What is the best way to choose the right bid strategy for your PPC? Well, that depends on your goals.
The popular PPC platforms, such as Google Ads, offer many bid strategy options, which can make it overwhelming to choose the right one.
There are many options to choose from when it comes to advertising strategies, such as target CPA and ROAS strategies, Cost per Click or Maximize Conversions strategies, and many more.
We will examine the most frequent types of bid strategy and when it would be most beneficial to use them.
Bid Strategy
There are two main ways to control how you compete in the ad auction, manual and automated bidding. Each works differently to display ads for relevant searches and both have their advantages and drawbacks, some of which we’ll look at below.
Manual Bidding
When you use manual bidding, you are in control of how much you are willing to spend on each click for your ad. You can set your maximum CPC at a amount that you are comfortable with and that is suitable for your budget. You can set a maximum amount for each click on your ads, giving you more control.
With manual bidding, the highest CPC you set will be used by Google to determine if your ad appears in search results. If you bid too low to compete, your ads will not be shown.
Manual CPC bidding requires a lot of time to ensure that keyword bids are optimized for relevant searches.
Automated Bidding
Automated bid strategies automatically place bids on ad auctions that have a higher chance of yielding the desired results, as specified by the user. Automated bidding is when Google alters your keyword bids using their machine learning and algorithms to get a desired outcome.
Although it may be intimidating to allow Google algorithms to have control, automated bid strategies save a lot of time that would be spent on account management. Additionally, the advanced artificial intelligence used by Google means that great results are achievable.
Campaign goals
Before deciding which strategy to use, it’s important to consider what you want to achieve from your campaigns:
- Conversions: If you want people to take a specific action on your site, like making a purchase or completing a form, your main campaign goal would be to drive conversions.
- Clicks: If you want to drive traffic to your site, your campaign goal would be to generate clicks through from your PPC ads.
- Impressions: If you want to increase brand awareness and are less focused on driving traffic, your campaign goal would be to maximize impressions and visibility of ads.
1. Enhanced Cost per Click
Campaign goal: Clicks and Conversions
This bid strategy automatically adjusts your bids to help get more conversions at the target cost-per-acquisition, or CPA, that you set. The enhanced cost per click, or ECPC, bid strategy automatically adjusts your bids to help get more conversions at the target cost-per-acquisition, or CPA, that you set. ECPC functions by increasing keyword prices for clicks that appear to be more prone to result in a transformation and reducing your prices for clicks that seem less likely to convert.
Setting a cap on your bids when using ECPC allows you to control how much you’re willing to spend.
2. Maximize Clicks
Campaign goal: Clicks
The goal of Maximize Clicks is to deliver as many clicks as possible while staying within your budget. Setting bids using machine learning and algorithms is done automatically. You can again set a maximum CPC limit to control how much you spend.
Enhanced Cost-Per-Click Strategy
eCPC strategies can help you get more out of your clicks while still giving you some control over your bids. This an optimization strategy that only allows you to bids on queries that are most likely to lead to conversions.
First, your PPC platform analyzes the thousands of ad auctions it participates in every day. The data collected shows that clicks are more valuable, so the max CPC threshold is raised in order to capture them.
How do PPC platforms know where to raise bids? The ad auction analyzes the behavior of visitors you have received from previous auctions and calculates the probability of a conversion occurring.
After reviewing all of the data, a decision is made about what action to take.
An eCPC strategy should be used when you don’t want to give up all control to a PPC tool. This approach is more hands-on than the CPA-style bidding strategy, but it still offers a lot of automation.
Your campaign will take max bids into account when trying to increase conversions.
You should consider implementing an eCPC strategy when you have clear conversion events, just as you would with a CPA strategy. This style performs better when your campaign is nuanced.
Prices may be higher or lower in different locations, or people using mobile phones may not convert well. There is no set formula for ECPC bidding, so it can be adapted to many different circumstances.
3. Maximize Conversions
Campaign goal: Conversions
The goal of Maximize Conversions is to get as many conversions as possible while staying within your budget. This is done by using algorithms to automatically set bids.
Google Ads uses information about past campaigns and the context surrounding them to evaluate what bid would be most optimal to get the most conversions each time your ad is eligible to appear.
4. Target CPA (cost per acquisition)
Campaign goal: Conversions
The Target CPA bid strategy is designed to get as many conversions as possible at a specified cost per acquisition.
If you have data on your past conversions, Google Ads will give you a target CPA to aim for based on your past performance. You have the option of using the Target CPA recommendation or setting your own.
Cost-Per-Acquisition Strategy
A cost-per-acquisition strategy lets you get the most conversions possible for a set price. If you set a $10.00 CPA, your PPC platform will reduce your bids when it reaches the cost ceiling.
The goal is to drive conversions at or below the set price. Most bidding optimization tools, like Marin or Kenshoo, have options for conversion optimization.
When you want your website’s visitors to complete specific goals, you should use a CPA strategy. Conversion points are areas of your website where you want your visitors to take a specific action, such as subscribing to your newsletter or making a purchase. adding conversion points to your website is simple, but it can take some time and effort to find the right places to put them.
You want your conversions (of leads to customers) to be direct and easy to achieve. Adding items to shopping carts or newsletter form submissions are good candidates for a CPA optimization strategy because they signify an intent to buy. The best goals for a website are binary actions that are either yes or no- either the visitor hit the button, or they did not.
5. Target ROAS (return on ad spend)
Campaign goal: Conversions
The Target ROAS bid strategy is designed to get as much conversion value as possible, while still meeting the return on ad spend target that you set. Google Ads will optimize bids to generate higher value conversions.
You need at least 20 conversions in the past 45 days to be eligible to use Target ROAS bidding, but it’s recommended to have at least 50 conversions in the past 30 days for optimal results.
PPC management platforms typically aim to achieve a set ROAS (return on advertising spend) for the money you spend on your campaigns. Your tool will average out the costs of individual conversions to meet the ROAS you set.
It is important to monitor your campaigns using ROAS strategies to make sure you are spending your money in the most efficient way possible.
Sales from marketing campaigns with low ROAS tend to drag down conversions from campaigns with high ROAS when they are packaged together. You should group together campaigns or ad groups that have similar ROAS goals.
If you want to spend five dollars for each conversion your website generates, imagine what that would be like. You estimate that you will receive $25 for each conversion you complete. If you generate five sales, then your ROAS formula will look like:
($125)/(25) = 500% ROAS
This bidding strategy is ideal for businesses whose products or services are worth different amounts.
An ROAS strategy would average the revenue generated across all products for a company that sells car parts, for example. If you want to generate a similar amount of ROAS for your products, group them together and let your PPC tool do the work.
Some conversions may have a higher or lower return on investment (ROI) than your target. Google Ads will work to meet your ROAS target.
6. Target Search Page Location
Campaign goal: Brand Awareness / Impressions
Google Ads automatically raises or lowers bids to make your ad the most visible on the first page of search results.
Although the main goal is not to generate traffic, you will probably get more clicks on your ads when they appear in the top positions. The cost of goods is likely to rise in the near future.
With this type of strategy, you can set your search bids and then forget about them. Your management platform will change bids throughout the day in order to stay within your budget limit.
If you use this strategy, it might be convenient, but it could also make your campaigns less profitable. The cost-per-click in search auctions can vary a lot depending on things like the type of device being used, the time of day, and the number of other auction participants.
When you are comfortable spending money for a target search page location strategy, it might not return direct revenue. You’ll need to closely monitor your campaigns if you don’t want to change your strategy to something simpler.
You can improve your search page location by spending money. The main issue is the lack of profit or sometimes no profit at all.
This strategy is useful if you want to be seen and recognized. You will save yourself a lot of trouble by holding these types of campaigns to a different standard than the rest of your account.
Metrics such as impression share and assisted conversions should be given more attention than direct conversions and ROI. The goal is to make your name known and to influence conversions in the future, so think about the long-term consequences of your actions.
7. Target Outranking Share
Campaign goal: Brand Awareness / Impressions
If it seems like your competitor’s ads are appearing in a higher position than your own, this strategy can help. Google ads will automatically adjust your bids to help your ad beat ads from competing domains.
Sometimes the goal is to outperform an opponent. An outranking share strategy is when you want your ad to be seen more often then your competitor in the same space and to get more clicks then them. If you want your ads to show up more often than a competitor’s in search results, you need to implement it.
This strategy focuses on outperforming a single, specific competitor. PPC platforms typically do not allow users to enter a large number of domains that they want to outbid in the auctions.
The percentage of auctions that you aim to win. You need to critically examine your motives for wanting to pursue this strategy and what your goals are for the target domain.
Do you have enough money to beat them in most of the auctions? If you can afford to, should you? Do the math to see how many sales you’re comfortable pursuing.
If you want to outrank a specific domain, it might cost a lot of money.
Some advertisers mistakenly think that their competitors have less money for advertising or that their ads don’t reach as many people. This can cause them to take on more than they can handle.
AdWords will automatically set your maximum bid limit if you don’t want to do the math yourself, but make sure you monitor your costs.
Outranking your competition can be very effective as part of a bigger strategy against them. Positioning is the name of the game here. The main benefit of this strategy is that it allows you to link your brand to that of your competitors.
You can only outrank one domain with each bid strategy.
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