Google Ads Bidding Types

Are you finding it challenging to generate user engagement and the desired ROI from a Google Ads campaign?

While you can change the website and campaign, you must rethink the bidding strategy. Your Google Ads bidding strategy determines the ROI, sales and how many people respond to the ads.

There are several bid strategies you can opt for, be it manual or automated bidding. To help you, we have listed the major Google Ads bidding types, provided important tips and answered some common questions.

Read this guide to enhance brand value by pushing the ads higher up the search results page.

Ad Bidding Optimisation

For your Google Ads bidding strategies to succeed, optimising the bids by evaluating them is essential. After the Google Ads have been running for a while, it is best to check the bid strategy to see how they perform.

For instance, if you want to increase sales and drive more traffic to the website, try to answer the following questions for Google Ad bidding optimisation:

• Where are your consumers searching from?
• What devices are they using?
• Which keywords are the most clickable on Google Ads?
• What are the peak times for the business?
• What are the best days for the business?

Some other steps you can implement for smart bidding strategies include:

1. Evaluating The Revenue And Costs

To gauge the effectiveness of a Google Ads bidding strategy, you must know how often people are encouraged to click on Google Ads after seeing them. It would be best to sort the keywords based on clickthrough rate to determine which keywords generate maximum impressions without generating clicks.

For maximising conversion value and sales, Google allows you to edit the bids on the keywords. To do this, you can set up conversion tracking to know if the clicks translate to sales. This helps determine the success of a Google Ads campaign by showing whether people signed up for the newsletter or purchased the product. Hence, you can calculate the return on investment.

Another tool you can use is ‘Maximise Clicks’ to fix a budget, which will adjust the cost-per-click bid strategies, so you receive maximum clicks within the entire budget. Or you can use automated bidding strategies to achieve particular goals and tweak the campaigns when needed.

2. Adjusting The Bid Strategy

Changing the bidding strategy would be ideal for greater ROI, so once you know about the location, devices, keywords and time, make sure to consider the following factors:

A. High CPC, Low Conversion Rate

You can lower the maximum CPC bid when a keyword has a high average cost-per-click rate but low conversions. This increases the chances of a higher ROI for the bid strategy to succeed, ensuring you only invest a little in low-performing keywords and use that money on more important ones.

B. Low CPC, High Conversion Rate

Since the conversion rate is high despite the low cost-per-click rate, you can increase the maximum CPC bid limit in such instances.

C. Low Traffic

If, during certain hours of the day, you find that traffic to the website is dropping, employ smart bidding strategies by increasing the bids in areas where you’re performing well. An interesting tactic is using promotional campaigns with Google Ads to engage more people.

D. Quality Score

Businesses that want to improve the position of their ads without increasing ad spend can monitor the quality score. When the quality score for a keyword is high, you must pay less for an ad position.

E. Small Incremental Changes

Because internet traffic isn’t linear and constantly changing, you must tweak the bid strategies in small increments to keep up with the market. Once you spot changes in the conversions and clicks for specific keywords, it becomes easier to make the changes.

F. Optimising The Bidding Strategy

Apart from automated bidding strategies, other tools help you choose the right bid. But first, ensure the Google Ads bid strategy campaign has run for several weeks before using the following tools for personalised recommendations.

• First-page bid estimates
• Bid simulator
• Recommendations page

Most businesses will find all the relevant information on the recommendations page, like how to get more traffic, improve CPC bids, enhance performance and increase the Ad rank. You will also know how much you must invest in ranking your ads toward the top of the first page for Google Search Results.

Besides that, with the bid simulator, you can get answers to nagging questions. For instance, by increasing the target cost, businesses will know what target impression share they will get.

Ad Bidding Best Practices

You must employ the best bidding practices to get a higher return on ad spend, so keep the following things in mind.

1. Timing

Even with automated bid strategies, timing is crucial for your ads campaign to be successful. You take your time deciding because monitoring a campaign over several weeks will give different results than when it was first launched.

It would be best to get at least 1,000 impressions and a high number of clicks to analyse the bidding strategy, so run it for more than three weeks. This is true for even low-volume campaigns to get as many conversions as possible.

But for high-volume campaigns, you will need thousands of more impressions. The good thing is that testing for three weeks or months allows you to calculate the following:

• How much are you likely to get paid
• People might convert less at certain times during the month
• How people are responding to the purchase process
• When consumers come back

2. Estimated Metrics

Several smart bidding strategies rely on estimated metrics to know which Google Ads bids to choose.

• Estimated first position bid
• Estimated first-page bid

As the name suggests, the first bidding strategy is for ranking on top of the first page, while the second technique is just for a position on the first page. Using either strategy will help you decide what to bid to secure those positions.

While bidding, ensure you spend less than 20% of the daily budget for greater flexibility and to use the money wisely. Moreover, you can test other bid strategies against the Key Performance Indicators to determine the ideal way to set the bid.

Some of these ads bidding strategies are:

• Target CPA
• Traffic optimisation
• Manual bidding strategy
• Conversion optimisation

3. Target Impression Share

We have spoken about target impression share earlier, but what does it mean? Impression share is the number of times the ad is visible to people searching on Google. When the impression share is 100%, your ad will be visible 100% of the time for that keyword search.

Any keyword bids must show up at least 90% of the time for high impression share. The bottom line is that the low-cost per conversion keywords with high optimisation should appear often.

Ad Bidding Tips

Here are some effective Google Ads bidding tips when using bidding strategies like Maximise Conversions:

1. Adjust Bids

Making bid adjustments when necessary is essential, especially depending on the performance. If you find that a certain device is driving conversions at low costs, get a 20% positive bid adjustment for that device. By segregating the campaigns and ad groups, you can view how individual devices perform.

2. Bidding Strategy Rules

Based on the business parameters, you can use Google Ads to create bidding rules to enable, pause, manage budgets and change bids. Setting the rules at the keyword, campaign and ad group level for Maximise Conversion Value bidding is easy.

3. Bid Strategy Scripts

As part of its automated bidding strategy, Google Ads automatically sets the bid scripts depending on the available metrics and time. The best part about scripts is that you have scope for greater customisation and can manage the bids based on weather patterns. This isn’t possible with the rules set for normal Google Ads.

4. Bid For Sales

Some businesses must give more importance to conversion value and focus on bidding for conversions. But we recommend bidding for sales and tracking which keywords are doing better. As a result, you will have a fixed cost-per-conversion goal and treat PPC traffic on merit.

Google Ad Bidding System

The Google Ads platform has an ads auction process whereby you bid for ads in multiple ways, provided you have prioritised what’s most important in the business - clicks, conversions, impressions, views, etc. Once you have a clear goal for Google Ads, deciding on Google Ads bidding strategies will become easier.

Whenever an ad space is available on the search results page, news website, blog, etc., Google Ads offers the chance to auction. The auction results determine what ads will be visible in the space at that moment, and the bidding method puts you in the auction.

So, what aspects should you focus on when developing an effective bid strategy? We have narrowed down four factors.

1. Target Impression Share Strategy

Target impression share bidding is ideal for businesses looking to enhance their brand visibility by targeting the search network. Best of all, Google Ads will use automated bid strategies to determine the bids and help achieve your goals.

You prefer an impression share target of 50% on the top of the page. This strategy ensures your ads will appear in the top 50% of the total possible times. Similarly, if you target the display network, you can pay every time the ad is visible rather than for the number of clicks.

Tip: Manual CPC bidding functions in much the same way.

2. Views

Views are essential for video ads, and to calculate the target return, we recommend CPV bidding. This smart bidding strategy lets you determine if consumers engage with the video ads when they leave and on what device they watch the videos.

You can pay for video interactions through CPV bidding, like views, cards, Calls-To-Action overlays, and companion banners.

3. Clicks

When you want people to visit the website, prioritise the clicks for display and search ads. Also, maximum CPC bids ensure you pay only when people visit your site by clicking on the ads. We suggest a healthy balance of broad-range and direct-hit keywords to get the desired target return on ad campaigns.

4. Conversions

Conversions for display and search ads call for an advanced bid strategy, whereby you decide the amount you want to pay for the target CPA or conversion. Often known as an acquisition, conversions are particular actions you want for the website.

For some businesses, it’s a sale, while others prefer email signup, etc. Intermediate and advanced Google Ads users must enable conversion tracking, following which this fully automated bidding strategy will set the bid to get maximum conversions at the target CPA.

Ad Bidding Software

If you are running multiple campaigns on the Google Ads account, it’s essential to know about the right ad bidding software you can use:

• SEMrush
• Adzooma
• Answer The Public
• SpyFu
• ClickCease
• PPC Protect
• Google Ads Editor
• Dashword
• Google Analytics
• Keyword Planner

Many of these are free software, with Google Analytics, SEMrush, Google Ads Editor and Keyword Planner being the most well-known. Among these, Google Analytics is particularly useful for gathering demographic data, conversion tracking and custom reporting.

When used with the Keyword Planner, this free tool effectively generates more user engagement by suggesting the right keywords and planning a successful bidding strategy.

Ad Bidding Algorithm

The Google Ads bidding algorithm keeps learning and changing to increase conversion values through different Google Ads. Here we have highlighted some important aspects of the algorithm.

1. Adapting To Changes

Google Ads uses a smart bidding strategy to update the bidding algorithm and ensure it aligns with shifts in performance. As the business continues growing, it’s natural to tweak the campaign. More often than not, Google Ads performance changes are driven by internal factors like:

• Ad spend
• Testing a new ad copy
• Using new keywords
• Rethinking the landing pages

2. Updating The Bidding Strategy For Success

You must have a deep repertoire of conversion data to update the bidding strategies and see results faster. We recommend measuring all the conversion actions of the bid strategy to know the aspects most valuable to the business.

With smart ads bidding strategy, you can optimise the conversions with tools like Maximise Conversions and Target CPA. This can deliver even better results and increase ROI, thanks to Target ROAS and Maximise Conversion value.

3. Data Recency And Conversion Delays

The bidding strategy algorithm considers the latest data and the duration of the conversion cycle, called adaptive historical weighting. That said, Google Ads bidding strategies functioning only on the principle of recent performance may not be accurate.

You must factor in conversion delays, whereby users take longer to click. Hence, Google Ads uses automated bidding strategies to prevent overreactions, reductions, or manual bid strategies.

4. Changing Targets To Meet Business Goals

Adjust the targets by considering the business objectives, budget, new performance goals and market conditions. You must also change the ROAS and target CPA whenever needed; that’s where intelligent bid strategy proves useful by automatically adjusting the bids.

Smart ads bidding strategy simulators come in handy by highlighting the relation between budget and targets and how this affects conversion, cost, or conversion value.

Ad Bidding Strategies For Small Businesses

To increase the success rate of your Google Ads, here are some Google Ads bidding strategies you must know about.

1. Target Cost Per Acquisition

To optimise conversions, most businesses use a target CPA bidding strategy to increase conversions at a particular acquisition cost. CPA is the amount of money you want to spend to acquire a single customer, and Google Ads automatically determines the bids for each campaign depending on the CPA.

2. Target Return On Ad Spend

Once you determine how much return you expect from the ad spend, Google Ads uses the Target ROAS bid strategy and Maximise Conversion Value. It is calculated as a percentage by dividing the total sales by ad spend and multiplying the result by 100.

3. Maximise Conversions

This is one of the easiest Google Ads bidding strategies, as Google Ads automatically runs the bidding strategy to get the most conversions based on your daily budget. You can check the ROI to see if the bidding strategy resulted in profits but remember to set a reasonable budget because Google Ads will not spend it otherwise.

4. Maximise Conversion Value

It’s one of the newest Google Ads bidding strategies and works much like Target ROAS, whereby Google Ads tries to deliver a high return on ad spend. Moreover, there’s no need to fix a target ROI; you can just let the algorithm deliver maximum profits.

5. Manual Bids

Manual CPC bidding ensures you have greater control over the bidding strategy, but it also means you must make the adjustments manually and spend more time handling costs. This bid strategy is only suitable for people well-versed in Google Ads; otherwise, opt for one of the Google Ads automated strategies.

6. Maximise Clicks

Among Google Ads’ automated bidding strategies, Maximise Clicks is one of the most popular as it tries to generate higher clicks based on your daily budget. But there are better bid strategies for sales since it needs to consider the relevance or quality of the strategy.

FAQs

1. What are the different types of Google Ad bidding strategies?

The different types of bidding strategies for Google Ads include:

• Target CPA
• Maximise Conversions bidding strategy
• Target ROAS bidding strategy
• Manual CPC Bidding
• Maximise Conversion Value
• Maximise Clicks
• Enhanced Cost Per Click
• Cost Per Thousand Impressions
• Cost Per Viewable Thousand Impressions
• Target Impression Share Bidding
• Cost Per View

2. What is the ad bidding process?

If you are wondering how ad bidding works, it is based on auction time bidding, whenever an ad space is available. When people ask how to win ad auctions, they must know about vacant spots on blog posts, search engine results pages, other websites, etc.

You bid to put your ad in the available space, and the ad auction process determines which ads show on top of the page. If you search for “Google Ad bidding explained”, you will see that an important consideration is deciding the purpose of the ads to make the most of the auction.

In most cases, you must focus on the following for ad bidding optimisation -

• Impressions
• Views
• Clicks
• Conversions

3. What is bid management?

Whether you have a portfolio bid strategy or opt for any other Google Ads campaign, the basic bid management process remains the same. Bid management is lowering or raising keyword bids to achieve the desired results from the Google Ads budget.

There are different types of bid strategies, but they all have the same purpose of determining where and in what position the ad is visible to consumers. You can further calculate how much you’re paying per click.

But since management is challenging even for seasoned businesses, using tools like Keyword Planner and Google Analytics can help.

4. What is an ad auction, and how does it work?

Ad auction is a part of the Google Ads campaign that determines whether an ad is eligible for a search, if it will show on the page, and in what position. When anyone conducts a Google search, the Google Ads system finds all relevant ads by matching them to the keywords.

Then the algorithm filters ads that aren’t eligible, such as those with a different target search page location or those reporting a privacy violation. Among the remaining ads, the rank is calculated based on the bid strategy, Ad Rank thresholds, ad quality, the purpose of the person’s search, ad formats and the impact of the extensions.

With more relevant keywords, the chances of ranking at the top increase.

5. What is cost-per-click bidding, and how does it work?

Cost-per-click is a Google Ads bidding strategy where you pay for each click on the ads. For this automated bidding strategy to be successful, you must fix a maximum cost-per-click bid; in other words, it’s the maximum you are willing to pay when someone clicks on the ad.

The maximum CPC is often less than the actual CPC because, at times, you have to pay less for clicks on the ad. But it will never be more than the maximum CPC bid amount.

6. What is automated bidding, and how does it work?

A Google Ads automated bidding strategy automatically sets bids depending on the possibility of the ad resulting in a conversion or click. Various automated bid strategies help you reach the desired business objectives.

The best part is that you won’t have to use guesswork or manually update the bids depending on keywords or ad groups. Google Ads algorithm sets the bids and ensures you get maximum clicks, conversions, visibility and a higher conversion value.

Also, most smart bidding strategies fall under automated bidding, conversion-based or value-based, based on the available information during the auction.

7. What is target CPA bidding, and how does it work?

Another popular smart bidding strategy is target CPA bidding, as Google Ads sets bids so that you get as many conversions as possible. With a target CPA, it’s important to determine the average cost you are willing to pay for every conversion.

For the best results, we suggest setting up conversion tracking before you get started with the target CPA. The algorithm uses historical information to automatically find the right bid for your ad every time it’s eligible to appear.

It helps understand the contextual signals during the auction, but note specific conversions might cost you more or less. However, the average cost will be equal to your target CPA.

8. What is Maximise Conversions bidding, and how does it work?

This automated bidding strategy sets bids for maximum conversions, thereby spending your budget. The algorithm features advanced machine learning to optimise and adjust bids while offering auction-time bidding capabilities for every ad.

Moreover, Maximise Conversions uses real-time data to manage the bids, but the downside is that it tries to spend the entirety of the daily budget amount. So, fix a daily budget after considerable thought because if you run short on cash, this automated bidding strategy may not be suitable.

Particularly important is switching to target CPA, target CPI or target ROAS when you have a business ROI.

9. What is manual bidding, and how does it work?

You can fix the maximum cost when consumers click on the ads through manual bidding. The best part is that it promises a good ROI because you have to pay only when a viewer clicks on the ad.

Depending on the business and the value of a sale, you can choose the maximum CPC. Initially, Google Ads sets a default CPC value that you can change to see how many clicks the ads get and how it impacts the business.

But since digital marketing and online traffic constantly change, it would be best to re-evaluate the manual bidding strategy regularly.

10. What is enhanced cost per click, and how does it work?

You can use an enhanced cost-per-click bid strategy to Maximise Conversion bidding or increase the conversion value. It combines Google’s automated bid strategies with manual biddings, such as target ROAS or target CPA.

You will find it increases the manual bid whenever the chances of making a sale or getting a conversion are high. Similarly, it lowers the bid amount when there are fewer chances of conversion.

In certain instances, when ECPC is used with third-party bidding strategies, it helps you enjoy certain aspects of smart bidding. But note that it operates differently for shopping campaigns, and only search campaigns are suitable when using ECPC for conversion value.

Using Google Ads’ Bidding Types

There are other forms of bid strategy, like portfolio bidding strategy, whereby you can club together Ads, multiple campaigns and keywords with just a few clicks. But the easiest way to determine the right bidding strategy for your needs is to evaluate the business using a professional management agency.

Ask yourself what you hope to achieve through the Google Ads campaign, making choosing a bid strategy relevant to the business easier. You must also consider the budget, as investing in a high-end bid strategy would be wiser when you are short of cash.

Most importantly, research all the campaigns and keep updating the strategy to keep up with the market trends. But if you find it challenging to manage everything, hiring a professional company that knows the ins and outs of running a successful Google Ads campaign would be best.

Alannah Picking

With over eight years of industry experience across Digital Marketing, Alannah entered the sitecentre® team in February 2023 as our lead account manager. She comes highly qualified, with a Bachelor’s Degree in Creative Industries from QUT (Queensland University of Technology) and a Postgraduate in Marketing. Alannah’s robust academic background and considerable experience make her an invaluable asset to the team.

Find them on their website: sitecentre®.