Google Ads Bidding Strategies Based on Goals

Google Ads Bidding Strategies Based on Goals
11 August 2022
When preparing your Google Ads campaigns, you’ve probably wondered what bidding strategy would be the best. Automated or manual bidding? Focusing on clicks or conversions? In today’s article, we’ll tell you how to choose the right strategy based on your Google Ads goals.
Table of contents: Google offers a few bidding types. You should choose the right one based on your campaign and goals. Keep reading to find out how to do it! As the name suggests, the reach campaign is aimed to build brand awareness by reaching as many people as possible. This goal is achieved mainly through graphic and video ads. However, search network ads also make it possible to achieve satisfactory results.  As you may guess, a positive brand image and trustworthiness can have a positive impact on sales. This campaign usually benefits from bidding strategies such as CPV (Cost Per View) and CPM (Cost Per Mile). When customers are already familiar with your brand, it's time to increase their interest and engagement. Do your best to present specific products or services, and provide all the necessary and reliable information about them to encourage interaction. All this is to convince the potential buyers that choosing your offer is a good decision. Don't forget about graphic and video ads. They can really do the job. A sales campaign is created to boost sales of products or services, and attract new potential customers. When conducting sales campaigns, it's particularly important to select the right target group. During this campaign, you should maximize conversion value bidding or your target ROAS. Search network and product ads are the most effective ad types at this stage of the sales funnel.
Our clients already know that Google Ads can benefit their businesses. Now you can check it yourself!

Manual or Automatic Google Ads Bidding Strategies

Google allows you to manually set a maximum bidding rate, which gives you more control over your cost per click. On the other hand, automatic bidding uses advanced machine learning. This means that Google selects the right bid for each query. During the auction, it takes into account many factors including the user's location, device type, operating system, time of day, language, and more. The higher the probability that a user will click or convert, the higher the bid.
Note that automatic bidding strategies also have their limitations. Google often requires a specific amount of data on a given account and ad impression time to set appropriate bids.

What Are the Types of Bidding Strategies in Google Ads?

Each campaign and advertising goal has a different bidding strategy.
  • CPM - Cost Per Mile means cost per thousand impressions of an ad. This strategy is only available for the search network. It's used to build brand awareness, increase the number of impressions, or boost your reach. If the CPM cost is $20, then the cost of one thousand impressions will be $20, regardless of whether someone clicks on your ad or not.
  • CPC - Cost Per Click means payment for a single click on a link redirecting to the advertiser's website. It's used in campaigns that are supposed to increase website traffic. It's available in the search network and ad network. You can set the maximum cost per click manually or automatically. The maximum bid (max. CPC) is the highest amount that you agree to pay for a click.
  • eCPC - Enhanced CPC is useful when conducting campaigns aiming at maximizing the number of conversions. This strategy combines manual and automatic bidding. This means that Google increases rates when the likelihood of a sale or other conversion increases and decreases them when the likelihood gets lower.
Enhanced CPC is available in the search network, and ad network, except for app download promotion campaigns and product campaigns. This Google ads bidding strategy is particularly beneficial for hotels.
Note: When Google finds a valuable auction, the eCPC strategy increases the maximum CPC rate. When this happens, you can expect to see a higher average CPC amount than the manually set bid. However, this will probably be only a short-term fluctuation, as your average CPC shouldn't exceed the maximum value in the long run.
eCPC only works for Google search for product campaigns. This strategy won't adjust bids when ads are displayed on partners' sites in the search network. In this case, it'll use automatic pricing.
  • Target CPA (Cost per Action) is the average cost of achieving one specific goal, meaning a situation when e.g. a user fills in and submits a contact form, subscribes to a newsletter, contacts a company, makes a purchase, etc.
It's useful when you want to obtain as many conversions within a specified budget as possible. It's available in the search network and ad network. This is a smart bidding strategy. While some conversions may cost less and some more, Google will aim to give you the optimal cost. If your campaign is supposed to promote an app, the target CPA has the same value regardless of the goal. This means that it doesn't matter if someone downloads or uses the app. The cost stays the same.
  • ROAS stands for Return on Advertising Spend. It's used when the campaign is supposed to maximize conversions while maintaining a return on advertising spend equal to or higher than the target value. In practice, this means that when Google decides that a query is likely to convert at a high value, it sets a high rate for that query.
  • CPV - Cost Per View is a strategy used only if you want to pay for watching a video or taking any other related steps such as clicking CTAs (call to action) or banners. An event is considered completed when a user watches at least 30 seconds of the video or interacts. This strategy is available in the ad network.
  • Maximize conversion bidding is a strategy that aims to optimize campaigns for conversions, meaning customers' actions that end in a purchase of a product, or service. In the case of this strategy, you can set a target CPA.
This means that intelligent systems will strive to achieve the highest number of conversions at a specific target cost of action. On the other hand, if you don't determine your target CPA, then you'll be achieving the highest number of conversions within the specified budget. automated bidding in google ads Maximize conversion bidding is a strategy that can be used only in search network and product campaigns. In this case, you can set your target ROAS, and the campaign will aim to achieve the highest possible conversion value while keeping the target ROAS. On the other hand, if you use this strategy without setting your target ROAS, Google will try to maximize the conversion value of the campaign within the total budget.

Is It Possible to Change Bidding Strategies in Google Ads?

Yes, your Google Ads bidding strategy can be changed virtually anytime. However, keep in mind that in this case your campaigns will go back to learning mode and your results may not be so spectacular even for a few weeks.

How to Change Bid Strategies in Google Ads?

Just log in to your Google Ads account, go to the "All campaigns" section, click "Campaigns" and then select the campaign you want to edit. google ads bidding strategies After selecting a specific campaign, click “settings”. how to change bid strategy google ads Then, go to the “bidding”, select your new strategy and click “save”. Voila. It’s ready! google ads bid strategy

Calculating the Actual Ad Costs

Determining the actual cost per click is a hard nut to crack, as the calculations are done individually for each auction when there is a chance your ad will be displayed (we’re talking about quality score, CPC offered, competition, and other factors). The actual cost per click (CPC) is the final amount an advertiser pays when a user clicks on an ad. When you set a maximum cost per click, Google doesn't have to comply with it, and the costs may be lower or higher than the maximum CPC. A higher actual CPC may take place when ads use enhanced CPC bidding. It also frequently happens that the actual CPC is lower than the maximum CPC because Google needs an amount that would allow you to outdo your competition shown just below your ad.
This means that if your ad has the same Quality Score as the competition and you set the maximum CPC at $2 but the competitor below you pays a maximum of $1.20 per click, then you need to pay $1.21 to beat them.
On the other hand, if there are no ads that are competitive, you pay a threshold value. This is a minimum value that isn't fixed and changes during each ad auction. It takes into account factors such as ad quality, location, device type, user, time of day, subject, landing page quality, expected click-through rate, and more. Ad ranking works the same way and takes into account similar factors plus the maximum cost per click. The cost per click for ads that appear above the organic search results is often higher than the cost for ads that appear below those results, even when there is no competition. This is because ads that appear at the top generally have a higher CTR and include extensions. Cost per view (CPV) bidding is about determining the amount an advertiser will pay when a user watches a video or interacts, e.g., clicks CTA. Setting your maximum CPV doesn't mean that Google will spend the entire amount. As with CPC, the actual CPV is often lower than the maximum CPV because you only have to pay enough to outbid the advertiser right below your ad. The actual CPV is influenced by the quality score (the relevance of the ad to a given customer, and the impression rate forecasts) and the ranking of the ad. The quality score multiplied by the maximum CPV gives you the ad ranking.
Example: Your maximum CPV is $15, but there are three other advertisers who have the same ad quality score as yours, but their maximum CPV is different. Max CPV of the first advertiser is $6, the second is $8, and the third is $10. Your offer is the best, but it doesn't mean you'll have to pay $15. You'll be only charged $10.01.
When determining the costs of advertisement impressions you should benefit from the CPM (Cost Per Mile) strategy. However, this option is only available in the advertising network. Of course, you can set the maximum rate for every thousand impressions of your ads, but you can't do the same for clicks.

CPC vs CPM Bidding in the Ad Network

Ads with different bidding strategies can compete with each other for the same positions in the ad network. When talking about ads with maximum CPM, Google estimates how much an advertiser is willing to pay per 1,000 impressions. On the other hand, in the case of a maximum CPC rate, it evaluates the number of clicks an ad that is displayed 1000 times can get. Based on this, it chooses the ad that has more potential. Google Ads offers numerous bidding strategies. It’s a good idea to make a choice based on your goals. If traffic and clicks are your main focus, go for CPC. On the other hand, if you’re trying to increase your brand awareness, pick CPM, and go for CPA to boost conversions. Don’t be afraid to test new solutions, it’s an important step in optimizing every campaign. Hopefully, thanks to our article you’ll be able to easily select a Google Ads bidding strategy that corresponds to your goals. If you need any help just contact our specialists! They'll be more than happy to assist you.
Karolina Pyznar SEM Delante
Karolina Pyznar

Junior SEM Specialist

A Management graduate and currently a student of Economics at the Cracow University of Economics. She started her adventure at Delante with an SEM internship in December 2021. She currently holds the position of Junior SEM Specialist. Her special interest from the professional angle is Internet marketing, and she is no stranger to Google market changes. Privately, she enjoys traveling, sport, especially gym.

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