The Definitive 2021 Guide to Google Adwords Bidding Strategies

Google Adwords bidding strategies involve using an advanced advertising system that allows you to bid on particular keywords.

It’s an elaborate process – but if you know how to handle it, you can maximise your advertisement’s performance, all while lowering the costs associated with it.

Your AdWords bidding strategy of choice will depend on your specific campaign. Determining which option is best for your particular campaign is as simple as knowing what networks your campaign is targeting and whether you’d like to garner clicks, impressions, conversions, or views.

Although many things go into AdWords bid management, and this definitive adwords bidding strategies guide will take you through the whole process from start to end.

You won’t become an overnight marketing expert but you’ll learn the basics that will help you spice up your advertisements, improve their performance, and save money in the long run.

Determine Your Google Ads Campaign Goals

Different advertisement campaigns have different goals. Each campaign goal can benefit from the use of a different bidding strategy, hence the reason why Google has a multiple adwords bidding strategies that are optimised for different advertising goals.

If you want to bid, you’ll have to do some groundwork first. You’ll need to determine the four basic types of goals that go alongside your current campaign settings.

Below, we will define these four goals and give you a brief explanation of what they mean and give you some basic bid types for each selection so that you can pick one that best suits your campaign.

Goal 1: Increasing Conversions

adword bidding strategy goal

If you’re looking to drive conversion rates and traffic to your website or eCommerce store with the sole purpose of increasing ROI, the best bid types are:

  • Maximise Conversions
  • Target CPA
  • Target ROAS
  • Enhanced Cost Per Click

Goal 2: Increasing Website Traffic

Improving website traffic

If you’d like to improve the traffic on your website and drive it from your advertisements instead of just creating conversions, a couple of fantastic bid types for you to consider are:

  • Maximize Clicks
  • Manual CPC Bidding

Goal 3: Improving Brand Awareness

Increasing brand awareness isn't nearly as popular as the other goals, but it’s still a viable option. The top adwords bidding strategies for maximum branding are:

  • Target Impression Share
  • CPM and vCPM for YouTube and Display Networks

Goal 4: Boosting Views & Interactions

boosting views and interactions

Increasing views and interactions is one of the best ways to create buzz around your website or eCommerce store, and the best bidding type for this purpose is cost per view (CPW) bidding.

Ultimately, the best way to reach these goals is by utilising some of the smart bidding strategies that Google has already built into the platform.

Now, there are multiple smart bidding strategies but don’t worry, they will be covered in detail and presented in layman’s terms.

Smart Bidding Strategies - Increasing Conversions

google smart bidding strategies

Functional Google AdWords bidding strategies will allow you to reach your goal faster, with less money spent, and far more efficiently.

To help you better grasp how Google adwords bidding strategies can benefit from smart bidding types, we'll cover each of the four goals mentioned above in detail and explore all the elements that make them successful. We will also provide ample examples and detailed instructions on how you can use each tactic, so you don’t have to worry if you don’t understand something right off the bat.

After reading this section, you’re practically guaranteed to have a basic understanding of all four goals, how you can set up an automated bid strategy, and what you can expect from each goal and tactic.

Smart bidding is a complex set of automatic bidding strategies that use technologies such as machine learning to simplify, optimise, and improve conversions and the conversion value of every action, which is known as auction time bidding.

Aside from improving the conversions and conversion value of every auction, it factors in several other parameters, such as the device in question, the location of the viewer, the time of day, language, and the operating system – allowing this set to determine and capture the context of every query and collect valuable data.

Maximise conversions

Maximise conversions is a smart bidding technique that optimises your budget spending for conversions. It makes use of the entire budget instead of targeting a specific CPA.

smart bidding strategy maximise conversions

How does it work?

It makes use of the entire daily budget that you set by automatically optimising bidding to get the most conversions possible. It’s a budget-wise tool that allows you to get the best bang for your buck.

Before you pick this bidding method, check if you’ve set your daily budget properly. This method uses the entire daily budget, so set it to a comfortable level that you’re willing to spend.

Once the campaign is over, you can check your ROI to see if this method has provided satisfactory results. That is one of the more user-friendly methods, as you don’t have to set it up or put in any details, aside from your maximum daily budget.

Example:

If your daily budget is $100, Google will make sure to bid on more auctions that are projected to yield a higher return on investment in your Google Ads bid limit. If there’s a single auction worth $100, Google isn’t likely to bid on it.

Things to keep in mind:

Running this strategy without having conversion tracking is a bad option. Google tries to maximize the number of tracked conversions, so if there is no tracking enabled, the algorithm isn’t going to function properly and won’t yield the best results.

While it’s a fantastic strategy for increasing conversions, it’s less than ideal for profitability. Google will always automatically spend the daily budget regardless of the performance – the profitability at the end of the day could be either excellent or a disaster.

Increasing profitability safely is as easy as using the two different bidding strategies that I’ll discuss next – tCPA and tROAS.

Target cost per acquisition (tCPA)

Target CPA bidding is a special bidding strategy ideal for optimizing conversions. If this is your primary goal for your campaign, this bidding strategy will help you focus on converting as many users at a preset acquisition cost.

How does it work?

This method automatically sets your bids on each campaign in your assortment based on your CPA. Different conversions cost different amounts of money, but this advanced bidding strategy will help you get as many conversions as possible for the cost.

It’s a bit more complicated if you’re not aware of your total acquisition costs. Your CPA is the amount of money you’re prepared to invest in getting one customer.

tCPA example

Example:

If you’re selling a product for $100, you’ll have to set a lower CPA to make any money. Getting a positive return on investment is as easy as setting your target CPA to a lower amount than the product you’re selling. However, your tCPA cannot be too low from your historical CPA either.

Things to keep in mind:

It is very important to establish a reasonable tCPA. Your tCPA can be directly related to the number of conversions. For instance, if the target is too low, you might miss a certain number of clicks, which leads to a smaller number of conversions. A good idea is to check your historical average CPA and compare your tCPA with this metric. If the historical average is much higher than your current target, you should increase the tCPA and vice versa.

This bidding strategy also requires conversion tracking, but unlike the previous bidding strategy, it won’t operate at all without tracking enabled. Google requires you to have some conversion data for the machine learning that drives the program, ultimately increasing conversions. If the volume of data is lacking, the algorithm can’t make an educated guess, rendering it virtually useless.

A good amount of conversions for starting is anywhere from 30-50 conversions in the past month. It will give the tCPA enough data to know how to acquire customers for your unique campaign.

Target return on ad spend (tROAS)

tROAS is an ideal option if you’re looking to optimise for conversion value while targeting a specific return on advertisement spending.

How does it work?

With this bidding strategy, Google Ads automatically sets your bids to maximise the potential conversion value based on the ROAS. This value is presented in percentages rather than in a numerical value.

Example:

There’s a simple mathematical equation that shows how this technique works. Say you want to generate $100 for every $20 spent. You’ll have to divide the sales and ad spend and then multiply it by 100 to reach the target ROAS. The formula looks like this:

Sales / Ad Spend x 100% = tROAS

If I were to use the numbers provided above, the results would be:

100 / 20x 100 = 500%

tROAS example

Things to keep in mind:

Make sure that you have a good enough tracking history and conversion tracking enabled on your Google account. Never set your tROAS near as much as the product you’re selling. This technique requires some fine-tuning, so make sure to start with a lower goal and raise it based on the performance to reach the best possible ROAS.

Enhanced cost per click (ECPC)

While also considered a smart bidding strategy, enhanced cost per click strategy is slightly different because it partially automates your manual bids by adjusting your max CPC, and does not allow you to set a specific target.

On the other hand, other smart bidding strategies fully automate your bid strategy based on the CPA, ROAS, or budget target that you set, and do not require you to set manual bids.

Nonetheless, ECPC is a fantastic bidding strategy if you’re looking to adjust your manual bids to maximise possible conversions automatically. While not as elaborate or intricate as the other adwords bidding strategies on this list, it’s an optional and functional feature that you can use alongside manual CPC bidding.

How does it work?

Through the use of ECPC smart bidding, Google can either decrease or increase the bid based on the chances of driving the sale forwards. It attempts to average out the bids at your max CPC settings.

Through the use of ECPC, Google will decrease your bid if the chances of driving a sale are low and increase it if the algorithm estimates that driving a bid is likely. ECPC is restricted to the Search and Display networks.

Example:

ECPC is a fantastic way to automatic your manual CPC bids. If the bid is $200 and your budget is only $250, Google is likely to significantly decrease your bid as the chances of landing it are too low. However, if the bid is in the region of $20, Google will up your bid on it as it’s likely to seal the deal.

Things to keep in mind:

ECPC can adjust keyword bids, making it one of the most important keyword bidding strategies around. It can also adjust keyword bids that don’t have a cap, which increases the likelihood of making an unprofitable decision.

A good way to combat this is to monitor the CTR and CVR to determine if the bidding strategy is working as intended. If everything is going fine, both the CTR and the CVR should increase. Make sure to track the CPC and CPA to find out if the whole thing is making an acceptable ROI at the end of the day.

Smart Bidding Strategies - Improving Clicks with CPC Bidding

Getting clicks to your website is one of the main things you should focus on, as it will ultimately drive engagement, improve your ROI, and increase your prospects. There are two CPC strategies you can use to drive clicks to your website.

Maximise Clicks

Maximise clicks is the simplest and most basic automated bidding strategy. It’s by far the easiest and most efficient way to bid for clicks.

How does it work?

Maximise clicks is simple, quick, and easy to handle strategy. You’ll need to set an average daily budget, and that’s virtually it. The Google Ads system will automatically handle the rest, which is placing bids to bring you the best possible CPC for your preset budget.

Example:

The only thing you need to do is set a budget for your CPC campaign and let Google do the rest. If your budget is $100, Google will do its best to get you the most clicks possible for that exact price.

Things to keep in mind:

You’ll always need to set a maximum possible CPC and observe your average maximum CPC as well. Google will do its best to spend the whole budget to get as many clicks as possible, even if some of those clicks are wildly expensive. Start slow and build up from there, and observe if this tactic is getting you the most clicks at a desirable budget. At times, a smaller budget can perform similarly to a higher one.

Make sure to monitor your performance regularly with this bid strategy. You can see how much clicks this strategy is generating, and based on that data – you can decide if it’s meeting your goals at the desired budget. If it’s not working well, you can always adjust your settings to decrease your budget or opt for new adwords bidding strategies.

Manual CPC bidding

Manual CPC bidding is a strategy that allows you to manage all your bids yourself. While popular amongst seasoned marketers, it’s a bit labour-intensive and can be confusing for new faces in the world of Google Ads.

How does it work?

Depending on your ad group in your specific campaign, you can set your bid for each according to your budget. You can also place bids on keywords and placements. If you’ve done your research and decided that you can predict which keywords and placements will yield the most profit for your unique campaign, you can bid on them manually. It’s an effective way to spend your budget and yield a high ROI if you know what you’re doing.

Example:

If you see a keyword, ad group in a specific campaign, or placement that you would like for your advertisement, you can place a bid manually.

Things to keep in mind:

This process is very labor-intensive and can take much time and practice. It could also take much time from your day, which could be spent elsewhere – looking at the performance, judging if a bid is worthwhile, and having enough knowledge to predict whether it’s going to yield a high enough ROI.

Automatic bidding is superior to manual bidding in more ways than one. A computer algorithm can gather more data and process it faster than a human can, allowing it to work faster, better, and yield a higher return.

manual CPC bidding

Smart Bidding Strategies - Enhancing Brand Awareness & Visibility

Visibility and brand awareness are significant factors in advertising, but they aren’t nearly as common a focus or goal as increasing clicks and maximising ROI. There are adequate bidding strategies for this purpose, such as TIS, CPM, and vCPM.

Target Impression Share

Target impression share is a smart bidding strategy focused on raising as much brand awareness as possible by reaching as many people as the budget allows.

How does it work?

It’s an automatic bidding strategy, so it will automatically set bids for getting your advertisement on the top of the page, which is one of the best placements for this purpose. It will place bids based on your budget to get your ad as much visibility as possible.

Example:

If you want to absolutely dominate the competition in impressions for a specific keyword or key phrase queries, such as washing machines, you want to ensure that your advertisements can show up on the SERPs at any time. You can do that by setting your target impression share at 100%. It won’t be cheap, but it will ensure the maximum possible exposure for your brand.

Things to keep in mind:

This method most certainly isn’t cheap – things can get really expensive if you’re always targeting 100% for your target impression share. Of course, hitting 100% is almost an impossible task, and you shouldn’t set your goals that high. If you are working in a competitive market, you can be happy with anything between 60% and 80%. If the market is not that competitive, your target should be anywhere between 80% and 95%.

A good way to curb these costs is by ranking your advertisement campaigns based on their importance and setting the budget for each target impression share accordingly. Some keywords and keyphrases are going to be more expensive than others, so you’ll have to plan your budget if you want to make any profit while raising brand awareness.

It’s a good method if you’re looking to target affordable keywords to meet your brand awareness goals.

CPM

CPM is completely based on your impressions. It’s a smart bidding method that operates solely on the Display Network and YouTube campaigns such as TrueView. This method is not applicable for use in the Search Network.

How does it work?

This bid strategy allows you to pay based on the impressions that you receive on any visual content. It allows you to pay for each time that your advertisements are shown on youtube or google display network.

Example:

If your advertisement shows up on YouTube or Google Display Network, you’ll have to pay for it. Each max CPM AdWords impression requires a unique payment.

Things to keep in mind:

This strategy is great for raising brand awareness, as Google will automatically maximise the number of viewable impressions that your specific advertisement receives. You should always use this method to appeal to as broad an audience as possible, as Google will augment your chances of getting a high-frequency count on each user.

There’s a distinct difference between all viewable impressions, so monitor your placements to ensure that your content isn’t popping up where it shouldn’t.

vCPM

vCPM is another very popular bidding strategy, a variation of the traditional CPM bidding strategy. This strategy is a display only bid strategy that’s purposefully made to allow advertisers to bid for impressions when your advertisements pop up in a viewable space, such as Google Display Networks.

How does it work?

Unlike CPM, this method is completely reserved for the Display network. It automatically sets your maximum costs on 1000 viable impressions. An advertisement is counted as viewable when at least half of your advertisements show up on the screen. The timeframe for this is one second or longer for traditional still display ads and two seconds and longer for video advertisements.

Example:

If at least 50% of your video advertisement shows up on someone’s Google Display Network for over two seconds, it will automatically count as viewable material, making it eligible for your viewable impression count. Based on one thousand viewable impressions, Google will automatically set the maximum costs, allowing you to make your bid.

Things to keep in mind:

This strategy is a bit more elaborate than the traditional CPM, but the two are remarkably similar. It will aim to maximise the number of viable impressions your advertisement receives, making it ideal for spreading brand awareness.

A common issue with this strategy is that your advertisements could potentially follow a small niche audience. Make sure to monitor the performance of your vCPM strategy and fine-tune it if need be, as placement matters when you’re trying to appeal to a broad audience.

Smart Bidding Strategies - Boosting Views or Interactions for Video Ads

Boosting the views or interactions on your video advertisements is a surefire way to accumulate impressions, prospects and increase your chances of landing a sale. It’s a pretty niche goal and has only one bidding strategy that’s best suited for its needs, which is cost-per-view bidding.

Cost Per View Bidding (CPV)

It’s a smart bidding strategy made for video advertisements on the Google Ads platform – but it can be used on the TrueView video platform.

How does it work?

A PPC bid strategy requires you to pay for each view and interaction your video advertisement gets. Interactions on the Trueview platform are defined as either CTA clicks, Overlay clicks, Cards, or companion banners.

A view is defined as the length of time someone spends watching your video advertisement. CPV bidding counts your view when someone watches at least 30 seconds of your video advertisement or whenever they decide to actually engage with the ad itself. It’s the default bidding type for TrueView advertising.

Example:

You have to enter the highest bid that you’re willing to pay for a specific view or interaction with your video advertisement. The maximum amount you’re willing to pay for each interaction or view is known as the mCPV or the maximum cost-per-view.

If you set your mCPV to $0.50, you’ll have to pay anywhere up to 50 cents when anyone watches your advertisement or interacts with your CTA.

Things to keep in mind:

Like other bidding strategies on this list, this one can get pretty expensive if you’re not careful. The best way to go about it is to start with a relatively small mCPV and build up from there if the numbers are right.

The Code of Conduct When Choosing Adwords Bidding Strategies

Choosing a single strategy from the myriad of adwords bidding strategies for your unique goal is not simple, as many goals have different bidding strategies associated with them. The best thing you can do is find one that seems right for your specific campaign goals, educate yourself on it, and go with it.

Always start small with any tactic, as most of them can get quite expensive if you’re not careful. While the Google algorithm is quite elaborate, it does have a few shortcomings, as defined in sections covering the different strategies.

A good thing to do is to start by selecting the correct strategy based on your specific campaign goals. The default setting might not always be the best unless it’s the case with boosting views and interactions.

Don’t be afraid to switch it up if your game plan is not performing to your standards. Testing different strategies out will allow you to make the right choice based on the information you’ve gathered from the testing phase.

Lastly, perhaps the most important thing about these adwords bidding strategies is to monitor as much as you can. You’ll need to monitor specific performance indicators such as the conversions, the conversion rate, the cost per conversion, and many, many more. Google’s algorithm can make mistakes, and they could cost you a lot of money.

If you monitor what it’s doing frequently enough – even if it makes a mistake, it won’t be nearly as costly as it could have been.

Top Tips for Driving Sales With Easy Google Adwords Bidding Strategies

1. Set bidding automation rules to make your life easy

If you’d like to be notified when your CPC goes through the roof, you can set up automation rules to notify you when that happens or when CPAs are low enough for you to pump up your bids.

2. Adjust bids by their demographic success

Every campaign you put in motion will always target more than one demographic, but the content you are advertising isn’t going to appeal to everyone. You can’t make everyone love your product, no matter how helpful or revolutionary.

Particular demographics based on age, gender, or preferences are far more likely to love your product, and you can appeal to them directly through the magic of automation. It’s easy enough to adjust your bids to operate based on demographic success.

In Conclusion

Finding the perfect adwords bidding strategy is fairly complicated. If you’re not a seasoned marketer, you’re unlikely to make the ideal choice on your first attempt, and making the wrong choice could break your campaign in no time.

It’s important to assess your goals over and over until you’re completely sure what they are. Only then can you match adwords bidding strategies to their respective campaign goals, and use the correct play for your specific campaign.

If you want to streamline it, you should consider soliciting PPC bid management services.

Heroes of Digital are marketing experts who’ve been there for hundreds of businesses that are struggling with the same issues as yours.

We use the latest PPC bid management software in tandem with our digital marketing experts to provide the best results possible. We’ve helped over 600 clients with their Google Ads needs.

If you want to join their ranks, contact us today and find out what the best PPC bid management company in Singapore can do for you!

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    Xavier Tan
    Co-Founder
    Xavier is the Co-Founder of Heroes of Digital. He started social media marketing and SEM long before it became popular in Singapore. His passion is in helping businesses grow through effective lead generation. He has overseen campaigns for Amara Hotel, NTU, Marina Bay, L'Oreal, and 100+ SMEs.

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