Even experienced PPC advertisers can struggle with bidding strategies in Google Ads.
There are more than half a dozen options, each with different goals and use cases. You can easily lose track of when to use what.
Each bidding strategy gives Google’s systems a different mandate for spend, target metrics, and profit. Media buyers are constantly bouncing from one bidding strategy to another, and it’s not unusual for a campaign to switch from one strategy to another based on where it is in the lifecycle.
Save this guide as your go-to resource for understanding which bidding strategies to use, when and how to use them, and why they’re important.
1. Manual CPC
Manual cost-per-click (CPC) bidding isn’t really a place I think most campaigns want to stay, but it has two clear uses.
First are brand campaigns, where the focus is less on performance and more on making sure searches for your brand end up on your website, not your competitors. With brand campaigns, you want to capture a certain amount of impressions.
How many searches are there for my brand each month? Did I show up at least 80-90% of the time? Am I capturing and leveraging these queries?
In my experience, you’ll do better with phrase match and exact match when using manual bidding, while limiting broad match to just a few highly relevant terms.
Broad match is much more liberal and when you combine it with Smart Bidding, Google knows which of the 100 people searching for the same keyword are most likely to convert. They can adjust these bids in real time.
The other use case for manual CPC is low-volume keywords, typically in lead generation campaigns. When you’re running a search campaign and trying to stay profitable, but don’t have a big budget or a big enough data signal, manual bidding often works well.
If your budget is $50 per day and you start bidding at $7 per click and see that you’re spending $50 per day, you can bid less per click. If this works, keep lowering your bid until you see that Google is no longer spending the entire budget. That’s when you know you need to back off in the other direction.
In cases where you use manual bidding, it’s important to look at performance by device or time of day to see if you need to implement specific bid adjustments. I usually do this until I have enough conversion volume and then try to switch to Maximize Conversions or Target CPA.
Even with a limited budget, my barometer is enough conversion data to decide to switch to Smart Bidding. If I’m doing manual bidding for several months or years over the life of a campaign, it’s because there really aren’t better options.
2. Maximize clicks
I use Maximize Clicks Immediately when I want a campaign to simply spend its budget: Shopping, Search, and Dynamic Search. When I want to collect conversion data and speed up the learning process, I set it to Maximize Clicks for a few weeks.
The difference between Manual CPC and Maximize Clicks is that the latter doesn’t give Google any limitations on how much to bid. You can set a bid limit, but the idea behind this bid strategy is simply to exhaust a daily budget and get as many clicks as possible.
I recommend using it sparingly, only when your goal is to drive traffic to collect data.
That said, you may find it useful for upper-funnel campaigns focused on prospecting, such as demand generation, or even certain search campaigns where you want to generate new traffic from specific audiences.
Remember to take these results with a grain of salt, because this bidding strategy has no barrier to click quality.
Dig Deeper: Bids and bid adjustments in paid search campaigns
3. Target impression share
Target impression share only has one use case, in my opinion: brand search. I’m sure there are other scenarios where it makes sense for different people.
Brand search is all about maintaining visibility – you don’t want that traffic to end up on a competitor’s site. If traffic converts, it converts; Smart Bidding will not really influence the intent level.
When you show up 90% of the time and get 90% of the clicks, there’s no reason to use a CPA or ROAS goal. Both will push aggressively and make you pay more for a click you can buy for much less.
Again, make sure you only use Phrase and Exact Match, or the system will go overboard.
Don’t use this strategy if the game is to get more impression share than your competitor. Bidding for your own brand means you’re highly relevant, so you get cheaper CPCs than your competitors.
Now flip that equation: You don’t have a lot of brand relevance to your competitor, so you’ll need to bid much more aggressively. In this situation, I would use a CPA or ROAS goal to ensure that this tactic remains profitable.
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4. Smart Bidding (and why I prioritize it)
My goal with most campaigns is to move towards some form of Smart Bidding. Google has a lot of user data that influences its ability to push your account in the right direction, but you’ll never see that if you stick to manual bidding.
Many advertisers and media buyers are skeptical of Smart Bidding, and they have every right to be. But I don’t think that campaigns that rely too heavily on manual controls will continue to underperform in the years to come.
Maximize Conversions (Target CPA) and Maximize Conversion Value (Target ROAS)
The difference between Google’s two main Smart Bidding strategies is simple:
Conversion Maximization focuses on the number of transactions or actions that convert Conversion Value Maximization focuses on whatever value you provide (usually revenue)
What often happens is that lead generation service providers lean towards Maximize Conversions, while eCommerce brands opt for Maximize Conversion Value. But if you generate leads and can import your offline conversion values (pipeline and sales data), you can use Maximize Conversion Value to great effect.
The ultimate goal of Google Ads is to bid based on value, so you can see your cost versus revenue and optimize your profit margin.
With both bid strategies, you can include a target objective: CPA to maximize conversions and ROAS to maximize conversion value.
Without these goals, you’re telling Google to spend your entire budget, whether it’s $100 a day or $100,000. And the system will do its best to do that while giving you as many conversions or conversion value as possible.
Give it a target CPA or a target ROAS, and you’re no longer telling the system that the first goal is to spend the budget, but to reach your goal while spending as much of the budget as possible within those limits.
For most campaigns looking for profitability, Maximize Conversions with Target CPA or Maximize Conversion Value with Target ROAS are usually where you want to go, unless you have specific reach, frequency, or metric goals.
Find the sweet spot for a ROAS or CPA goal
There is a science to finding the optimal ROAS or CPA target for Smart Bidding to work with.
I like to start any bidding strategy without any goals. This pushes him to spend and collect data, which allows me to set a benchmark for what this goal falls into. If the CPA is $100 and I want it to be lower, I’ll set it to $95 and see how much I can still spend.
If I still use my full daily budget, I continue to slowly take it back as I see if I can still get a similar amount of traffic and conversions at a lower cost. Keep adjusting these metrics until you get to a place that makes sense to you while following these best practices:
Reduce the target by no more than 10-20% at a time and give the system a few weeks to acclimate. Accounts with more conversion data may come out with bigger and more frequent changes. Watch out for the cliff. You might end up making 90% of your original volume while only spending 60-70% of your original spend (and still using up almost your entire daily budget). You might see a massive drop and have to return it. Lower your bids whenever a campaign reaches its daily budget each day. You can do this with Smart Bidding by lowering your target CPA or increasing your target ROAS, which changes the final bid that goes into the auction. If your campaign is set to $100 per day and spends $105 each day, you can probably lower your bids.
Value-based offers
With Maximize Conversion Value, Google gives you the opportunity to feed it with business data that illustrates which leads are most valuable to you.
While it’s often used by e-commerce businesses that quantify the dollar value of things, it can also be used to generate leads.
The easiest way to do this is for lead gen is:
Understand your brand’s complete sales funnel: how leads turn into leads, how leads turn into qualified leads, how leads turn into opportunities, and how opportunities turn into sales. Work with your team or customers to determine the value of a sale, then work backwards through the funnel, noting typical conversion rates from one stage to the next. If you do it right, you can determine the value of a conversion in Google Ads based on how much revenue a deal generates. Use offline conversions to manually or automatically feed this information and values back to Google Ads, so the system finds more types of leads that lead to closed deals, signed contracts and money in the bank.
In addition, conversion value rules allow you to add positive and negative weight to placements, devices, and audiences, effectively serving as another layer of bid adjustments for Smart Bidding.
Dig Deeper: Value-based bidding: Why it’s key to boosting your Google ads
Match your bid strategy to your campaign goals
I am pro-Smart Bidding and pro-automation in general. However, I understand that thousands of Google Ads marketers still prefer the old-school method of controlling everything themselves.
Ultimately, it’s important that we all do what’s best for our customers and brands. That’s why I think the most essential part of choosing a bidding strategy is aligning it with what you want to achieve.
Peak Performance, for example, only allows you to use Smart Bidding and is poorly suited for accounts with limited conversion data. If you are not willing to adapt, stick to manual CPC and its limits.
Criticisms of automation and AI are fair when placed in the right context, but for those using these new technologies with the right support and setup, better performance is a matter of “when” rather than ” Yes”.
The views expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.
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