords budget while not losing the impression share then this strategy will surely work for you.

One of the negative points of this bidding strategy is that you can not set maximum CPC Bids at the individual keyword level.

There are times when some of your keywords perform better. And for which you want to increase the bids.

There may also be times when some of the keywords do not perform well. And for which you would want to decrease the bids.

If you use Automated Bidding, you will not have the control to bid for each of the keywords. Click To Tweet

3. Maximize Clicks

Maximize Clicks

This is an automated bidding strategy that sets your bids to help you to get as many clicks as possible within your budget.

If the goal of your campaign is to generate a lot of traffic, then Maximize Clicks is the ideal strategy for you.

This strategy will maximize the volume of the clicks available for your budget.

Moreover, if you want to increase generate leads along with brand awareness, then this tactic will work well for you.

Maximizing Clicks is a great strategy to generating leads or increase micro conversions. Click To Tweet

However, you will have to keep an eye on your campaigns to make sure that they are profitable. This is because sometimes this bidding strategy could lead to lower quality of clicks. And this would further lead to lower quality of conversions.

Although this automated bidding strategy works within your daily budget but to have a little extra control, it is recommended to set maximum CPC too.

Furthermore, Maximum Clicks should be a good option for you if you are mainly interested in increasing the website traffic. Or you don’t want to spend time in monitoring or updating the individual CPC.

If you are new to Google AdWords and do not know how much to bid for a particular keyword, then this strategy might be suitable for you.

On the other hand, Maximize Clicks is not a good option for you if you want to maintain a particular Ad Position or Cost per Conversion.

4. Enhanced CPC

Enhanced CPC

Enhanced CPC is a bidding strategy that helps you to get more conversions in AdWords from manual bidding. 

It works by automatically adjusting your manual bids for clicks that had the potential of getting converted into a sale or lead.

Enhanced Cost Per Click bidding strategies is useful when you want to optimize the bids while having more control over your bids.

With Enhanced CPC, you can modify the bids for conversion oriented keywords. Click To Tweet

Just an example: You set all your bids manually but based on your historical data. And AdWords finds out that a particular keyword is more conversion oriented. Then it will increase the bid amount for that particular keyword.

If this is the case, AdWords increases 50% of your keyword bids. Earlier, AdWords used to increase 30% of the keyword bids which recently changed.

Although this change has made a lot of advertisers anxious of having less control over the bids. But when a particular keyword underperforms, then ECPC saves your money by lowering the bids by 100%.

Therefore, if you wish to maximize conversions along with retaining control over your website, then Enhanced Cost Per Click is the optimal strategy for you.

5. Target CPA

Target CPA

Target CPA is a smart bidding strategy in AdWords that sets bids to help you to get as many conversions as possible at the target Cost per Acquisition.

You can set a desired CPA and AdWords will work to increase the bids when conversions are likely to take place. But AdWords will simultaneously keep your Cost per Acquisition in mind.

Target CPA strategy is also known as the conversion optimizer strategy. Click To Tweet

The Target CPA uses historical information of your campaign and evaluates the signals present at the auction-time. Then it automatically finds an optimal bid for each time your ad is eligible to appear.

Sometimes, it might happen that some conversions might cost you more than the target and some might cost less. But on the whole, AdWords will try to keep your Cost per Conversion equal to the target CPA that you set.

This is because automation shrinks the control that you have on your budget. And so setting a maximum CPC saves your ad spend to an extent.

When you implement this strategy for the first time, AdWords offers a suggestion to avoid all your confusions regarding the target CPA.

Moreover, you should use the target CPA strategy when you have specific goals that you want your campaigns to achieve.

6. Target ROAS

Target ROAS

The Target ROAS bidding strategy lets you on the basis of Target Return on Ad Spend.

It is also a part of AdWords smart bidding strategy that lets you get more conversion value or revenue at the Target ROAS that you set.

Target ROAS is designed to deliver a certain amount of revenue over your advertising cost. Click To Tweet

This bidding strategy is most useful if you want to increase the conversion value while targeting a specific.

By using your reported conversion values that you get through Conversion tracking, AdWords predicts your future conversions and related values.

Then AdWords sets a maximum CPC bid to maximize your conversion value.

With Target ROAS Bidding, AdWords tries to keep your conversion value equal to your Target ROAS.

One thing to note here is that AdWords does not recommend you to set up maximum CPC for this bidding strategy.

Furthermore, this type of bidding strategy is useful for businesses that deal in product and services.

7. Maximize Conversions

Maximize Conversions

Maximizing Conversions is a new addition to AdWords Smart Bidding Strategy. It automatically sets the bids to help you to get the most conversions from your campaigns while spending your budget.

If you are looking forward to quickly increase the number of conversions regardless of the cost, then this strategy is perfect for you. It is a great option if you want to launch a new product or want to sell the leftover products.

When a search is likely to result in a conversion, AdWords takes the historical data of your campaign into account and automatically increase your bids.

Closely monitor your costs and use a separate budget for your campaigns when you are opting for this bidding strategy. 

Maximize Conversions strategy does not work with a shared budget. Click To Tweet

For optimizing your conversion, if you just want to spend your entire budget instead of targeting a particular CPA, then this strategy is will work best for you.

8. Cost Per View Bidding

If you are using advertising your products and services with the help of videos, then it is the most appropriate bidding for you.

With the Cost Per View bidding, you will have to pay for video view and other video interactions like the clicks on the Call-to-Actions.

A view is counted when someone watches your video ad for 30 seconds or interacts with your ad. Click To Tweet

To set a Cost Per View bid, you need to enter the highest amount that you want to pay per view while setting up your ad group in a TrueView Video Campaign.

Your bid is called the maximum CPV bid and this bid is applied to all the ads in an ad group.

For example, if you think that it is worth 50 Cents to have someone watch your video. Then you can set your max CPV bid as US$0.50.

With this, you will pay a maximum of US$0.50 when someone watches 30 seconds of your video or interacts with your video.

9. Cost Per Thousand Impression Bidding

Cost per Thousand Impressions

This is a manual bidding strategy that you can use if your campaign goal is to increase brand awareness.

With CPM bidding, you bid for your ads that are based on how often it appears on a viewable on the Google Display Network.

You set a max amount you want to pay for viewable ads irrespective of whether they are clicked or not.

When you use CPM bidding strategy, you set the highest amount that you want to pay for 1000 viewable ad impressions. This is called the maximum CPM bid or max viewable CPM.

The higher your max viewable CPM, the greater the chance that your ad will appear. Click To Tweet

You can set your max viewable CPM in a couple of ways:

  • Ad Group Bids

When you set your max viewable CPM at the ad group level, you will have the same max viewable CPM for all keywords and placements in that ad group.

  • Place Level Bids

You can set your max viewable CPM for each placement if necessary. 

However, you should know that this bidding strategy is not available for “Search Network Only” campaign types.

10. Target Search Page Location

Target Search Page Location

Target Search Page Location is a type of automated bidding strategy that automates bidding across multiple campaigns, ad groups and keywords to show your ad on the first page of Google Search Results.

This bidding strategy especially focusses on ad position and visibility and is therefore suitable for brand awareness.

There are a lot of businesses that spend whatever it takes to maintain a higher position in the search results. And so they are inclined to use this strategy.

Target Search Page Location is the most befitting bidding strategy to increase visibility. Click To Tweet

In this bidding strategy, AdWords automatically increases or decreases your bids to show your ads on the top page of Google Search Results. This bidding strategy works quite well with keywords, ad groups and campaign targeting the Search Network Only.

This type of bidding strategy lets you set and forget the bid. According to the requirement, AdWords change your bids.

Although this strategy can be very convenient, it can still easily drive up your costs.

However, you should implement this strategy when you no problem in spending money that might not return direct revenue. If you are much more concerned CPA or the ROI, then this strategy might prove to be very costly for you.

In Target Search Page Location, you get two options:

  • Top of the first search results page

Here, AdWords automatically raises and lowers to meet the top of the page estimate.

The estimated top of the bid amount approaches the CPC bid that your ad might require reaching the top of the page of the Google search results when a search query exactly matches your keyword.

  • Anywhere on the first search results page

AdWords automatically increases or decreases your bids to meet the first-page bid estimates. The estimated first-page bid amount approaches the CPC bid that your ad might require reaching anywhere on the first of the page of the Google search results when a search query exactly matches your keyword.

11. Target Outranking Share

Target Outranking Share

It is another type of automated bidding strategy that automates bidding across multiple campaigns, ad groups and keywords to help your rank to outrank from others.

Use Target Outranking Share to outrank a competitor and grab more clicks. Click To Tweet

This strategy comes handy when you want to ensure that your ads show more frequently than your competitors.

To implement this bidding strategy, you just have to choose a domain that you want to outrank. So that your ads are displayed above that domain’s ad.

AdWords automatically raises or lowers your bids to help your ads outrank ads from another domain. This bidding strategy works with keywords, ad groups, and campaigns targeting the Search Network only.

It’s important to understand that this strategy doesn’t necessarily improve your overall ad rank; it only works to help you improve your rank in comparison to another domain’s ads.

Final Thoughts

Suiting to the needs of your campaigns, AdWords gives you a variety of bidding options.

The bidding strategy that you use depends on two things. One is which network your campaign is targeting and the other is your campaign goal. Whether you want to focus on getting clicks, impressions, traffic, or conversions.

As all the businesses have different objectives and a single bidding strategy may not be applicable to them.

To overcome this dilemma, AdWords presents a wide range of bidding options. 

Hopefully, you will also find a suitable bidding strategy as per your requirement from the above-mentioned options.

Dinesh Thakur

Dinesh Thakur is the co-founder of Ads Triangle which is a Google Partner and Bing Ads Accredited agency. He has over 7 years of experience in Pay per Click marketing. Dinesh has helped hundreds of businesses to grow their revenues through PPC. He has expertise skills in Google Adwords and is passionate about Pay Per Click.
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