What is the best PPC auction strategy?

how does target cost-per-acquisition (cpa) bidding determine the optimal cost-per-click (cpc) bid?

Depending on your business and your targets, you, like many businesses, plan to use paid online campaigns, such as SEA, in order to achieve your business objectives. These can be qualitative, such as improving your reputation or e-reputation, or quantitative, such as reaching new customers, increasing traffic to your site, increasing a shopping cart or buying frequency, etc.

In this article, we’re looking at Google Ads, which offers you a number of bidding strategies, tailored to different types of campaigns and marketing objectives.

We take stock of the different types of auctions available, so that you can choose the most appropriate solution, in line with your campaign objectives.

Define your campaign objective.

Your campaign and advertising objectives are the nerves of war. If you have not yet clearly identified them and defined KPIs to measure their impact, you are not yet ready to decide on an auction strategy.

So take a step back to determine the objective of your campaign, it may be:

  • generate traffic to your website
  • soliciting conversion of site visitors (an action that visitors might take on your website, e.g. a purchase)
  • improve your awareness with your target audience

This way, you can set up Google Ads to increase bids for ads that meet specific business objectives, such as increasing brand awareness, increasing site visits, or increasing sales.

Google ads dashboard
Google ads dashboard


Then you also need to set KPIs, the indicators that determine whether your goals have been achieved. Ideally, you should analyze your performance every month in order to make adjustments: ad format, keywords, targeting, budget, etc.

Factors to consider for your auction strategy

Here are some important criteria to consider and evaluate before starting your Google Ads campaigns:

Your budget

If you’re on a tight budget, we recommend starting with a small bet and looking at the results, then adjusting, analyzing, comparing and starting over. Step by step to find the right balance and guarantee you an optimal short-term return on investment.

Your campaign objectives

As mentioned above, setting your objectives is crucial to adopting the most appropriate bidding strategy for your goals:

  • Raising awareness: Focus on impressions, using cost-per-thousand impressions (vCPM) or cost-per-view (CPV) auctions to get your ad in front of customers.
  • Increase your visits/traffic: Focus on clicks with cost-per-click (CPC) bidding strategies, manual or automated.
  • Drive sales: Adopt conversion tracking in your campaign, using cost-per-acquisition (CPA) auctions, which will be the most appropriate for that purpose.

The conversion value

Depending on your activity, the value of a prospect or a sale will not be the same and, therefore, so will your bids. For example, if the cost per click is €15 and the price of the product you are selling is €450, it may be useful to set a higher bid.

Your target and its behavior

It is important to identify the most favorable times for your target to connect: what days, at what time, at what time of year…

Knowing your target and your behaviour on the web is therefore essential if we want to get a qualified audience.


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How to manage Google Ads auctions

There are 2 ways to manage bids in Google Ads: manual and automatic bids. What are the differences between these two strategies?

  • Manual bids give you the opportunity to control the bids yourself by defining them at the level of the ad group, individual keywords or ad locations. So you know that you are bidding for the clicks that are most important to you.
  • Automatic bidding is when you let Google Ads bid for you. You can set a daily budget and then ask Google Ads to automatically adjust your bids to get as many clicks or conversions as possible within your budget.

It’s usually best to start with a manual bid on Google Ads, until you get the right balance between choosing the right search terms, bid amount, and result performance (impressions, clicks, conversions).

Tools can help you build your strategy:

  • The auction simulator predicts simulation scenarios.
  • The Keyword Planner displays the volume of keyword searches, as well as cost estimates.
  • The estimate of the first page bid indicates the bid increase required for the keyword in order to place the ad on the first page of search results.

Once you have the right equation and a history, machine learning can take over and optimize the bidding automatically and intelligently.

Also check out our article Google Ads – 4 Effective Strategies for Targeting Your Audience to take advantage of our strategic tips on how to use Google Ads effectively.

The different bidding strategies on Google Ads

To make the right choice, start by determining what type of campaigns you want to publish. Depending on the strategic objectives and their purpose, it will be recommended to opt for an auction strategy oriented to “impressions”, “views”, “clicks” or “conversions”.

Strategies oriented “ impressions”

Target printing rate

The Target Print Rate strategy applies only to Search campaigns, which are designed to show your ad on the Google search results page. The objective is to ensure its visibility, depending on the positioning and frequency of broadcasting you want.

For example, if your target impression rate is 75% in absolute first position, Google Ads will automatically adjust your bid to CPC, so that your ad appears at the top of the results 80% of the times it is likely to appear.

Auctions at vCPM

The “vCPM bid” (cost per thousand impressions) strategy is used on the Display network and YouTube, for which you specify the maximum amount you are willing to pay for a thousand impressions of your ad.

The “vCPM bid” (cost per thousand impressions) strategy is used on the Display network and YouTube, for which you specify the maximum amount you are willing to pay for a thousand impressions of your ad.

Strategies oriented “ interactions” or “views”

  • Cost per commitment . The “Cost per Engagement” strategy refers to interactive ads on the Display network, such as Lightbox. The amount is defined for each interaction with the ad:
  • For expandable advertising spaces: mouse over, click on the ad or support to expand the ad, provided that it has had time to be loaded and viewed.
  • For already developed ads: any interaction after its display.

Auction at the CPV b

The “CPV Auction” strategy (cost per view) is dedicated to TrueView video ads (created with Google Ads), for distribution on YouTube or on the Display network. You’ll need to set the maximum amount you’re willing to pay for each viewing or other interaction with your video (your CPV max).

As with vCPM, you’ll only pay the minimum required for your ad to appear first, which usually allows you to spend less than the set limit.

Special cases:

  • TrueView InStream Ad: You only pay when the user watches at least 30 seconds of the video (or its entirety if shorter) or interacts with one of its interactive elements.
  • Video Discovery TrueView: You pay if the user clicks on the thumbnail or title of the video and starts watching it.

Google Ads provides you with reports and statistics on your video ads, so you can measure the attractiveness of your content and the performance of each campaign.

Clicks oriented strategies

Manual auction strategy at the CPC

The “Manual CPC Bidding” strategy applies to both Search and Display campaigns. You set the maximum CPC (Cost Per Click) or PPC (Pay-Per-Click) price you are willing to pay. Here, too, you will pay the minimum to win the bid.

The advantage of being able to run several ads in parallel, with different strategies of keywords or location, in order to establish the best performing one, like an A/B test. You can then rebalance the budgets according to the best parameters found.

Automated bidding strategy *Maximize clicks”

The “Maximize Clicks” strategy applies to the Search and Display campaigns, which are allocated a daily budget. Google Ads will make optimal use of it to automatically manage your bids so that you get as many clicks as possible based on your budget.

This solution is simple for beginners and convenient to save time in managing and updating your auctions. However, it is not recommended if your advertising objectives are to maintain an ad position or a specific cost per conversion.

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Conversion-oriented strategies

Auctions at the target CPA

The so-called “Target CPA” strategy is for Search and Display campaigns and aims to maximize your conversions while respecting the cost per acquisition (CPA) you have set. It is based on the history of recorded conversions and evaluates competitive signals in order to automatically bid at the optimal cost-per-click (CPC) whenever your ad is likely to run.

Google Ads will bid at an average CPA throughout the campaign, which means that some conversions may cost more than your target CPA.

Auctions at target ROAS

The “Target ROAS” strategy (Search and Display campaigns) is aimed at automatically bidding so that you get as much conversion value as possible according to the return on advertising spend target (ROAS) that you have set. So you’ll get conversions with a high return on investment, but that will generate fewer clicks and traffic to your website.

The target ROAS is the average conversion value, such as income, you want to earn for every euro you spend on your ads. This implies that you have assessed the financial return you want to get based on your investment.

In order to guarantee the effectiveness of this strategy, it is advisable to wait until you have received at least 50 conversions in the last 30 days, consistently.

Strategy “Maximize conversions”

The “Maximize Conversion” bidding strategy applies to Search campaigns only, automatically setting your CPC bids so that you get the most conversion value possible within the budget you set. It is based on the history of your campaign and the analysis of contextual signals during the auction.

This strategy is interesting if you don’t have a specific CPA, so you can see how your CPA behaves naturally.

Optimised CPC Auctions (eCPC)

The “Optimized CPC Bidding” strategy (Search and Display campaigns) aims to adjust your CPC bidding according to the potential of your bidding, with the goal of maximizing conversions.

The objective of the eCPC is to search for and win the most relevant advertising bids, increasing your maximum CPC. If a click has less potential, Google Ads will automatically lower the bid and vice versa. The eCPC tries to keep your average CPC below the maximum CPC you have set.

eCPC can also be used to optimize conversion value by prioritizing high-value conversions. This type of bidding is only available for campaigns on the Search network.

Google Ads manual and automated auctions are a great tool to carry out your advertising campaigns, as long as you have a clear understanding of your objectives, which will allow you to choose the bidding strategy that will be most effective in achieving a good return on investment.

Your agency Eminence is a Google Ads partner and will be happy to advise you in defining your strategy and accompany you in its planning.

Do not hesitate to contact our experts at Eminence.