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  • Writer's pictureKelly Alica Liman

Google Ads Bid Strategies Explained

Understanding and employing efficient bidding strategies is critical for improving ad performance and attaining the desired results for your Google Ads campaigns. They are critical in determining how much you pay for each click or conversion, as well as the overall performance of your campaigns. By leveraging the various bidding options available, you can optimize their campaigns to achieve specific goals, such as maximizing clicks, conversions, or return on ad spend (ROAS). This article will review the bid strategies available in Google Ads, how they work, and when to use them.


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How to create bid strategies


1. Navigate to Tools & Settings


2. Navigate to Bid Strategies under Shared Library


3. Click on the + symbol to add a bid strategy



4. Select a bid strategy




Target CPA


What it is: Target CPA helps you get the most conversions possible whilst reaching the target cost-per-action (CPA) that you set.


How to use it: Set a Target CPA of a maximum of 10% lower than your last month's performance. For example, if your historical CPA is $100, you should set your target CPA at $90. You should not go below this number, because the system will not be able to achieve this goal and you may experience anomalies with your ad delivery.


When to use it: Use it when you have a healthy number of conversions (the campaign is converting consistently) and you would like to improve the efficiency of your campaign.



Target ROAS


What it is: Return on Ad Spend refers to revenue, and the Target ROAS strategy is equivalent to Target CPA for eCommerce companies or companies measuring revenue. Target ROAS means that for every $1 that you spend on advertising, you want to get $x back.


How to use it: To enable this bidding strategy, you need to be able to track revenue. This means that you have to assign a value to your existing conversions or link your Google Ads to Google Analytics to pull the revenue data. Similar to Target CPA, you should set a Target ROAS of a maximum of 10%-20% higher than your last month's performance. For example, if your historical ROAS is 200%, you should set the Target ROAS at 220%. You should not go above this number, because the system will not be able to achieve this goal and you may experience issues with your ad delivery.


When to use it: Use it when you have a healthy eCommerce account or accounts that are measuring revenue and when you would like to improve the efficiency of your campaign.



Maximise Clicks


What it is: Maximize Clicks will help you get the most clicks possible by decreasing the cost per click as much as possible. This strategy will lower your cost per click to generate as many clicks as possible (optimize for cheapest clicks) but it will not optimise for conversions.


How to use it: You can use it as a standalone, or you can incorporate a maximum cost per click bid limit.


When to use it: Use this strategy only when your objective is clicks (traffic). You can also use this strategy if you're starting a completely new campaign / account that has no historical data at all to gather some data.



Maximise Conversions


What it is: Maximize Conversions will bid aggressively to generate conversions. The strategy will bid to get your conversions at any cost, without taking into account your target CPA. In most cases, using this strategy will cause your cost per click will increase and most likely your cost per conversion will also increase.


How to use it: You can use it as a standalone, but we highly suggest turning it into a hybrid strategy by setting a Target CPA in addition. This will allow the system to optimize for conversions but will cap the cost per acquisition according to the target that you set.


When to use it: Use Maximise Conversions only if you are struggling to generate conversions.



Maximise Conversion Value


What it is: Conversion Value refers to revenue. This strategy will bid aggressively and optimize for conversions and conversion goals that generate the most revenue. However, unlike the Target ROAS strategy, the algorithm will not take into account your ROAS. Thus, your ROAS may decrease as a result of applying this bid strategy.


How to use it: You can use it as a standalone strategy, but we don't recommend this strategy. We would highly suggest using the Target ROAS strategy instead.


When to use it: Use Maximise Conversions only if you are struggling to generate revenue or if you have multiple conversions with different values and you want to prioritize certain conversions, as the system will prioritize the conversion with the highest value.



Target Impression Share


What it is: Target Impression Share will help your campaign to get a x% impression share on the search page area you select. It is a visibility / awareness strategy.


How to use it: You can set the target % for anywhere on the results page, top of results page (anywhere from position 1 to 4 within the results page), or absolute top of results page (position 1 within the results page). You should set a target impression share of a maximum of 10% higher than your last month's performance.


When to use it: Apply it if your objective is to show up on the top Google results. Target Impression Share is mostly used for Brand or competitive campaigns.



Summary of Google Ads Bid Strategies


To recap, here are the bid strategies you should go for if you have the following goals:

  • If you have a healthy account and want conversions: Target CPA

  • If you are struggling to convert and want conversions at any cost, without considering the CPA: Maximize Conversions

  • If you want traffic: Maximize Clicks

  • If you want to generate revenue but also want to be efficient and get a return on ad spend: Target ROAS

  • If you want to maximize revenue at all costs: Maximize Conversion Value

  • If you want visibility and to ensure your campaign occupies the top Google results for a certain % of time: Target Impression Share



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