The Good, The Bad, and the Useful — Google Ads Bid Strategies

Google Bid Strategies — What they are and how best to use them

Google is always tweaking its bid strategies in response to a constantly changing and evolving advertising landscape. As a result, it’s important to stop and take stock of where we’re at, what strategies you’re using, and if it’s time to consider a change. Digital marketing life moves pretty fast!

We wanted to give you a bullet point cheat sheet for the current state of play and here are all the Google Ads bid strategies contained below:

• Manual Bidding
• Manual Bidding (Enhanced CPC)
• Max Clicks
• Impression Share
• Max Conversion Value
• tROAS
• Max Conversions
• tCPA

Additionally, many of the strategies below refer to considering the Ideal CPC for the account and so, to be super helpful, we’re also going to pop down the bottom our Ideal CPC Formulas.

Manual Bidding

Objective

• You want ultimate control over bid levels and click costs.

When to use Manual Bidding

• New campaigns
• ‘Single Keyword Ad Group’ (SKAG) campaigns
• Brand campaigns (where your brand budget is not restricted)
• As a supplementary bid strategy when using the ‘Parallel’ campaign strategy

Pros

• Gives you direct control
• Easy to understand

Cons

• Time-consuming to manage
• Limited data signals (one click is as valuable as the next, vs smart strategies where clicks are graded as more or less valuable based on signals)

How to get the best performance from Manual Bidding

• For Brand or SKAG campaigns — watch Impression Share (IS) Loss (due to budget). It should be very low or zero.
• Set conversion attribution to Data Driven, Time Decay or Position Based.
• Make sure you enable all available audiences (including remarketing) in observation mode.
• Adjust bid modifiers wherever you have data (device, location, time of day, audiences, demographics)
• Adjust bids regularly based on performance or goals (you can use the ‘ideal CPC formula’ below to guide you in making bid decisions)

Manual Bidding (Enhanced CPC)

Objective

• You want to control bid levels but you’re happy for Google to “help”. Google Ads will increase or decrease a bid for a keyword in an individual auction based on the likelihood that click will lead to a sale. It’s effectively a manual bid strategy that recognizes that some clicks are more valuable than others.

When to use Manual Bidding (Enhanced CPC)

• New campaigns
• ‘Single Keyword Ad Group’ (SKAG) campaigns
• As a supplementary bid strategy when using the ‘Parallel’ campaign strategy

Pros

• Gives you more control than fully automated bidding
• Easier to understand cause and effect than smart bidding campaigns

Cons

• Time-consuming to manage
• Google has no caps on increase/decreases
• CPCs can blow out pretty quickly!

How to get the best performance from Manual Bidding (Enhanced CPC)

• Same as Manual Bidding (see above! ^)
• Watch the CPC’s recorded against search terms — you’re looking for any search terms that consistently hit high CPC’s. Those searches might be relevant, but because they are expensive they are certainly worth being aware of!

Max Clicks

Objective

• Think of this as manual bidding where you use Google to increase/decrease bids in real-time, to get as many clicks as possible, AND spend your daily budget.

When to use Max Clicks

• New campaigns
• ‘Single Keyword Ad Group’ (SKAG) campaigns
• Brand campaigns (where you have a limited brand budget)
• As a supplementary bid strategy when using the ‘Parallel’ campaign strategy

Pros

• Great for getting as much click volume as possible for a given budget
• Can limit bids via the ceiling

Cons

• CPC’s can blow out if the bid ceiling is too high
• The bid ceiling is not enforced — it acts similarly to manual (enhanced CPC) in that more valuable clicks might cost more than your bid ceiling. Checking your search term CPC’s will show you any outliers.

How to get the best performance from Max Clicks

• Watch Impression Share (IS) Loss (due to budget). It should be very low or zero.
• It’s ok to be limited by rank — this is the mechanism it uses to get you more clicks per dollar
• Conversion attribution set to Data Driven, Time Decay or Position Based.
• Make sure you enable all available audiences (including remarketing) in observation mode.
• Closely monitor the search term report to look for regular and unreasonably expensive terms.
• Use the “Ideal CPC” formula then check that the actual CPC is around this

Impression Share

Objective

• To waste money 🤷🏻‍♂️. Oh sorry, I meant, “When you want to maximize your reach”.

When to use Impression Share

• Brand campaigns
• SKAGs
• High priority reach campaigns

Pros

• ….. (thinking… thinking..)

Cons

• High CPCs if you chase high impression share targets

How to get the best performance from Impression Share

• Don’t start by targeting 100% impression share — ease up to your level but watch performance closely
• Conversion attribution set to Data Driven, Time Decay or Position Based.
• Make sure you enable all available audiences (including remarketing) in observation mode.
• Closely monitor the search term report to look for regular and unreasonably expensive terms.
• Use the “Ideal CPC” then check that the actual CPC is around this

Max Conversion Value

Objective

• To generate the highest revenue possible whilst spending ALL of your daily budget. Might be less conversion numbers at a higher conversion value.

When to use Max Conversion Value

• Conversion tracking is set
• The Campaign has 30–50 conversions in last 30 days
• Great as part of a parallel campaign strategy but be sure to start with low budget

Pros

• Easy to manage

Cons

• CPC is effectively linked to the Budget. Increasing your budget will increase CPC, so proceed with care!

How to get the best performance from Max Conversion Value

• Control bids with budget (eg ROAS too low? Reduce budget)
• It’s ok to be limited by budget and rank
• Conversion attribution set to Data Driven, Time Decay or Position Based.
• Make sure you enable all available audiences (including remarketing) in observation mode. This is quite important for any smart bidding strategies.
• Closely monitor the search term report to look for regular and unreasonably expensive terms.
• Monitor product/category performance using ideal CPC. Split into performance-based campaigns as needed

tROAS

Objective

• Generate as much conversion value as possible at your target ROAS. Might not spend daily budget

When to use tROAS

• Conversion value tracking is set
• The Campaign has 30–50 conversions in the last 30 days
• General campaigns

Pros

• Easy to manage

Cons

• Poor conversion numbers if ROAS target is set too high

How to get the best performance from tROAS

• Use upper bid limit (portfolio strategy) if ROAS hard to hit
• Conversion attribution set to Data Driven, Time Decay or Position Based.
• Make sure you enable all available audiences (including remarketing) in observation mode. This is quite important for any smart bidding strategies.
• Not budget limited
• Realistic target is set (start lower then ease up)
• Monitor product/category performance using ideal CPC. Split into performance-based campaigns as needed

Max Conversions

Objective

• When you want to get as many conversions as possible AND spend your daily budget

When to use Max Conversions

• Conversion tracking is set
• 30–50 conversions in last 30 days
• Great as part of a parallel campaign strategy (tCPA is a good parallel campaign to run) — start with low budget

Pros

• Easy to manage

Cons

• CPC is effectively linked to the Budget. Increase budget with care!

How to get the best performance from Max Conversions

• Control bids with budget (eg CPA too high? Then reduce budget)
• It’s ok to be limited by budget and rank
• Conversion attribution set to Data Driven, Time Decay or Position Based.
• Make sure you enable all available audiences (including remarketing) in observation mode.
• Closely monitor the search term report to look for regular and unreasonably expensive terms.

tCPA

Objective

• To get as many conversions as possible at your target CPA, fully aware it might not spend your daily budget.

When to use tCPA

• Conversion tracking is set
• Campaign has 30–50 conversions in last 30 days
• Most campaign types
• Works well as a parallel campaign to Max Conversions

Pros

• Easy to manage

Cons

• Poor conversion numbers if the target is set too low
• As already highlighted, you may not spend your daily budget.

How to get the best performance from tCPA

• Use upper bid limits (via a portfolio strategy) if CPA hard to hit
• Conversion attribution set to Data Driven, Time Decay or Position Based.
• Make sure you enable all available audiences (including remarketing) in observation mode.
• Not budget limited
• Realistic target is set (start higher then ease down)

Ideal CPC Formulas

For many bid strategies to work at their optimum, we need to understand our ideal CPC, also known as “How much should we pay for a click?”.

Firstly, in case of any confusion, I just want to highlight that this is an ideal CPC, not an ideal level to set your bids. Once you establish your ideal CPC, you’ll have to set your bids higher than that.

Additionally, it’s useful to check in periodically to adjust your bid thresholds to high your ideal CPC mark.

Finally, understanding your ideal CPC is especially important for Manual, Max Clicks or Impression Share bidding.

So, all that said, how do you calculate your Ideal CPC?

For CPA: Ideal CPC = Target CPA x Conv Rate

Example:

• I want to get conversions for $30, and I have a conversion rate of 5%.
• I know it takes 20 clicks to get a conversion (1/0.05)
• I should be paying $1.50 per click to hit my $30 CPA goal

My calculation would be: 30 x 0.05 = $1.50 Ideal CPC

For ROAS: Ideal CPC = Average CPC x (Actual ROAS/Target ROAS)

Example:

• I want to generate $7 for every $1 spent (ROAS = 7)
• I’m currently generating $5 for every $1 spent (ROAS = 5)
• I’m currently paying $0.60 per click
• I need to reduce my CPC to increase my ROAS

My calculation would be: 0.60 x (5/7) = $0.43 Ideal CPC

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