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Bid Strategy Learning Google Ads – It takes the guesswork out of setting a CPC and uses a complex algorithm to determine how much to pay for each click.
Google claims that automation can do it for you. But as we have seen before, the reality is very different.
Bid Strategy Learning Google Ads
If you’re using Google Ads to make money, you can’t blindly accept one of the most important parts of your campaign, which is the price you pay per click.
Google Ads Bid Strategy
And while some of these bidding strategies really help sell more, others are like giving Google direct access to your bank account.
So in this article, I’ll take you through the basics of CPC bids and bidding strategies, show you the pros and cons of each and give you some practical tips for implementing them into your campaign.
A bid strategy in Google Ads is where you decide how much you want to pay for each click.
If you’re deciding whether to increase a keyword’s maximum CPC based on conversion data from last week, that’s your bid strategy.
Google Ads Bidding Strategies In 2022
If you’re starting a new campaign, you can set your maximum CPC to an arbitrary value of $0.5 to see what happens.
In other campaigns, you can look at the Search Impact Section to decide how to change your bids.
After all the examples are very simple, it is up to you as an advertiser to look at the data, interpret it and make a decision.
This is a manual bidding strategy. It gives you ultimate control over your maximum CPC at the ad group, product group or keyword level.
What’s New With Automated Bidding In Display & Video 360
It takes into account many data points besides conversion numbers: user information, device type, time of day, geography, operating system, day of the week, etc.
For me, the biggest benefit is the ability to look beyond conversions per actual click. Algorithms can look at certain click values, consider their parameters and work backwards to get more or less of these clicks.
It’s a bit of a black box, but as a human competing with an algorithm, it’s hard for me to consider all the variables for each click.
The biggest downside is that you’re giving up control to Google. Algorithms do all the work, but you don’t know how it works, you don’t know what auctions you’re participating in and how you bid.
Guide To Google Ads Bidding Types, Strategies And Bid Adjustments
You have to trust Google, but at the same time, my experience shows that some of these automated bidding strategies make advertisers pay more for clicks.
Google claims that 70% of all advertisers use automated bidding, a number that seems pretty high to me. If this is true, many advertisers are paying too much for their clicks, which may lead to lower returns.
Before I look at each relevant bidding strategy, I want to share my approach to bidding if you’re just starting out.
Below you can find an overview of all the bidding strategies available in each of the 4 main campaign types: Search, Shopping, Display and YouTube campaigns.
Understand How Budget And Goal Changes May Impact Smart Bidding
As the name suggests, this is a manual strategy, meaning you decide how to adjust your bids and then set those values at the ad group or keyword level.
Manual CPC is best used when you are just starting out and you have no or limited access to data.
If you still don’t know which CPC to use, you can use manual CPC to feel the impact of any bid changes.
Manually adjusting your bids takes a lot of your time, but it gives you more control over what you bid on and how your money is spent.
Types Of Google Ads Automated Bidding Strategies & When To Use
Because of this, many advertisers choose this bid strategy over the automatic strategy that Google’s algorithm is responsible for.
With Enhanced CPC, if Google thinks a click is likely to lead to a conversion, it will increase your bid to increase your chances of getting a click.
There used to be a limit on how much Google could increase or decrease your bid (30%), but that limit has been removed. Now Google can go as high as they can.
This bidding strategy allows you to control your bids and influence Google’s algorithm at the same time.
How Cross Channel Bidding Differs From Portfolio Bidding
So, if you have at least 20 conversions, this is a good combo early in the optimization process to explore some of the automation that Google offers.
So Target CPA is a smart bidding strategy that focuses on conversions that tells Google how much you’re willing to pay for a sale.
Google will set bids to get an average CPA that is (almost) the same as your goal across all campaigns you use this strategy for.
You can add a target CPA directly to a campaign by going to campaign settings, expanding the “Bidding” section and clicking “Change bid strategy”.
Pros & Cons Of Every Google Ads Bid Strategy [2023 Edition]
If you change the bidding strategy in an existing campaign, Google will generate a recommended value as in the screenshot above.
If you start a new campaign, you’ll come up with a CPA that Google wants to use as a target (see how to do that below).
If you want a little more control using this strategy, Google offers you some advanced options. To access this, go to Tools & Settings > Bid Strategy. Click the “+” icon and select Target CPA. Then click on “Advanced Options”.
These restrictions give you additional control, but they take away some of the freedom Google needs to dial in its algorithm.
A Look Inside Google Ads Smart Bidding & Automated Bidding Strategies
To use this bidding strategy, you need to have a solid understanding of your CPA in Google Ads. You get this information by running campaigns with Manual CPC or Enhanced CPC for some time.
With Targeted CPA you give Google more control because you rely on their algorithm to do the heavy lifting.
Most experienced store owners have a good idea of their break-even CPA. But when given the option to set a maximum CPA, many will set a CPA lower than that.
Let’s say your break-even CPA is $25. And reaching $20 in sales means a healthy profit. So you can set the target CPA to $20.
Google Ads Basics: How To Create An Effective Google Ads Strategy
But it’s not because you want to achieve a certain CPA that Google can (or wants) to deliver.
Let’s say before you started running your campaign using manual CPC and within a few months, you achieved $24 ROAS.
If you set your target CPA at $20, that’s too aggressive. And you stop traffic from your campaign. This could result in the target hitting the target, but only selling 10 units instead of 100 units per sale at that price.
So the only way to come up with realistic numbers is to have historical performance that is consistent with the numbers you want to hit. Over time, you can experiment with lowering the CPA.
Google Ads Smart Bidding Guide For Agencies
Please note that campaigns using automated bidding strategies need some time to adjust to each change (budget, bidding strategy, new products, etc.). You’ll see it displayed as “Eligible (Learning)” in the Campaign Status column.
Pro Tip: In order for Google to be effective in delivering your target CPA, you need to “unify” your campaigns. This means you group keywords or products in campaigns that generate similar results.
Combining branded search (with a lower CPA) with branded search (with a higher CPA) in the same campaign can produce something in the middle, making it difficult for Google to find more potential conversions at that price point.
Target ROAS is a smart bidding strategy for Google Ads where you bid on a target return for ad spend.
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ROAS is the average conversion value you receive for every dollar you spend on your ads. It is calculated as follows:
So spending $50 on an ad that generates $100 results in a ROAS of 200% ($100 / $50 x 100 = 200%).
With the ROAS Target bid strategy, Google looks beyond the raw number of conversions and focuses on the actual conversion value.
ROAS Targets are very similar to CPA Targets, except that ROAS Targets also take revenue into account.
Google Ads Bid Strategies
The minimum requirement for this strategy is 15 conversions in the last 30 days for search and display networks and 20 conversions in the last 45 days for Google Shopping campaigns.
However, Google recommends at least 50 conversions in the last 30 days to maximize the effectiveness of this bidding strategy.
As with target CPA, being too aggressive with your ROAS target can dry up your campaign and reduce your revenue. Remember that it is possible to reach your ROAS target, but you will lose traffic.
Pro Tip: To maximize Target ROAS potential, you should group your keywords or products with similar performance into one campaign.
The Top 3 Google Ads Bidding Strategies For 2023
Maximize Clicks, formerly “Automatic Bidding,” is an automated bidding strategy where Google gets as many clicks as possible for the budget you set.
Select the campaign you want to set up Maximize Clicks, go to Settings and change the bid strategy to Maximize Clicks.
In the bid strategy settings, you can optionally set a maximum CPC bid limit
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