Google Ads Bidding Strategies: What Works Best? (2021)

google ads bidding strategies

You need to maximize your marketing dollars, so why not ensure your ads are seen by a large audience?

How about marketing on a site that boasts 259 million unique visitors each day and 4.8 billion daily interactions?

For an audience of this scale, of course we are talking about Google. 

While Google Ads can’t exactly guarantee you 259 million impressions of your ad per day, the high-traffic nature of the popular search engine makes it an ideal platform to spread the word about your brand or your latest campaign. 

However, without a strategy in place, listing your campaign on Google Ads can quickly become an expensive and time-consuming endeavor. Google Ads is an effective marketing tool, but only if you work efficiently. Here’s what you should know about Google Ad bidding strategies so you can get the maximum return on your investment with the least amount of effort.

Why Should You Advertise on Google?

Sure, Google receives nearly 5 billion search queries every day, but why is this platform a good option for your organization to reach your target audience? 

For starters, Google Ads offers an incredible return-on-investment (ROI). According to Google itself, advertisers make an average of $8 for every $1 they spend on Google Ads. It’s a resource that pairs paid advertisements with organic search results. Google Ads has been around for nearly two decades and is used by people around the world to get their questions answered.

Why else should you consider advertising on Google Ads? It’s likely your competitors already are—and they could be bidding on your branded terms to do so. Hundreds of thousands of companies rely on Google Ads as a major way to promote their businesses including your competitors, which means you should establish your presence on Google Ads as well.

If you’re already using a pay-per-click (PPC) format to advertise your products or services, Google Ads really needs to be part of your paid advertising strategy.

Google Ads and Bidding

Google Ads relies on a bidding system for organizations looking to place ads. In this system, advertisers select the maximum bid they are willing to pay for a click on their ad at the top of the search results page. In this format, the higher the bid, the better your placement—likely closer to the top of the search results page.

There are three options for bidding on Google Ads: Cost-per-click, cost-per-mile, and cost-per engagement. What does each of these terms mean?

  • Cost-per-Click (CPC): The amount you pay for each click on an individual ad
  • Cost-per-Action (CPA): The amount you pay when someone takes a predetermined action with your ad
  • Cost-per-Mile (CPM): The amount paid for one thousand ad impressions, when your ad is displayed to one thousand people (Display Ads)

Once you set up your advertisements in Google Ads, that’s the time to start bidding. Since your bid amount impacts your ranking in Google Ads, it’s wise to have a strategy in place when launching your paid campaign. This allows you to make the most of your investment and reach the most viewers in your targeted demographics.

Examining Google Ads Bidding Strategies

So what options do you have when it comes to bidding strategies? Let’s take a look. 

Automated vs. Manual Bidding

When it comes to bidding on keywords, you have two options: to bid manually or to automate the process

When it comes to automated bidding, you set a maximum budget, and Google adjusts your bid based on your competitors. Google works within a defined range to give you a better chance at winning a bid.

On the other hand, when you bid manually, you set the bid amounts for your ad groups and keywords, so you have the opportunity to lower your spending on lower-performing ads. 

Today, Google has seven different automatic bidding strategies within the search network alone, not even accounting for YouTube, App, or Display. These strategies are:

  • Enhanced cost-per-click (eCPC): This strategy automatically adjusts your bids of conversions are likely or unlikely.
  • Maximize conversions: Set bids to automatically get as many conversions as possible within your budget without worry about cost-per-conversion.
  • Target cost-per-acquisition (tCPA): Automatically set bids to gather conversions with no set limit on the volume of conversions.
  • Target return on advertising speed (tROAS): Generate as much eCommerce revenue as possible.
  • Target search page location: Aim for your ad to the at the top of the search results page, or to appear on the first results page.
  • Target outranking share: Automatically outbid your competition to appear above their ad.
  • Maximize clicks: Get the most clicks you can within your budget.

By choosing from these strategies, you can fine-tune your bidding strategies to help high-performing ads shine and manage costs for the other ads in your Google Ads marketing arsenal. And the best part? Because these strategies are automated, you don’t have to manage it all yourself!


Tips and Recommendations to Build Your Strategy

What should you know about optimizing your efforts on Google Ads? Here are a few strategies we’ve picked up along the way:

  • Forget about focusing on metrics that aren’t part of your goal. What are you looking to accomplish? If you are looking to make the most of your investment and drive conversions, you may be tempted to look at the total number of impressions and find that, to your dismay, this number isn’t as high as you would like. If you rely solely on this number, you may be missing out on more relevant data that can tell you how many people who view your ad are contributing to your conversion rates.
  • Work slowly. If you decide to utilize the cost-per-acquisition (CPA) automation model for your ad campaign, pay attention to your data. It’s likely not financially feasible to drop this cost by more than a few dollars at a time, at most. As you learn more about how your customers interact with your Google Ads, make incremental changes to lower your CPA rate.
  • Give Google time to learn. Automated bidding strategies require patience. Typically, Google needs about 5 to 7 days to learn how to best use your budget, and if you get frustrated and end your campaign, you’ll end your work before the work really begins, and you won’t see as big of a return on your investment.
  • Consider conversion delay. Not every conversion happens the same moment a user clicks your Google Ads advertisement. Even if your user doesn’t convert for 3 weeks, Google still registers the conversion from your original advertisement. This is especially important if your business model has a long conversion period. Without giving Google Ads the proper time for these conversions to roll in, you could be under-weighting the impact and efficacy of your campaign. 
  • Give your budget headroom. Limiting your campaign funding may result in limiting conversions too. If your total campaign budget is $5, but your set cost per acquisition is $10, you’re already missing out on conversions. This is an extreme example, but take into consideration the number of conversions you’re looking to acquire when you set each part of your campaign budget and give your budget a little “headroom” to grow.  
  • See your strategy through. No single strategy is right for every campaign. With so many strategies to choose from, it can be tempting to make lots of tweaks. But as the saying goes, you can’t switch horses mid-stream. Changing your setting will prolong Google’s learning period and keep Google from adjusting your bids to meet your goals. Let Google’s AI technology do the work.

At Demand Machine, our goal is to support B2B organizations in digital strategies, including marketing and sales automation. With Google Ads, you can set your ad campaigns to work for you so you can focus on your business’ core competencies instead. We’ll guide you through it, and countless other strategies to grow your reach. Ready to learn more? Contact us today!

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