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7 min read

Google Ads Bid Strategies Explained

This article was updated on: 07.02.2022

The ever growing list of bid strategies Google provides can be daunting at first. Everybody wants to tailor their campaigns with the perfect bid strategy, but which one is the right one for your campaign? We will take a look at the pros and cons of each strategy and discover how they could suit your objectives.

Manual CPC

As Google moves towards being more and more automated it’s easy to assume manual bidding is not going to be an effective strategy, however going old school still has it merits.

Manual bidding gives you the greatest control of all the bid strategies, selecting this method ensures you can set the maximum CPC you are willing to pay for every keyword within your campaign. Being able to do this means you can specifically set bids to be more aggressive or conservative, based on the likelihood of the keywords resulting in a goal.

This is perfectly reasonable for small accounts and can generate great results if you have the time/manpower to manage the bids on a regular basis. However the Google auction is a very fluid place, so if you don’t give the campaigns lots of attention your bids could easily start to become ineffective and effect your ad rank.

Maximize Conversions

Maximize conversions is one of the simplest strategies that a PPC account manager can utilise. This strategy allows Google to automatically adjust bids, in an attempt to drive as many conversions as possible, within the daily budget that has been set for that campaign. This can be a very useful tool for campaigns which are looking to generate are large volume leads/sales.

However this strategy doesn’t take into account the quality or value of the lead/sale, especially as Google will continue to spend the daily budget regardless. If factors such as return on ad spend or cost per acquisition are more important to a business, than the actual amount of conversions then it would be wise to consider another strategy which focuses on these priorities.

Maximize Clicks

Maximise Clicks can be a great option for account managers who are focusing on driving more traffic to a website for either awareness or to simply build out a remarketing list. It is a handy tool for accounts which have a high conversion rate and are simply looking to capitalise on that by generating as much traffic as possible.

Google will optimise a campaign to ensure that cheaper clicks are prioritized over more expensive clicks, within your daily budget. However Google will always aim to spend your daily budget within this strategy so it could still result in expensive clicks being generated. It is also possible to combat this by setting a max CPC that you are willing to pay per click.

The main drawback for maximise clicks is that Google will not look at the probability of clicks generating leads or sales, which could be an issue for accounts which don’t have the highest conversion rates and where the quality and intent of a click is much more important than sheer volume.

Target CPA (Cost Per Acquisition)

Target CPA is a bid strategy which aims to drive as many conversions as possible with a pre-determined CPA target. For instance, if you set a target CPA of £20 Google will look to push as many conversions within that £20 target. This means that although some conversions may be costing significantly more than the target Google will aim to drive enough cheaper conversions to hit the target.

There are a few hurdles which need clearing however before this strategy should be implemented. The first potential issue is that in order for this strategy to work Google will need a good amount of historical data to optimise it’s bids. It is recommended that the portfolio you apply the strategy to has a minimum of 15 conversions over the past 30 days. However you will be more likely to see better results if the portfolio has a greater amount of previous conversions. If the portfolio you are planning to use this strategy on is struggling to reach the numbers required, a good tip would be to include more campaigns in the portfolio to increase the amount of data.

In addition to this it’s also important to recognise the need to set a realistic target CPA. For example, if you had previously been achieving a CPA of £100, slashing it to £10 will not work. It would be recommended that you initially set the CPA in the same ballpark as what you currently get, and then make subsequent small reductions to improve the performance.

Target ROAS (Return On Ad Spend)

The Target ROAS strategy sets out to achieve a return on ad spend identified by the account manager. This is calculated by the following formula;

Revenue / Cost = ROAS

In practice this means that if an advertiser generates £1,000 revenue at a cost of £100 then their ROAS would be 10. By using this strategy Google will endeavour to generate as many sales as it can whilst trying to hit the target ROAS. This means that Google will automatically look to push products with a greater expected revenue in some instances or opt to drive greater volume with less revenue in an effort to hit the target set.

It is important to not set unrealistic targets for the strategy as it will be unlikely to work, a good tip would be to set the target somewhere close to what the campaign is currently achieving and then make small incremental changes.

As with other automated bid strategies you will need enough data passing through Google ads in order to ensure the bid strategy will work correctly. In addition to this it will be necessary to have the correct tracking setup so revenue generated can be recorded.

Target Impression Share

If your main priority is to ensure that your campaigns ads appear in a certain section of the SERPs, then this would be an ideal bid strategy for an account manager to use. This strategy lets Google tailor bids in an attempt to either appear at the top of the results page or anywhere on the first results page. Essentially this means the budget will be spent in a manner which maximises the impressions in a certain area of the results page.

If you are concerned about a particular competitor who is consistently bidding on the same terms as your brand, then this strategy could also help combat them by aiming to appear on the top of the results page when possible. When setting up this strategy you are able to set an impression share percentage target you wish to hit alongside a maximum bid limit. However as with other automatic bidding strategies setting realistic targets is essential.

The main fallback for target impression share is that it only optimises for impression share. This means that your campaigns will not be judged on conversions, clicks or the revenue generated from them.

With so many choices available, the success of a campaign can be heavily influenced by bid strategies, especially when they can all be equally effective or ineffective is used incorrectly. The most important thing to realise before implementing any of these, is to know your business objectives. Once you have clear objectives nailed down you can start to build campaigns and strategies around it.

At Impression we always aim to create campaigns that help deliver great results for our clients based on their objectives. To find out what we could do for your business today, why not get in touch and contact us today.