Google Bidding Strategies (2023) Explained.

In the digital auction, your chosen bidding strategy determines when your ads are displayed, and your success is measured in clicks, conversions, or downloads. Choosing the right Google Ads bidding strategy is an important part of your campaign’s success, and it can feel like a complex decision. In this article, we will share our expertise on how Google bidding works, the current bidding strategies, and how to make the most of them.

How does Google Ads Bidding Work?

Google Ads is the world’s largest pay-per-click advertising platform, operating on a bidding system. When a user conducts a Google search, advertisers compete to have their ads displayed. The premise is: bid more money and maintain a high ad quality score to secure a better ad placement, whether in Search or across all Google Networks.

Behind the scenes, an automated algorithm considers several factors, including quality score, ad and landing page relevance, target audience relevance, and competition. Based on these factors, Google Ads determines which ads to display and how much to charge for each click.

However, there’s flexibility within this system. Advertisers can adjust their bids to align with their marketing objectives. For instance, you can increase bids on specific keywords or placements to appear more frequently in search results and display ad networks. Conversely, you can lower bids on less competitive terms and placements to save costs.

Depending on the campaign type, advertisers can also tweak their bidding strategies based on their ad performance. For example, to maximize clicks, you can choose between manual CPC or automated bidding strategies like Target CPA or Maximize Conversions, helping to find the most cost-effective way to achieve your advertising goals.

What are the Current Google Ads Bidding Strategies?

Manual vs. automated bidding

There are two primary types of bidding strategies in Google Ads: manual and automated.

Manual Bidding: With manual bidding, advertisers set the maximum amount they’re willing to pay for each click on a keyword or placement. This strategy offers more budget control and the ability to adjust bids on specific keywords. However, it can be time-consuming and prone to human error.

Automated Bidding: Automated bidding relinquishes manual control and allows Google Ads to automatically adjust bids in real-time for optimal results. Various strategies fall under this category, including Target CPA, Target ROAS, Maximize Clicks, and Maximize Conversions. Automated bidding is less time-intensive and often more accurate, but it might not provide the same level of campaign oversight.

How Does Smart Bidding Work?

Smart Bidding is an automated bidding system tailored for Google Ads. It considers factors like the user’s search query, device type, and location to adjust bids in real-time, optimizing for cost-effective achievement of marketing goals.

A Breakdown of the Google Ads Bidding Strategies (as of 2023):

Target CPA (Cost per Acquisition): This strategy aims to hit a specific cost per action, such as a click or signup. It’s effective for achieving lead generation goals (where there is a maximum cost per lead associated).

Target ROAS (Return on Ad Spend): Optimize campaigns to achieve a target return on ad spend. Ideal for eCommerce businesses looking to maximize revenue.

Maximize Conversions: Designed to get as many conversions as possible within a budget limit, making it suitable for conversion-focused campaigns.

Maximize Conversion Value: This strategy targets high-value conversions within a budget, emphasizing quality over quantity.

Maximize Clicks: Focuses on getting as many ad clicks as possible within the budget, ideal for driving traffic and collecting data.

Maximize CPM (Cost per 1,000 Impressions): For building brand awareness, charging an average price for 1,000 impressions.

Maximize Viewable CPM (Cost per 1,000 Impressions): Similar to CPM bidding but charges only for viewable impressions, making it cost-effective for awareness campaigns.

Manual Cost per Click (CPC): Offers granular control by allowing you to bid at the keyword or ad group level. Requires more manual effort but offers precision.

Enhanced Cost per Click (ECPC): An automated version of manual CPC bidding, this strategy adjusts bids based on the likelihood of conversion.

Maximize CPV (Cost per View): Designed for YouTube video campaigns, it charges for views but not for skipped videos, suitable for broad audience reach.

Target Impression Share: Sets bids to reach impression goals, useful for brand keywords and top-of-page placements.

What Are the Best Practices for Google Ads Bidding?

Here, we share some of our best practices to help you optimize your campaigns and make the most of your chosen bidding strategy:

Conversion Tracking: Ensure your conversion tracking is active and accurate. Without it, you cannot optimize for conversion-based bidding.

Set Realistic Goals: Don’t expect instant miracles with PPC advertising. Start with achievable goals and refine your strategy over time based on gathered data.

Attribution Model: Align your attribution model with your goals and avoid using it as a parallel vertical to your work.

Know Your Audience: Invest time in understanding your target audience’s needs, enabling you to tailor campaigns effectively.

Simplify Account Structure: Keep your account structure straightforward, making it easier to measure and adjust campaigns based on results.

Optimize Ad Placements: Improve ad and landing page relevance, narrow demographics, and test different ad formats to enhance placement quality.

Different Bidding Strategies: Customize bidding strategies for each campaign, aligning them with specific goals. Awareness campaigns require different strategies than product-focused campaigns.

Continuous Monitoring: Regularly monitor performance and adjust bids based on results. If a keyword or ad underperforms, consider lowering investment or revising the campaign.

Google Ads bidding strategies are a crucial element of your digital marketing efforts. By understanding how they work, selecting the right strategy for your goals, and implementing best practices, you can optimize your campaigns and achieve better results.

If you’d like us to review your Google Ad account or would like to talk to us about helping to manage your campaigns, feel free to get in touch with one of the team at Phoenix Media today.

About the author

As the managing partner for Phoenix Media, Rob brings over 10 years’ experience in digital marketing and running successful agencies in the UK, Australia and Thailand. Starting in a sales role he has covered all aspects of the agency from sales and service to technical ad operations. Reach him directly on rob@phoenixmedia.co.th