The Ultimate Guide to Google Ads Bidding Strategy in 2024

Using the best Google Ads bidding strategy is crucial for a successful ad campaign performance. Google Ads, a cornerstone of online advertising, enables businesses to reach potential customers precisely when they are searching for relevant products or services. However, the effectiveness of your Google Ads campaign hinges not just on the quality of your ads, but also on your bid strategy. 

Understanding and leveraging the right bidding techniques can make the difference between a highly successful campaign and a costly misstep. But this can be complex and daunting. That is why ClickGUARD is here! This article delves into the intricacies of Google Ads bidding strategies, providing you with the essential information every marketer should know to maximize their return on investment.

How Does Google Ads Bidding Work?

At the heart of Google Ads lies a competitive auction system where advertisers bid for ad placements. When a user searches for a relevant keyword, Google’s algorithm evaluates various factors, including the advertiser’s bid, ad quality, and landing page relevance, to determine the ad’s ranking. In the ad auction, the highest bidder secures the prime spot, pushing others down the page or out of sight entirely.

Here’s a step-by-step overview of how this process works:

1. Keyword Selection: Advertisers select keywords relevant to their products or services. These keywords trigger the display of ads when users enter related search queries.
2. Bid Setting: Advertisers set a maximum bid — the highest amount they are willing to pay for a click on their ad. This can be done manually or through automated bidding strategies.
3. Quality Score: Google assigns a Quality Score to each ad based on some factors (we will explain them all in the next section). A higher Quality Score can lead to better ad placements at lower costs.
4. Ad Rank Calculation: Google calculates an Ad Rank for each ad in the auction by multiplying the bid amount by the Quality Score. The result will determine the ad’s position on the search results page.
5. Auction Outcome: Ads with the highest Ad Rank appear in the top positions. The actual cost-per-click (CPC) is often less than the maximum bid and is determined by the bid of the next highest competitor divided by the Quality Score, plus a minimal increment.
6. Ad Display and Payment: When a user clicks on an ad, the advertiser is charged based on the CPC determined by the auction. The ad continues to be displayed as long as the advertiser’s budget allows.

Key Factors Influencing Google Ads Bidding

Now, let’s have a closer look at all the elements Google Ads considers when choosing who wins each auction. These factors can be broadly categorized into two main areas:

1. Bid Strength

Max Bid or Max Click-per-Cost: This is the core element – the maximum amount you’re willing to pay for a click on your ad. It directly influences your ad’s ranking potential. Higher bids generally increase the likelihood of your ad appearing in a higher position.

2. Ad Quality and Relevance

Google prioritizes user experience, and the quality and relevance of your ad significantly impact its ranking. Here’s a breakdown of the key factors:

Quality Score: This metric indicates the overall quality of your ad and its associated landing page. It’s determined by factors like:

• Click-through Rate (CTR): A higher CTR, meaning users find your ad relevant and click on it, positively impacts the Quality Score.
• Ad Relevance: Google assesses how well your ad text and keywords align with the user’s search intent.
• Landing Page Relevance: The landing page experience should be consistent with the ad message and provide a satisfying experience for users who click through. A well-optimized landing page contributes to a higher Quality Score.

Expected Conversion Rate (ECR): Google estimates the likelihood of a user converting (taking a desired action) after clicking your ad. A strong historical conversion rate for similar ads can boost your ad’s ranking potential.

Ad Extensions: Using relevant ad extensions — sitelink extensions, call extensions, and location extensions — can enhance your ad’s information density and user experience, potentially improving your ad rank.

While these are the primary factors, Google’s algorithm considers other aspects as well:

Search Context: Google considers the user’s location, device (mobile, desktop, etc.), time of day, search history, and other factors to determine the most relevant ad for the specific search query. 

Ad Format Preferences: Different ad formats may be given preference depending on the user’s search context and intent. For example, a product listing ad may be more relevant for a user searching for a specific product, while a text ad might be more appropriate for informational queries.

Auction-Time Bidding: Certain automated Google Ads bidding types leverage real-time auction insights to dynamically adjust bids based on the context of each search, potentially improving your ad’s position for relevant searches.

Manual Bidding vs. Smart Bidding vs. Automated Bidding

Understanding the various bidding types available in Google Ads is essential for optimizing your ad spending and maximizing your campaign’s reach and effectiveness. Here, we’ll delve into the three main bidding approaches – Manual, Smart, and Automated Bidding – providing insights into how they work, their limitations, and their advantages.

Manual Bidding: Taking the Wheel

Manual bidding gives advertisers complete control over their bids. You set and adjust bids at the keyword or ad group level, deciding the maximum amount you’re willing to pay for each click. This approach allows for granular control, enabling you to fine-tune bids based on the performance of individual keywords or ad groups.

1. Advantages:

• You have complete control over how much you bid for each keyword or ad group.
• You can quickly adjust bids in response to changing market conditions or campaign performance.
• It allows for tailored Google Ads bidding strategies to specific keywords or ad groups.

2. Disadvantages: 

• Requires significant time and effort to manage and adjust bids continuously.
• Effective manual bidding needs a deep understanding of your campaign metrics.
• Extensive keyword research and a deep understanding of your audience and industry are crucial for success. 
• Human oversight can lead to suboptimal bidding decisions.

Automated Bidding: Setting Your Campaign on Autopilot

Automated bidding uses algorithms to adjust your bids automatically based on the likelihood of your ad achieving a click or conversion. Google’s machine learning considers various factors, such as device type, location, and time of day, to optimize your bids and meet specific goals like maximizing clicks or conversions, freeing you from manual bid adjustments.

1. Advantages: 

• Reduces the need for constant bid adjustments, allowing you to focus on other aspects of your campaign.
• Algorithms can process and react to data much faster than manual adjustments.
• Efficiently allocates budget towards high-performing keywords and audiences, potentially leading to increased conversions or clicks within your budget constraints.

2. Disadvantages:

• You have less direct control over individual bids, which might not align with your specific strategies.
• Automated bidding relies heavily on historical data; insufficient data can lead to less effective optimization.
• Expect a learning phase as the algorithm optimizes, potentially impacting performance in the short term.

Smart Bidding: The Power of AI for Conversions

Smart bidding is a subset of automated bidding specifically designed to optimize for conversions or conversion value. It uses Google’s AI to analyze real-time auction data (device, location, time of day) and adjust bids accordingly, maximizing your chance of securing conversions within your budget.

1. Advantages:

• Optimizes for conversions or conversion value, making it ideal for performance-driven campaigns.
• Adjusts bids in real-time during the auction, considering various signals like user device, location, and time of day.
• Uses AI to make more precise bid adjustments, potentially leading to higher ROI.

2. Disadvantages: 

• This strategy thrives on a rich dataset of conversions. Limited data may hinder its ability to optimize effectively.
• Similar to automated bidding, you relinquish some control over individual bids.
• While the AI learns and improves performance over time, there may be an initial adjustment period.

The Best Google Ads Bidding Strategies 

Picking the best bid strategy for your Google Ads campaigns can be tricky. There are many options available, each with its own strengths and weaknesses. This guide will explain the most common bidding strategies, helping you decide which one best suits your goals. 

1. Target Cost-per-Action (CPA)

Target Cost-per-Action (CPA) is a bidding strategy designed to optimize conversions by allowing you to set the amount you’re willing to pay for a single conversion. Google Ads’ algorithm then adjusts your bids to achieve as many conversions as possible within your budget. This strategy is perfect if you have a clear return on investment (ROI) target in mind and want to acquire customers at a predictable cost.

Pros:

• Prioritizes cost-efficiency by acquiring customers at your target CPA, offering flexibility at both campaign and portfolio levels. 
• Leverages real-time signals for optimized bidding.
• Focuses on achieving a specific cost-per-conversion, making it ideal for campaigns where the goal is to increase leads or sales.

Cons:

• Requires a conversion history for Google Ads to gather data and make informed bids.
• May limit ad exposure in competitive markets to maintain your target CPA.
• Requires a substantial budget to perform effectively, ideally at least twice your target CPA.

Tips:

• Set a realistic target CPA based on your historical data and industry benchmarks.
• Monitor campaign performance to ensure your target CPA aligns with your budget.

2. Target Return on Ad Spend (ROAS)

Target Return on Ad Spend (ROAS) is similar to Target CPA but focuses on the revenue generated from conversions relative to ad spend. This strategy uses your historical data to predict and maximize the return on your advertising spend based on the value you assign to each conversion. It’s a powerful option for campaigns where conversions have varying values.

Pros:

• Optimizes campaigns for profitability by focusing on conversions with the highest value.
• Ideal for e-commerce stores with diverse product categories and different profit margins.
• Allows for setting bid limits to control budget.

Cons:

• Requires historical conversion data with accurate conversion values assigned.
• Needs a minimum number of conversions (typically from 15 to 50 in the last 30 days) for effective performance.

Tips:

• Set accurate values for your conversions to help Google optimize for the highest possible ROAS.
• Consider using this strategy alongside conversion tracking funnels to understand user journeys.
• Use this strategy if your goal is to maximize the value of conversions rather than the number of conversions.

3. Maximize Conversions

Maximize Conversions is a fully automated Google Ads bid strategy that uses your daily budget to obtain the maximum number of conversions possible. It’s a good choice if you want to spend your entire budget and maximize lead generation or sales.

Pros:

• Simple to set up and easy to manage.
• Efficiently uses your budget to drive a high volume of conversions.

Cons:

• May not be ideal for campaigns with specific ROI goals.
• Lacks control over individual bid amounts, which can lead to increased spending, especially if your budget isn’t well-defined.
• Requires some historical conversion data for optimal performance.

Tips:

• Monitor campaign performance closely to ensure it aligns with your goals and doesn’t overspend your budget.
• Consider setting conversion value tracking to understand the quality of conversions.

4. Maximize Value Conversion

This Google Ads bid strategy focuses on maximizing the total value of your conversions within your set budget. It’s ideal for campaigns with different conversion values, and when you want to prioritize high-value conversions (e.g., selling premium products).

Pros:

• Optimizes campaigns for maximum ROAS by focusing on high-value conversions.
• Adapts to market changes to potentially increase conversion value.

Cons:

• Reliant on accurate conversion tracking with values assigned.
• It may lead to higher costs per conversion in competitive markets.

Tips:

• Ensure accurate conversion tracking with proper value attribution.
• Consider using this strategy alongside audience targeting to reach high-value customers.

5. Enhanced Cost-per-Click (ECPC)

Enhanced Cost-per-Click (ECPC) is a semi-automated Google Ads bidding strategy that adjusts your manual bids to increase the chances of conversions while maintaining some level of manual control.

Pros:

• Combines the benefits of automated bidding with the control of manual bidding.
• Requires less historical data, making it suitable for campaigns with smaller budgets or less conversion history.

Cons:

• It can lead to higher CPC rates as Google adjusts bids based on conversion likelihood.

Tips:

• Use ECPC if you want to balance manual control and automation.
• Monitor performance and adjust manual bids to optimize for either the number of conversions or the value of conversions.

6. Manual CPC Bidding

The Manual Cost-per-Click bidding strategy gives you full control over your bids at the keyword or ad group level. It’s a fairly safe approach for branded, non-branded, and remarketing campaigns. 

Pros:

• Highest level of control over bids, allowing for precise budget management.
• Ideal for new advertisers or campaigns where specific control over costs is crucial.

Cons:

• It is time-consuming and requires regular monitoring and adjustments.
• Does not leverage automated adjustments based on real-time signals.

Tips:

• Use manual CPC for campaigns where detailed bid management is necessary.
• Frequently review and adjust bids to optimize performance.

7. Cost-per-Thousand Impressions (CPM)

Cost-per-Thousand Impressions is a bidding strategy where you pay for every 1,000 times your ad is shown. It’s a powerful tool to boost brand awareness and reach a broad audience. Unlike strategies focused on clicks, CPM ensures your ad reaches a significant number of people, maximizing its visibility. This is particularly beneficial for new brands or product launches.

Pros:

• Effective for brand awareness campaigns and increasing visibility.
• Predictable pricing based on impression goals.

Cons:

• Doesn’t guarantee clicks or conversions, focusing purely on impressions.

Tips:

• CPM works best for display networks and video platforms like YouTube, where high visibility is crucial for brand building.
• Monitor the impact on brand awareness and adjust your strategy accordingly.

8. Cost-per-Thousand Viewable Impressions (vCPM)

The Cost-per-Thousand Viewable Impressions is a Google Ads bidding strategy that focuses on ensuring your ads are truly seen by users. Unlike Cost-per-Thousand Impressions, you only pay when your ad is displayed on a part of the screen that’s in a user’s viewable area and has a chance of being noticed. This makes vCPM ideal for campaigns where maximizing the visibility of your message is key, especially for brand awareness.

Pros:

• Ensures you pay only for ads that have a chance to be seen.
• Ideal for campaigns aiming at brand awareness with viewable impressions.

Cons: 

• Like CPM, it does not prioritize clicks or conversions.

Tips:

• vCPM is well-suited for display networks and video platforms, where maximizing viewable impressions is crucial for brand-building campaigns.
• Monitor metrics like viewable impression rate (VIR) to assess the effectiveness of your vCPM campaigns. A high VIR indicates that a significant portion of your ad impressions were actually seen by users.
• Based on your viewability data, you can refine your vCPM bidding strategy. This might involve adjusting your ad placements, targeting specific demographics, or testing different ad formats for better visibility.

9. Cost-per-Viewing Bidding (CPV)

CPV, or Cost-Per-View, is a Google Ads bidding strategy specifically designed for video advertising. You only pay when viewers watch your ad for a predetermined duration (usually 30 seconds) or interact with it in some way (clicking on call-to-action overlays, cards, or companion banners). This makes CPV a cost-effective option because you’re focusing on engaged viewers who are actively watching your video content.

Pros: 

• Only pays for engaged views, making it cost-effective for video campaigns.
• CPV allows you to track valuable metrics like view completion rate, average watch time, and click-through rate (CTR) to understand how viewers are interacting with your video ad. This data provides insights into the effectiveness of your creative content and targeting strategy.

Cons:

• Focuses on views, not necessarily conversions, making it more suitable for awareness campaigns.

Tips:

• Use CPV for YouTube ads to drive engagement and brand awareness.
• Maintain control over your advertising spend by setting a maximum CPV bid. This determines the highest amount you’re willing to pay for a view.
• Track your CPV campaign metrics and use the data to refine your strategy. Consider A/B testing different video creatives, optimizing your targeting parameters, or adjusting your CPV bids to maximize engagement within your budget.

10. Target Impression Share

The last item in our Google Ads Bidding Strategies list is the Target Impression Share Bidding, which empowers you to gain precise control over how often your ads appear in search results. All you have to do is set a desired percentage of impressions you want your ad to capture for specific keywords or ad groups (e.g., aiming for your ad to show 80% of the time someone searches for a particular term).

Pros:

• Good for brand campaigns aiming to maximize visibility in search results.
• Allows for setting maximum CPC limits to control spending.
• You can customize your target impression share for different ad groups or keywords, allowing you to prioritize visibility for high-value search terms while maintaining a presence for broader terms.

Cons:

• Be mindful that maintaining a high impression share can be expensive, especially in competitive markets. It might not be the most cost-effective strategy for campaigns focused solely on conversions.

Tips:

• Use this strategy when the primary goal is to dominate visibility in search results.
• Monitor costs and adjust max CPC limits to balance visibility and budget.

Choosing the Best Google Ads Bidding Strategy for Your Company

Now that you already know the main Google Ads bidding strategies, how do you choose among them? The most crucial factor is understanding your advertising goals and aligning your bidding strategy with them. Are you looking to drive website traffic, generate leads, or increase sales? Knowing your end goal will help you pick the bidding strategy that optimizes your campaigns for the desired outcome. Here’s how different goals can impact your bidding strategy selection:

• Increase Website Traffic: If your primary goal is driving visitors to your website, a Maximize Clicks strategy might be suitable. This option prioritizes getting the most clicks possible within your budget, maximizing website traffic.
• Generate Leads: For lead generation campaigns, you might consider Maximize Conversions or Target CPA. The former focuses on getting as many leads as possible within your budget, while the latter allows you to set a specific cost you’re willing to pay for each lead (cost-per-action).
• Boost Sales: If driving sales is your ultimate goal, strategies like Target ROAS or Maximize Conversion Value become relevant. Target ROAS prioritizes maximizing your return on ad spend, focusing on conversions with a high value. Maximize Conversion Value optimizes for the total value of your sales within your budget, ideal for e-commerce stores with varying product margins. 
• Brand Awareness: Are you launching a new product or service? You might prioritize Target Impression Share to ensure your ad reaches a high percentage of potential customers searching for relevant terms.
• Brand Reputation Management: Are you addressing negative publicity? Manual bidding might be necessary to ensure your ad appears above negative content.

By clearly defining your goals and considering these factors, you’ll be well-equipped to choose the bidding strategy that optimizes your campaigns for success. Finally, some best practices to help your campaigns:

• Make sure you have conversion tracking on and it’s accurate.
• Your attribution model should be correct and audited. 
• Use A/B testing and monitor performance. 
• Measure KPIs including conversions, conversion rate, CPC, conversion value, etc. 
• Analyze ad performance and make adjustments as necessary.
• Gather data before making bid adjustments.
• Keep your account structure simple so it’s easier to make changes. 
• Work on the strategies that yield the best results. 

Google Ads bidding strategies are a work in progress. If something’s not working, keep trying other strategies until you get the results you’re after. Just be sure that you’re viewing your bid strategies in connection with your goals.