The Complete Guide to Google Ads Bid Strategy (with Examples)

What Is a Google Ads Bid?

A Google Ads bid represents the amount you're willing to pay for a click on your advertisement. This bid is pivotal in determining your ad's placement on the page, directly impacting its performance. A higher bid often translates to better ad placement, potentially leading to more clicks, increased website traffic, and greater opportunities to enhance your business's return on investment (ROI).

How Google Ads Bidding Works

Google Ads conducts an auction for each available ad space, whether on a search engine results page (SERP) or within the Google Display Network (GDN). Marketers bid on these ad spaces, with higher bids increasing the likelihood of winning and securing ad placement. However, Google Ads’ auction process isn’t solely based on the highest bid. Several factors influence the outcome of each auction, including:

Max cost per click (CPC): The maximum amount you’re willing to pay for a click on your ad.

Quality score: An evaluation of your ad’s quality and relevance based on expected click-through rate (CTR), ad relevance, and landing page experience.

Ad Rank thresholds: Minimum quality requirements set by Google Ads to ensure users are exposed to high-quality advertisements.

Auction competitiveness: The closeness in Ad Rank between competing ads determines the level of competition for a specific ad placement. A larger gap in Ad Rank can lead to higher certainty of placement but potentially at a higher CPC.

Search context: Google Ads considers various factors, such as search terms, location, device type, and time of search, to deliver the most relevant ads to users.

Ad assets and formats impact: Additional ad assets, like phone numbers or links, can enhance ad effectiveness. Google Ads predicts the impact of these assets on ad performance to improve visibility and engagement.

These factors, along with industry competitiveness, contribute to your Ad Rank, which influences your ad’s placement on Google’s SERPs or GDN. A higher Ad Rank can secure a more prominent placement, even if your bid is lower than others. It’s essential to design quality ads and develop a successful bidding strategy to maximize ad performance, leading to more clicks and conversions and ultimately increasing ROI.

Summary of How Google Ads Bidding Works:

  • Choose a Google Ads bid strategy based on your objectives, such as increasing clicks, visibility, or conversions.
  • Set your bid, specifying the maximum amount you’re willing to pay for each click.
  • Enter the auction, which occurs every time someone searches on Google, competing with other advertisers for the same keywords.
  • Win the auction by having a relevant ad and a competitive bid, ensuring your ad is displayed to the searcher.
  • Pay for the ad based on what’s needed to outbid the next advertiser, ensuring you pay a competitive price for your ad placement.

Note You can set a budget to control your daily spending. Once your budget is reached, your ads will no longer be displayed for that day.

Types of Google Ads Bid Strategies

Manual Cost-per-Click (CPC) Bidding Manual CPC bidding allows you to set and adjust bids at the keyword or ad group level, specifying the highest amount you’re willing to pay for a click on your ad for each keyword. This hands-on approach provides direct control but requires active campaign management for optimal effectiveness.

Automated Bidding Automated bidding strategies use algorithms to optimize bids for your ads, focusing on performance goals to maximize clicks or conversions. This type of strategy saves time and optimizes campaigns for better ROI, making it ideal for reducing bid management time without compromising ad performance.

Smart Bidding Smart bidding, a subset of automated bidding strategies, optimizes for conversions or conversion value in real time using Google’s AI. It utilizes “auction-time bidding” and considers various signals like device, location, and time of day for precise bid adjustments. Smart Bidding is suitable for those seeking AI-driven bidding efficiency, especially for conversion optimization.

How to Choose a Bidding Strategy Aligned with Campaign Goals

Align your bidding approach with your advertising objectives, whether focused on clicks, impressions, views, or conversions, to impact campaign success significantly. For instance, a sales-focused campaign may benefit from conversion-focused bidding, while a brand-building campaign may prioritize impression-based bidding.

Consider the following basic goals when choosing a bidding strategy:

For direct actions and conversions: Smart Bidding optimizes bids based on conversion likelihood, ideal for driving actions like purchases or signups.

Generating website traffic: CPC bidding is cost-effective, paying only for clicks, and is suitable for increasing site visits.

Boosting brand awareness: Cost-per-thousand-viewable-impressions (vCPM) bidding reaches a large audience, paying for every thousand ad displays.

Increasing video ad views and interactions: Cost-per-view (CPV) or cost-per-thousand-impressions (CPM) bidding is effective for video campaigns.

Product or brand consideration through video ads: CPV is suitable for campaigns to increase interest in your product or brand through video content.

Google Ads Bidding Strategies Unveiled

Mastering each bidding strategy is crucial for achieving your search engine marketing (SEM) goals, such as lead generation and sales boost. Let’s delve into each Google Ads bidding strategy, understanding when and why to use them, along with their advantages and limitations.

Manual Cost-per-Click (CPC) Bidding

This strategy suits campaigns aiming to drive website traffic, offering precise budget control. Its primary focus is on traffic generation while allowing you to retain control over each cost per click. Opt for this strategy if you prefer direct control over your campaign costs.

How Manual CPC Bidding Works

  • Determine the maximum amount you’re willing to pay for a click on your ad.
  • Manually adjust bids to manage spending and align with your advertising budget.
  • Regularly monitor and modify bids to optimize ad performance.

For instance, a business selling high-value items like electronics might use Manual CPC to manage costs while targeting high-intent buyers. Similarly, a local service provider, such as a plumber, could set bids for specific services to maximize ROI. Manual CPC bidding is applicable to both the Search and Display Networks.

Advantages of Manual CPC Bidding

  • Quick response to market changes or campaign data.
  • Detailed management of bids at the keyword or ad group level.
  • Ability to adjust bids for high-performing keywords or placements to allocate budget effectively.

Limitations of Manual CPC Bidding

  • Time-consuming.
  • Requires constant oversight and regular adjustments.
  • Potential risk of over or underbidding due to manual handling.

Enhanced CPC (ECPC) Bidding

Enhanced CPC (ECPC) bidding is a semi-automated strategy that adjusts your manual bids to enhance conversion opportunities. It strikes a balance between manual control and automation efficiency.

How Enhanced CPC Bidding Works

  • Adjust manual bids for each auction based on the likelihood of a click leading to a conversion.
  • Utilize auction-time signals like browser, location, and time of day for bid optimization.

ECPC aims to keep the average CPC below your maximum set bid but may temporarily exceed this limit for high-potential conversion opportunities. For example, if you’re selling cakes and set your max CPC to $1, ECPC might increase your bid to $1.70 for an auction likely to lead to a store visit, but reduce it to $0.30 for one more likely to result in a website visit without conversion. ECPC is available on the Search Network and Display Network (except for app install campaigns).

Advantages of Enhanced CPC Bidding

  • Strikes a balance between manual control and automated efficiency.
  • Can adapt bids for higher value conversions, prioritizing more profitable clicks.
  • Offers more manual control compared to fully automated Smart Bidding strategies like target cost per action (tCPA) and target return on ad spend (tROAS).
  • Operates alongside your campaign settings, adjusting bids within the confines of your max CPC.
  • Does not require setting explicit targets for CPA or ROAS.

Limitations of Enhanced CPC Bidding

  • Optimal performance with ECPC relies on implementing conversion tracking for guiding bid adjustments.
  • ECPC may temporarily increase your average CPC to exceed the maximum CPC bid for opportunities deemed likely to result in conversions.

Cost-per-Thousand Impressions (CPM) Bidding

CPM bidding emphasizes visibility and brand awareness over direct clicks or conversions. With this strategy, you bid and pay for every thousand impressions your ad receives, making it suitable for campaigns focused on exposure.

How CPM Bidding Works

This strategy is suitable for:

  • Brand awareness campaigns: To increase brand visibility and recall.
  • Video ad campaigns: For boosting views or interactions with video content.
  • Google Display Network: For display ads where the goal is to increase ad views.

For instance, imagine a company is launching a new product line. They can use CPM bidding to increase the chances that their promotional ads reach a wide audience across the GDN, promoting product visibility and brand recognition.

Another form of CPM is viewable CPM (vCPM), where you only pay when users can see your ads.

Advantages of CPM Bidding

  • Expands your ad’s reach for greater brand exposure.
  • Provides control over impression costs, effective for managing budgets in awareness campaigns.

Limitations of CPM Bidding

  • Prioritizes ad exposure over engagement, potentially leading to spending on ads that don’t result in clicks or conversions.

Target Cost-per-Action (CPA) Bidding

Target CPA bidding helps you optimize for conversions while adhering to an average cost per action. This automated bidding strategy is ideal when you have a clear ROI target and want each conversion to bring similar value to your business.

How Target CPA Bidding Works

  • Google Ads sets bids to achieve as many conversions as possible at your targeted CPA.
  • Google Ads uses your campaign’s historical information and real-time contextual signals at auction time.
  • While some conversions may cost more than your target, others may cost less. Google aims to balance these to align with your set target CPA.

For example, if you set a target CPA of $5, Google Ads will aim to secure as many conversions as possible at this average rate, making auction-time adjustments based on various signals to enhance the bid’s effectiveness. Some conversions may cost more than $5, but others may cost less, resulting in an average close to $5.

Advantages of Target CPA Bidding

  • Adjusts bids using real-time signals such as device, location, and time of day.
  • Aids in achieving a specific return on investment by maintaining a consistent cost per action.

Limitations of Target CPA Bidding

  • Despite targeting a consistent CPA, the actual CPA may fluctuate due to external influences such as changes to the website or shifts in market competition.
  • Target CPA bidding requires historical conversion data, which may be unavailable for new campaigns or those with low conversion volumes.
  • To maintain CPA targets, Google Ads might limit ad exposure in more competitive or expensive auctions, potentially reducing overall visibility.

Target Return on Ad Spend (tROAS) Bidding

Target ROAS bidding is a Smart Bidding strategy that helps you optimize your campaigns for conversion value relative to your ad spend. This approach is particularly useful when you have specific ROI targets and when different conversions hold varying values.

How Target ROAS Bidding Works

  • Utilizes Google’s AI to predict the potential conversion value at the time of a user’s search.
  • Adjusts bids in real time to maximize conversion value while striving to achieve your specified ROAS.

For example, suppose you operate an online mug store and aim for $13 in sales for every $10 spent on advertising, setting your target ROAS at 130%. Google Ads will adjust your bids to increase conversion value while aiming to maintain your ROAS at 130%.

Assigning accurate values to the conversions you track helps you better understand your campaign’s ROAS and optimize your marketing efforts effectively.

Advantages of Target ROAS Bidding

Available for use in both standard and portfolio strategies across multiple campaigns, including Search and Shopping ads.

Factors in real-time signals like device and location for bid adjustments.

Limitations of Target ROAS Bidding

Most campaign types require at least 15 conversions in the last 30 days to effectively use this strategy, as this data provides a reliable foundation for the algorithm to predict future performance.

Google AI needs a substantial history of conversions to make more accurate predictions and adjustments, ensuring that your target ROAS is based on solid, real-world data.

Maximize Conversions Bidding

Maximize conversions bidding utilizes your entire budget to secure the most conversions. This bid strategy is ideal if your primary goal is to fully utilize your budget without targeting a specific ROI or CPA.

How Maximize Conversions Bidding Works

  • Analyzes your campaign’s past performance and considers real-time contextual signals during each auction.
  • Adjusts bids dynamically to secure the most cost-effective conversions within your budget.
  • Tailors bids for each auction to increase the chances of winning valuable ad placements.

For example, a retailer looking to clear seasonal inventory could use a maximize conversions bid strategy to ensure Google Ads uses their entire advertising budget, maximizing exposure and potential sales without targeting a specific cost per sale.

Advantages of Maximize Conversions Bidding

  • Aims to fully utilize your daily budget to get as many conversions as possible.
  • Adjusts bids for each auction in real time to maximize conversions within your budget.
  • Quickly adapts to search behavior and competition changes for more competitive bids.

Limitations of Maximize Conversions Bidding

  • Aims to spend your entire budget, which might lead to increased spending if your current expenditure is below your set budget.
  • Not ideal for campaigns with specific ROI goals like target CPA or ROAS.
  • Requires monitoring after implementation to ensure alignment with your campaign goals and budget control.


Maximize Conversion Value Bidding

Maximize conversion value bidding is tailored for campaigns aiming to optimize the highest possible conversion value within a given budget. This approach works well when conversions vary in value for your business and you’re not targeting a specific ROAS.

How Maximize Conversions Value Bidding Works

  • Utilizes AI to set bids at auction time, aiming to maximize the total value of conversions, such as sales revenue or profit margins.
  • Utilizes your specified budget to optimize for the highest conversion value.
  • Considers real-time signals and historical data to determine optimal bids for each auction.

You should consider using maximize conversion value bidding if specific conversions, such as selling a high-end product, hold more value than others, or for campaigns with varied conversion goals, such as different product categories or services with varying profit margins.

Advantages of Maximize Conversions Value Bidding

  • Focuses on maximizing the total conversion value within your budget, ideal for ROI-driven campaigns.
  • Adapts to real-time market changes and search behavior, potentially increasing conversion value under varying conditions.

Limitations of Maximize Conversions Value Bidding

  • Performance is heavily influenced by the set advertising budget, limiting its effectiveness if the budget is too low.
  • Relies on accurate conversion tracking and value assignment to gauge performance effectively.
  • Offers less control over targeting specific types of conversions, focusing instead on overall value.
  • While aiming to maximize value, it may lead to higher costs per conversion in competitive markets.

Target Impression Share Bidding

Target impression share bidding aims to maximize your ad’s visibility in Google’s SERPs. This strategy focuses on placing your ad at the top of the page—either at the very top, among the top positions, or anywhere else on the search results page, depending on your settings.

How Target Impression Share Bidding Works

You set the desired percentage of ad impressions your campaign receives. It’s effective for campaigns prioritizing brand visibility, especially when targeting specific brand terms.

For example, suppose you run a local grocery store competing with bigger stores. A target impression share strategy can help ensure your brand remains visible in crucial searches. If you want your ad to appear 100% of the time for searches related to your brand, setting the target impression share to 100% aims to achieve this visibility.

Advantages of Target Impression Share Bidding

  • Aims to increase the likelihood of your ad appearing in the desired position, boosting brand presence.
  • Allows you to implement precise targeting based on where you want your ads to show up in the search results.

Limitations of Target Impression Share Bidding

  • This strategy may not align with every campaign’s goals, especially those not focused on brand visibility.
  • May lead to higher costs in competitive markets to maintain the desired impression share, impacting budget efficiency.

Maximize Clicks Bidding

Maximize clicks is an automated Google Ads bid strategy that aims to get as many clicks as possible within a specified budget. This strategy is ideal if your primary goal is to drive traffic to a website.

How Maximize Clicks Bidding Works

When you select maximize click bidding, Google Ads automatically sets your bids to attract the highest possible clicks within your average daily budget.

For example, if you have a seasonal promotion, using maximize clicks can help drive substantial traffic to your offer page without exceeding your budget.

Advantages of Maximize Clicks Bidding

  • Efficiently uses your budget to increase the total number of visits to your website.
  • Offers the option to set a maximum CPC bid limit to prevent overspending on a per-click basis.
  • Ideal for campaigns with the primary goal of driving traffic, requiring less hands-on adjustment and oversight.

Limitations of Maximize Clicks Bidding

  • Prioritizes increasing click volume potentially at the expense of click quality, which may not align with specific conversion value or goals.
  • May attract clicks from less relevant audiences, leading to lower conversion rates.
  • Without setting a maximum CPC bid limit, you might pay more per click than intended, affecting cost efficiency.

Cost-per-View (CPV) Bidding

CPV bidding is particularly suitable for video ad campaigns where engagement, such as views or interactions, is the primary goal. It’s especially effective for campaigns that aim to increase product or brand consideration through video content.

In CPV bidding, you pay for video views and interactions, such as clicks on call-to-action (CTA) overlays, cards, and companion banners. Google Ads counts a view when someone watches 30 seconds of your video ad (or its entire duration if shorter than 30 seconds) or interacts with the ad. This method allows you to set the maximum price you’re willing to pay for a view when setting up your video campaign.

How CPV Bidding Works

  • You decide to advertise on a platform like YouTube, where CPV bidding is commonly used.
  • You target your ad to local viewers interested in your product or service, such as baking, cooking shows, or cake decoration.
  • You set a CPV bid, meaning you’ll pay each time someone watches a significant portion of your video.
  • Since your video is engaging and showcases the quality and artistry of your cakes, viewers who watch it are more likely to be interested in visiting your bakery.
  • You only pay when someone watches your video for 30 seconds or interacts with the video, making it a cost-effective way to ensure potential customers see your ad.

Advantages of CPV Bidding

  • Ideal for campaigns where video interaction is more valuable than clicks to a website.
  • Helps you manage your budget effectively as you set the maximum amount you’re willing to pay per view or interaction.
  • Provides video ad reporting with data on how viewers engage with your content.

Limitations of CPV Bidding

  • Less suited for campaigns where the main objective is to drive traffic to a website rather than engage with video content.

Tips for Google Ads Bidding

Adjust your bids and test automated strategies to improve your Google Ads. Here are some practical methods and tools for better campaign targeting and efficiency.

Use Bid Adjustments

A bid adjustment is a percentage change applied to your bids, giving you the flexibility to bid more or less in certain situations. Bid adjustments enable you to modify your bidding strategy based on specific factors like device type, location, and time of day. This customization enables you to allocate your budget more effectively by increasing bids in scenarios where your ads perform best.

For example, let’s say you’re running a campaign for a coffee shop. You notice that your ads get more clicks during early morning hours. You could set a bid adjustment to increase your bids by 30% from 6-10 a.m., enhancing your ad’s chances of appearing during this prime time.

The types of bid adjustments include:

Device: Adjust bids for different devices like computers, tablets, or mobile devices.

Location: Modify bids for ads served in specific geographic areas.

Ad scheduling: Change bids for campaigns during certain days or hours.

Targeting methods: Apply adjustments for topics, placements, and other targeting methods on the Display and Search Networks.

Remarketing lists for Search Ads: Adjust bids for users on specific lists to optimize remarketing campaigns.

Interactions (call adjustments): Increase bids for mobile devices to enhance the frequency of call interaction ads.

Demographics: Modify bids based on gender, age, and household income demographics.

To add a bid adjustment, click “Campaigns” > “Audiences, keywords and content” in your Google Ads account.

Select the element you want to modify from the drop-down menu, such as “Locations.”

 Click the pencil icon under the “Bid adj.” column to edit the bid adjustment.

Set a percentage increase or decrease and click “Save.”

Experimenting with Automated Bidding

Testing automated bidding can help you focus on maximizing conversions or conversion value, saving you time and uncovering opportunities that manual bidding might overlook, such as optimal bid amounts and valuable audience segments.

Semco’s PPC Keyword tool can assist you in refining your keyword targeting and setting up negative keywords to optimize automated bidding with a targeted and well-organized keyword set. Negative keywords are terms you exclude to prevent your ads from appearing for specific search queries.

From the left-hand navigation bar, click the “Advertising” drop-down and select “PPC Keyword Tool.”

Select your project or domain.

Note: You must create a project for your domain first.

Click the “Negatives” tab next to “Keywords.”

Add negative keywords based on how specific or broad you want the filtering effect to be. Specific negative keywords narrow your ad’s reach, aligning it with targeted searches. Broad negative keywords expand the filter, preventing your ads from appearing in a larger array of searches.

For example, if you’re advertising for an Italian restaurant, you might use “fast food” as a broad negative keyword to avoid irrelevant searches. A specific negative keyword could be “pizza delivery” if your restaurant doesn’t offer this service.

Use campaign-level negative keywords for broad exclusions across your entire campaign. For more precise control within certain ad groups, apply group-level negatives. This approach is particularly effective when different ad groups cater to varied aspects of your offerings and need distinct keyword strategies.

Select whether you want to add your negative keyword manually or via a .txt file by clicking the green “+ Negatives” button.

After organizing your keywords, upload the negative keyword list to your Google Ads to implement them in your campaign.

Here are some Semco PPC tools and tips to improve your automated bidding in Google Ads:

• Use Advertising Research reports to identify keywords where competitors are changing positions and analyze their ad copies for insights into their strategies.

• Use the Ads History tool to examine the performance history of specific keywords in paid campaigns. This tool provides valuable data on how competitors adapt their keywords to seasonal trends, offering guidance for your bidding strategies.

• Use the PLA (Product Listing Ads) Research tool to get insights into display campaign performance, helping to inform your bidding choices in similar contexts.

• Identify and include keywords with lower competition in your campaigns. These keywords can offer a more cost-effective way to reach your audience, enhancing the efficiency of your automated bidding.

• Bid on branded keywords (keywords that include your brand name) to control your brand narrative in search results. This helps with visibility for searches directly related to your business, which can improve click-through rates and conversions.

Use Google Ads Scripts

Google Ads scripts are an advanced yet highly effective tool for automating and optimizing your bidding strategy. These scripts are snippets of JavaScript that you can set up within Google Ads to automate various aspects of your campaigns based on specific criteria, such as time intervals or performance metrics.

Google Ads scripts enable you to:

• Handle repetitive tasks, like bid adjustments, freeing up your time for more strategic activities.

• Deploy sophisticated bidding strategies that would be too complex or time-consuming to manage manually.

• Adjust bids in response to real-time market conditions, ensuring your campaigns remain competitive and efficient.

Scripts require some technical expertise in JavaScript, so you might need a developer to assist you. Implementing Google Ads scripts involves:

• Determining what aspects of your campaigns you want to automate or optimize using scripts.

• Developing a custom script or finding pre-written scripts that suit your needs.

• Testing the script in a controlled environment to ensure it works as expected, then implementing it in your live campaigns.

Check Google’s developers page to get started with your first Google Ads script.

Mastering Google Ads Bidding for Success

Understanding and applying bid strategies can help you align your campaigns with your specific goals, manage budgets more efficiently, and significantly boost your ad performance. As you implement a Google Ads bid strategy, monitor results continuously to learn from feedback about how it impacts your campaign goals and adapt accordingly. This approach enables you to improve campaign performance and ROI.

At SEMCO, we leverage strategies like these to enhance bidding strategies for clients, streamlining campaign management and optimization. We provide insights into competitive strategies, keyword analysis, and performance tracking to refine Google Ads campaigns for optimal results. Get started today with a free website audit.

FAQs

What Is Bid Strategy in Google Ads?

A bid strategy in Google Ads refers to the method you use to determine how much you’re willing to pay for each click on your ads. It’s a crucial aspect of your ad campaign as it influences your ad’s visibility and the likelihood of achieving your advertising goals.

How Are Bid Strategies Used in Google Ads?

Bid strategies can be classified into manual and automated types. Manual bidding gives you control over bid amounts for different ad groups or keywords. Automated strategies use Google’s algorithms to optimize bids in real time for the best results. For example, maximizing clicks aims to get the most clicks within your budget. In contrast, targeting CPA focuses on getting as many conversions as possible at or below your target CPA.

How Do I Change Bidding Strategy in Google Ads?

Here’s how to change the bidding strategy in Google Ads:

Navigate to “Campaigns” in your Google Ads account.

Click the “Settings” icon next to the campaign you’d like to change.

Click “Bidding” from the settings menu.

Click “Change bid strategy.”

Select your desired strategy.

Click “Save” to apply your changes.