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An Introduction to Bidding Strategies

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Written by

Niki Grant

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5 MIN

An Introduction to Bidding Strategies

Feature image of a person on a laptop to do Google Ads

Bid Strategies are a great alternative to manual bidding, allowing the search engine to make decisions on your keyword bids based on your goal, and the auction conditions. 

By providing the engine with your goal (in the form of a metric: clicks, conversions, ROAS) and relevant parameters (which keywords the bid strategy applies to, the maximum amount you want the strategy to bid on your behalf), your chosen bid strategy can make split-second decisions on which auctions to enter, and how much to bid. 

For example, if you’ve chosen a clicks-based bid strategy, the system is likely to bid more against keywords in auctions that have historically been more likely to result in a website visit as opposed to just an impression. You may find the bid strategy chooses not to enter certain auctions for the opposite reason; the query historically has rarely resulted in a click, and so it may not be an efficient use of your budget to bid against that particular keyword.

The key is to ensure you’re choosing the most appropriate bid strategy for your aims; a bid strategy can only optimize towards one metric so make sure it’s the metric you care the most about!

eCPC

Enhanced CPC is a feature that can be used alongside manual bidding to tweak bids within your given Max CPC limit. Whilst not really considered to be a full-blown bid strategy, eCPC provides a ‘light touch’ intervention with the aim of maximizing the number of conversions you receive within your budget. 

Visibility-based bid strategies

These strategies are designed to get your advert ‘in front of eyeballs’ with little focus on whether the owner of those eyeballs then clicks on the ad. This can be a great option for ‘awareness’ aims such as product launches or brand campaigns. 

Target Impression Share is the only visibility-based strategy for search, automatically setting your bids to achieve prominent positioning on the first page of search results. 

For video or display campaigns, the following options are available:

  • CPM: Bidding based on the number of times your ad is shown (Stands for Cost per Mille, or ‘cost per thousand impressions’)
  • tCPM: Focuses on achieving broader reach within your target CPM bid.
  • vCPM: Aims to achieve the highest number of viewable impressions within your CPM bid. 
an image explaining CPM, tCPM and vCPM

Bid strategies for traffic

Alongside manual CPC bidding – the default option for search campaigns – the Maximise Clicks bid strategy is the automated option for advertisers focussed on achieving higher levels of website traffic. By using this bid strategy, you’re instructing the engine to get you as many clicks as possible within your budget.

Smart Bidding

Smart Bidding is Google’s suite of conversion-based bid strategies. Smart Bidding uses ‘auction-time bidding’, a machine learning function that enables the engine to optimize your bids for optimal conversion performance. Smart Bidding takes broader contextual signals into account when choosing a bid, including the device, operating system, language, location, and time of day; as you can imagine it would be impossible for a human to consider all of these elements in-the-moment. 

The use of Smart Bidding is crucial alongside Broad Match keywords to temper the wide-ranging nature of the search queries. The ‘auction-time bidding’ capability allows the engine to identify the searches with the most potential, and those that are less likely to be relevant or fruitful, saving you money on irrelevant queries.

There are several Smart Bidding strategies to choose from depending on the nature of your business and your goals:

  • Target CPA: Provide a target cost-per-acquisition (the amount you’re willing to pay to achieve a conversion) and this bid strategy will aim to increase conversions within this cost.
  • Target ROAS: This strategy aims to achieve the highest return-on-ad-spend (similar to ROI). In order to use this bid strategy you’ll need to assign a value to your conversions.
  • Maximise Conversions: This strategy will use your budget instead of a target CPA to achieve as many conversions as possible within your spend threshold.
  • Maximise Conversion Value: Similar to Target ROAS but with the aim of achieving the highest conversion value within your budget. 
An image explaining Target CPA, Target ROAS, Maximise conversions and Maxmise conversion value

If you’re still using manual bidding for your campaigns, you won’t be benefiting from all of the machine learning capabilities that are embedded within the engine. Whether you’re looking to make your budgets work harder or just want to save time, bid strategies are sure to help.

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