[Bidding Playbook] Google Search Ads Bid Strategies Explained in Full

Bidding strategy matters a great deal in running Google search advertising.
Choosing the strategy that fits your purpose gets more out of the advertising.

This article covers what bidding strategies are in Google search advertising, and which we recommend.

1. What is a bidding strategy in Google search advertising?

A bidding strategy in Google search advertising is
the method by which the bid you enter into the auction for ad placement is decided.
Choosing the right strategy for your advertising objective gets the most out of it. The wrong one will not deliver what you expected, so give it proper thought.

There are two ways to set bids: adjusting them yourself, which is manual bidding, and having Google adjust them from what its learning produces, which is automated bidding. Within each you can also choose a strategy according to which figure — conversions, clicks and so on — you want to prioritise.

2. Types of bidding strategy

To choose an effective strategy, start by setting the goal for the advertising.
For instance, “increase traffic to our site” or “win conversions” —
without a clear goal you cannot set the right strategy.
If you have no goal yet, work out what you should be aiming at first.

■Types of goal
・Sales
・Leads
・Website traffic
・Product and brand consideration
・Brand awareness and reach
・App promotion
・Store visits and in-store sales
・No goal specified
Reference: Google official help

With the goal set, choose the strategy best suited to what you want to win — clicks, impressions, conversions.

The strategies are as follows.

■Automated bidding
　・Maximise clicks
　・Target impression share
■Smart bidding
　・Target cost per action (CPA)
　・Target return on ad spend (ROAS)
　・Maximise conversions
　・Maximise conversion value
■Manual bidding
　・Manual cost per click
　・Enhanced cost per click (eCPC)

3. What each strategy does

Now let us go through the strategies in detail.

3.1 Automated bidding

Automated bidding sets the bid for you, according to your goal.
Because the adjustment is automatic, it saves a great deal of the work of setting bids.
Automated bidding splits into three according to the strategy chosen.

Maximise clicks
This adjusts bids automatically to get as many clicks as possible within the campaign budget. It suits the early stage of a campaign when you want click data, or when you want more traffic to the site, or to build awareness.

Target impression share
Target impression share works well when the goal is something like raising brand awareness.
Bids are set automatically so that the ad appears at the very top of the Google results page, in the top section, or anywhere on the page.

3.2 Smart bidding

Smart bidding is a form of automated bidding.
Where conversions matter in particular, we recommend it, because it removes most of the laborious and guess-based work of setting bids.
It uses machine learning to optimise conversions, or conversion value, for each auction.
This is known as auction-time bidding.
It also takes account of signals at auction time such as device, location, time of day, language and operating system, so every search can be handled according to its context.

Target cost per action (target CPA)
Bids are set automatically to win as many conversions as possible at the target cost per conversion set for the campaign. If you set a target of ¥1,000, for example, bids are adjusted automatically to win as many conversions as possible at an average of ¥1,000. Because conversions grow while the cost per conversion is held, budget is not wasted.

Target return on ad spend (ROAS)
Target ROAS is the average conversion value you want for the ad spend you put in. Where you are optimising to maximise conversion value, target ROAS lets you raise that value while aiming at a particular return. It is an effective strategy where there is a range of prices, as on an e-commerce site. Note: ROAS (return on advertising spend) measures how much of the ad spend comes back, and is found by dividing the revenue from the advertising by the spend.

Maximise conversions
This maximises conversions within the budget you specify while holding the target cost per conversion.
Where no target cost per conversion is set, the budget is spent to win as many conversions as possible. It works when you have not yet fixed a target cost per conversion, or when you simply want more conversions. It resembles target CPA, and in fact the same machine learning is at work — which is why, from 2021, you have been able to set a target cost per conversion optionally.

Maximise conversion value
Instead of targeting a particular return on ad spend, this optimises to maximise conversion value while spending the budget neither over nor under.
As a result, bids in auctions with a high conversion value may go higher than in auctions with a low one.

3.3 manual bidding,

Manual cost per click
This is what you set when the focus is on winning clicks. Under manual CPC you set the maximum you will pay for a click on your ad yourself. You are charged only when a user interested in the ad actually clicks it, so the price can be set rationally.
For instance, if 10 of the 200 users shown the ad click it,
you are charged for those 10 clicks only, and nothing for the other 190 impressions.
Different bids can be set for each ad group, keyword and placement.

Enhanced cost per click (eCPC)
Enhanced CPC is a semi-automated strategy that combines manual bidding with smart bidding. It raises and lowers the CPC you set by hand, according to the situation, from past data.
Use it before switching from manual to automated bidding, or when you want to keep bid management largely in your own hands.

4. The strategies Google recommends

Next, the strategies Google recommends.
The broad sequence is as follows.

① At campaign launch, set the strategy to Maximise conversions
② Once around 30 conversions have come in, switch to target CPA

If you choose smart bidding,
bids are adjusted automatically, which saves a great deal of setup work.

There are cases where Maximise conversions is better not used from the outset.

The reasons are as follows.
■The ads may not serve
　If you have just started and have no record, the ads may serve less than expected.
■The cost per click tends to climb
　With nothing to go on, there is a strong tendency to bid
high so that the keywords you set match the search queries, and the cost per click can climb.
■The daily budget is easily overshot
　By design, Google Ads can spend up to twice the daily budget you set.

So what settings are best when you first start serving?
From preparation until data has built up, we recommend the following.

1. Start with Maximise conversions
First set Maximise conversions, and see which keywords bring how many conversions within the budget. The aim at this stage is to get a feel for the market and a sense of where CPA will land.
There are cases where manual adjustment such as manual CPC is recommended, but holding back Google’s machine learning from the outset leaves you unable to see how the budget actually spends in the market.

2. Set the match type to phrase match
Where the budget is small, or the keywords are already fairly narrow, we recommend phrase match.
Where there is some room in the budget, use broad match as far as possible to widen the search queries and avoid missing opportunities, so information comes in more readily.

3. Bring in micro-conversions
If only a few enquiries a month look likely, setting a micro-conversion short of the final one — reaching the enquiry form, say — gives you much more data to judge later work by.

Then, once around 30 conversions have come in,
switch the strategy from Maximise conversions to target CPA.

4. Switch to target CPA
Target CPA sets bids automatically to win as many conversions as possible at the cost per conversion you have set.
So unlike Maximise conversions, it does not push the cost per click up: it gathers clicks within the budget at a reasonable price while staying inside the CPA.

It varies by industry and by service, but that is the basic sequence for bidding strategy.

5. In summary

Without the right bidding strategy you will not get results.
So work out your goal properly, and choose the bidding method that matches it.
Automated bidding in particular sets bids for you according to the goal,
which saves a great deal of work and frees that time for the job itself.

In recent years Google has moved further towards automating campaign management through machine learning. But the automation is not yet perfect, so it may be necessary to bring in manual bidding as the case requires, and to follow up by hand where machine learning cannot be left to it.

Use the strategy that fits your purpose, stay flexible, and aim for advertising that works harder.