Google Ads offers a range of different auction strategies, adapted to different types of campaigns and objectives. As part of the auction system, you should take into account five basic types of objectives, associated with your current campaign settings.
Continue reading this article to discover which is the best strategy for you. We will look at how to choose the right bidding strategy based on your advertising objectives.
First of all, define your campaign objective!
Your campaign and advertising objectives are essential. If you don’t have this information, you are not yet ready to decide on a bidding strategy. So take a step back to determine what the objective of your campaign will be. For example, it could be:
– To generate traffic to your website
– To increase conversions on site visitors (for example an action that visitors could perform on your website, e.g. add to cart, purchase, etc.)
– To improve your brand awareness amongst your target audience
Also, ou can configure Google Ads to increase bids for ads that meet specific business objectives, such as increasing brand awareness, website visits, or sales.
Manual and automatic auctions
There are 2 different ways to do the bid management in Google Ads: manual and automatic bidding.
Manual auctions give you the opportunity to control the bids yourself by defining bids at the level of the ad group, managing individual keywords or ad locations. This enables you to know that you’re bidding for the clicks that are most important to you.
Automatic bidding is when you let Google Ads do the bidding for you. First, you set a daily budget and then you ask Google Ads to automatically adjust your bids to get the most clicks or conversions possible within your set budget.
The different bidding strategies on Google Ads
To make the right bidding strategy choice, start by determining whether your type of campaign and its purpose require you to measure “click-through rates”, “impressions”, “conversions”, “clicks” or “views”.
- “Click” oriented bidding strategies
- Manual CPC bidding:
The “Manual CPC Auction” strategy is applicable to both Search and Display campaigns. You can set the maximum price and the maximum CPC (cost per click) that you are willing to pay for a click on your ad. Your “max. CPC” is the maximum amount you can be charged for one click.
You actually only pay the minimum required to get priority over the nearest competing ads. The actual CPC you support is therefore usually less than this maximum amount.
You can define different bids for each group of ads in your campaign, focusing on specific keywords and locations. This said, once you start seeing good performance on certain keywords or locations and want to allocate a larger share of your advertising budget to them, you need to manually adjust the required settings.
- The bidding strategy to optimize clicks:
The “Maximize Clicks” strategy, is intended for Search and Display campaigns. It is the simplest solution to defining bids for clicks. Once you set up a daily budget, Google Ads automatically manages your bids so that you get as many clicks as possible within your budget.
We recommend that you opt for this strategy to generate traffic. Especially if you don’t want to spend time monitoring and updating individual CPC bids, or don’t know exactly which bid to set for specific keywords or locations.
However, this type of strategy is not recommended if your advertising objectives are to maintain a specific ad position or cost per conversion. This is because it does not allow you to define individual CPC bids, instead you can define a maximum CPC bid for your entire campaign.
- Conversion-oriented strategies
- Targeteds CPA bidding:
In order to maximize your conversions while targeting your defined cost per conversion (CPA), you can use the “Target CPA” strategy (for Search and Display campaigns). This type of strategy is based on your campaign’s conversion history and evaluates contextual signals at the time of the competition to automatically establish the optimal cost-per-click (CPC) bid for your ad whenever it is likely to be displayed.
If the cost of certain conversions may be higher or lower than your target CPA, Google Ads defines your bidding by seeking to achieve an average CPA equivalent to your target, across the entire campaign.
- Target ROAS bidding:
Before selecting this strategy, you need to keep in mind the financial return you wish to have based on your investment.
When you choose the “target ROAS” strategy (Search and Display campaigns), Google Ads automatically sets your CPC bidding so that you get the highest possible conversion value based on your defined ROAS target. Your target ROAS is the average conversion value (e.g. revenue) you want to get for every euro spent on your ads.
Based on your site history, Google will analyze potential conversions and will define an auction that will meet your ROAS.
However, this strategy allows you to obtain conversions with a high ROI but generates less clicks and traffic on your website. In order to be fully effective and for the bids to be chosen as accurately as possible, it is highly recommended to have obtained at least 50 conversions, consistently in the last 30 days.
- Maximize conversions:
This strategy is applicable to Search-only campaigns. It automatically sets your CPC bidding so that you get the highest possible conversion value for the budget you set, instead of aiming for a given ROAS. It is based on your campaign history and also on the analysis of the context which signals at the time of the auction to automatically set the optimal bid for your ad whenever it is likely to be transmitted.
So if you don’t have a specific CPA, it’s worth choosing this strategy and seeing how your CPA will behave naturally.
- Enhanced CPC (ECPC)
The “CPC Optimized Bidding” strategy (Search and Display campaigns) allows you to adjust your manual CPC bidding according to the potential of the auction in question, in order to maximize the number of conversions. The role of the eCPC is to search for the most promising advertising bids and then try to win them by increasing your maximum CPC. When a click has less potential, Google Ads will lower your bid. The eCPC tries to keep your average CPC below the maximum CPC you set. However, it can exceed this amount over short periods of time.Alternatively, you can use eCPC to optimize conversion value by prioritizing high-value conversions. Note that the optimization of bidding to increase conversion value with eCPC is only available for campaigns on the Search network.
- Impression-oriented strategies
- Target Print Rate:
This type of strategy is only applicable to Search campaigns. It automatically defines your bids so that the display of your ads on the search results page conforms to your positioning and display frequency indications.
This means that if you choose a target print rate of 80% in absolute first position, Google Ads will automatically set your CPC bidding so that your ad is displayed at the very top of the page in 80% of the cases where it is likely to be displayed.
- vCPM bidding:
The “Auction to vCPM” (cost per thousand visible impressions) strategy is used for the Display network and also on YouTube. Here, you define the maximum amount you are willing to pay per thousand visible impressions of your ad (your vCPM max.).
As always with Google Ads, you are only charged the minimum amount necessary to give your ad priority over the nearest competitor’s. In addition, you only pay if your ad is visible.
An ad is “visible” when 50% of the content appears on the screen for at least one second for graphic ads and at least two seconds for video ads.
Also note that Google has decided to abandon the CPM auction strategy in favor of vCPM auctions, which are considered to generate better results.
- “Interaction” or “view” oriented strategies
- Cost per engagement:
The “Cost per Commitment” strategy applies specifically to interactive ads on the Display network, such as Lightbox. In fact, it defines the amount you will have to pay for each interaction with the ad.
For extensible advertising spaces, a commitment is recorded as soon as the user moves his mouse, clicks or presses to expand the ad, and the ad has time to load and be viewed. For already developed ads (such as interstitial ads), a commitment is recorded when the user interacts with the ad after it is displayed.
- Cost-per-view (CPV):
CPV Bidding (cost per view) applies specifically to TrueView video ads (created with Google Ads), which are intended for broadcast on YouTube or the Display Network. It allows you to set the maximum amount you will pay for each viewing or other interaction with your video (your maximum CPV).
In fact, your CPV max. is the maximum amount you can be charged per view. In fact, you only pay the minimum required to get priority over the closest competing ad, which means that the actual CPV you will pay is usually less than this maximum amount.
In the case of a TrueView InStream ad, you pay when the viewer watches at least 30 seconds of your video (or the entire video if it is shorter) or interacts with one of its interactive elements (for example, by clicking on an overlay action incentive, a form, or a banner associated with the video).
For a Video Discovery TrueView ad, you pay when a viewer clicks on the thumbnail or title of your video and triggers its viewing.
With the reports and statistics available on video ads, you will get a clear view of the level of interest your audience has in your content and the performance of your campaign.
Factors to consider for your bidding strategy
If you have a small budget, we recommend starting at the bottom of the funnel to maximize your return on investment in the short term.
As mentioned earlier in this article, setting your goals from the beginning is key to choosing the most suitable auction strategy to:
- Raise awareness: you need to focus on impressions. You can use cost per thousand visible impressions (vCPM) or cost per view (CPV) auctions to place your message in front of customers.
- Increase visits/traffic: focusing on clicks might be ideal for you. Cost per click (CPC) bidding, manual or automatic, may be appropriate for your campaign.
- Increase sales: It may be best to implement conversion tracking in your campaign and focus on conversions. Cost per Acquisition (CPA) bidding allows you to do just that.
- Conversion value
Depending on the quality of a prospect or the value of a sale, you can bid more or less. For example, if the cost per click is € 10 and the price of the product you are selling is € 500, it may be useful to consider a higher bid.
When starting to use Google Ads it is always better to use the manual CPC until you have gathered enough performance data.
– The auction simulator predicts possible scenarios.
– The Keyword Planner displays the volume of keyword searches and cost estimates.
– The First Page Bid Estimator shows the bid increase required for the keyword to place the ad on the first page of the search results.
Voilà! You are now able to set up your bidding strategy according to your advertising objectives!
If you need any help, please do not hesitate to contact our digital experts at Eminence here: https://eminence.ae/contact