There are six different bidding strategies you could employ when using Google Ads. Alexis Pratsides guides you through them, as well as how to work out which strategy is right for you

Whether you’re an ecommerce merchant or a self-employed contractor, search engines are fundamental to your success. They’re used by countless potential customers every day to search for businesses online.

Google Ads –

formerly known as AdWords

– provides a simple way to make the most of that opportunity, targeting potential customers with paid ads at the top of the search engine results pages (SERP). 

Sounds simple, right? Not quite. Without the right strategy, Google Ads bidding can be costly and provide very little return on investment. Fortunately, with the right know-how, you can make the most of your Google Ads campaigns with the optimal bidding strategy.

How does Google Ads work?

Simply put, Google Ads allows you to target a specific demographic of people based on their search queries. 

Start by choosing the sex, age and location of the people you want to reach (more advanced options include parental status and even household income). You can then choose what keywords and phrases they search for and bid on them to try and secure a place at the top of the Google’s result pages.

Like an auction, popular keywords and phrases have a higher price tag – because more users want to target them. It’s then up to Google to determine which ads are shown where. This is based on two key factors:

• 
  Maximum bid
  
  : This is the highest bid you have entered for a given key phrase.
• 
  Quality score
  
  : A metric determining how relevant your ad is to the search term, and how useful it will be to the user.

Google doesn’t want to send its users to irrelevant pages. As a search engine, its essential purpose is to provide users with what they’re looking for. So, rather than simply giving ad space to the highest bidder, they give each site a quality score. Ads are then ranked based on their combined quality score and bid.

What are the different bidding strategies?

On the one hand, it’s smart to optimise your landing pages for pay-per-click ads, to improve your quality score, increase the likelihood of winning ad space and decrease the cost of doing so. However, it’s also important to ensure you’re using the right bidding strategy. Here are some of the most popular methods…

1. Manual cost-per-click (CPC)

Manual CPC is essentially the default bidding strategy. You set a bid for an ad group with several keywords or choose specific bids for each key phrase individually. Your bids can then be adjusted once you see how your ads perform for each keyword. 

This strategy gives you total control over bids, with no automation whatsoever. However, it can become less suitable as you take on more campaigns. It’s almost impossible to effectively manage a wide range of ads targeting different keywords.

2. Enhanced cost-per-click

While manual CPC is entirely controlled by you, enhanced CPC uses a small amount of automation to adjust and improve your ads. So, you set default bids for specific keywords or ad groups, then Google Ads will make small tweaks to improve their performance.

This could be a higher bid to secure more clicks or a higher conversion rate, or even a decreased bid if the data suggests you could benefit. Essentially, it takes the leg work out of Ads once your campaigns are set up. You set your defaults, then Google’s automated calculations fine tune them based on the performance data.

3. Target cost-per-action (CPA)

Every ad has a cost-per-action. Rather than the cost-per-click, it’s the average cost it takes for a certain action – whether it’s a sale, subscription or enquiry. Target CPA bidding optimises your bids based on a desired CPA using an array of data on clicks and conversions, devices and audience lists.

Target CPA is particularly useful if the CPA is a key part of your advertising strategy. However, to meet a lower CPA, Google will typically reduce the number of conversions overall. Your campaign will be efficient but may not be as productive as you need.

4. Portfolio bidding strategy

As the name suggests, a portfolio bidding strategy is useful when you have a whole portfolio of ad campaigns. It groups multiple campaigns together, along with their ad groups and keywords.

The whole thing is goal-driven, so you set a desired cost-per-action (CPA), which is consistent across all campaigns in a given portfolio. Google Ads then optimises your campaigns with a view to achieving this common CPA.

This strategy is useful when you have several campaigns, products or services which are equally valuable to your business. However, that’s not the case for some companies. Let’s say you’re running an ecommerce store – it’s unlikely all your products have the same value, meaning you will have a different target CPA for each of them.

5. Maximise conversions

Another automated strategy is maximising conversions. This strategy has one central goal – to get the most conversions for your money. You can control your budget and leave Google’s automated systems to find the best place for that budget to maximise conversions.

It’s well worth a try. After all, a successful maximise conversions strategy will provide the best results for your budget. However, it relies on a maximum budget. If you’re working without a set budget and just want the best results, it’s not possible to find the maximum conversion rate.

6. Cost-per-thousand-impressions

It’s not all about conversions and sales. Some advertisers

value the exposure gained through PPC advertising

. While the other strategies focus on conversions and clicks, this strategy is centred around impressions – basically, whenever a user views your ad. 

Let’s say you want to raise brand awareness and make your target audience familiar with your company. It’s possible to bid based on the cost-per-thousand-impressions, so you pay X amount for every 1000 people who see your ad – regardless of clicks. You can appear above other businesses without being billed for clicks.

This way, you get maximum exposure without paying for clicks that aren’t actually the end-goal. The problem? It’s rare that businesses want to advertise based solely on exposure. Not only that, not all ‘impressions’ are from users who acknowledge your ad and your brand. It simply means your ad has appeared on a page they visited.

Which strategy is right for you?

A well-executed pay-per-click campaign can provide valuable leads and conversion for your business. Your choice of bidding strategy is crucial to its success. So, which is best? In truth, there is no one-size-fits all strategy. It depends on a range of factors:

• 
  How many campaigns do you have?
  

Manual CPC is a good starting point and may even be the best option in the long-term. But if you decide to create multiple campaigns, you may find it hard to keep track of them.

• 
  How much time do you have?
  

Not everyone has enough time to invest in their campaigns. Sound familiar? It’s probably best to opt for an automated approach.

• 
  How much do you know?
  

Google’s automatic data analytics and calculations are pretty advanced. Unless you have significant expertise, it could be more productive to leave it to them rather than tweaking things yourself. 

• 
  What are your goals?
  

It’s paramount to establish clear objectives for your PPC campaigns. Maximum conversions, the right CPA or just exposure? This will help determine the best bidding strategy for you.