In this post I’m going to talk about the different bidding methods available in Google Ads and benefits and drawbacks of each.
If you have questions about bidding as you watch this video, go ahead and ask in the comments. I’ll be happy to post a reply.
So let’s get into this. I’m going to focus on Google Search Ads and Google Display Ads.
What Do You Want To Accomplish?
Before selecting the type of bidding that’s right for your campaign, you need to know what you want to accomplish. Is your goal to drive traffic to a website, is it to get people to call your business, is it to sell a product?
You HAVE TO know what you want to happen when someone sees your ad and what a successful outcome looks like. Otherwise, it’s like using a GPS map from 2007… you realize you are way off course, you’ve wasted a bunch of time, the kids and your spouse are yelling at you and the dog has to pee.
Google is going to do their best to get you to select one of the automated forms of bidding, which they refer to as Smart Bidding. The algorithm will do most of the bidding work for you. But don’t worry, if you use one of the other types of bidding that doesn’t mean you’re a dummy.
As with many of the options in Google, you’ll want to test different types of bidding to see which delivers the best results. Most of our client’s accounts use more than one bidding type, and that’s because we tested to see which type produced the best results.
When having success with one type of bidding we’ll often start new campaigns with the same bid type, but if it doesn’t produce results in line with our expectations, we test other bidding options.
So here we go… first is
Target cost per action (CPA)
What you’re doing with this option is specifying a dollar amount you want to pay for conversions. Google will recommend a figure, which is based on what you’ve paid for recent conversions. It’s a good starting place, and then you can adjust based on results.
Here’s the catch… you want at least 50 conversions in the last 30 days. If you don’t have enough conversions in the campaign or account, this form of bidding will flounder. Just because Target Cost Per Action is available doesn’t mean Google can actually be at or below that number.
Also beware of Google reps that are trying to move you to automated bidding when it doesn’t seem to make sense for your situation. I’ve heard numbers as low as 10 conversions is enough for the algorithm to optimize for CPA, but the good reps have all told us 50 is what you need to get the best results.
If your campaign is for a higher ticket sale and you have a low number of conversions each month, this form of bidding probably isn’t right for you.
Here’s a link to Google’s support page for Target Cost per Action, and it goes into detail about the set-up process.
Target return on ad spend (ROAS)
This option allows you to set a Target conversion value for the conversions being tracked. This number is an average, and Google optimizes the bidding up or down based on what they estimate the value to be of the user.
If you are service based business such as a law firm or plumber, the value of a client can vary widely from one lead to the next, even if they need the same service.
For an e-commerce business, you can set the value of the product, and Google will bid to try and maximize the conversions based on your value.
Google claims this form of bidding is good with a minimum of 15 conversions in the last 30 days. As always, more data to feed the algorithm will result in a better outcome.
For details on how to set up, here’s is a link to the Google support page:
This is like cost per action, but you are telling Google to get as many conversions as you can for the budget. The cost per conversion might be high, or it might be low, but Google will do it’s best to spend you entire budget.
Here is the link to the Google support page for Maximize Conversions:
Maximize Conversion Value
This is like Maximize Conversions but you must set up your conversion tracking with transaction-specific values. Google will optimize for the best conversion value.
Here is the link to the Google support set-up page:
Enhanced cost per click (ECPC)
This is a manual form of bidding with the enhancement being that Google adjusts your bids automatically for clicks it thinks will lead to conversions.
Manual Cost Per Click Bidding
This is the most basic form of bidding. You set the bids at the ad group and keyword level based on what you are willing to pay.
We often use this when setting up a new campaign to give us benchmarks. We can see what search impression share we are getting, what percentage of the time we are at the top of the page, quality score, session duration, click-through-rate, impressions and conversions.
This is just like it sounds… Google is going to try and get you the most clicks for your budget. When you don’t have enough conversion volume in your account or the campaign, this can get the traffic to your landing page and start to build up conversions.
If you aren’t tracking conversions and clicks is how you plan to judge success or failure, this is a good starting point.
The bidding methods we’ve talked about so far are designed to find the right audience, get them to your website or landing page and take a desired action, such as make a purchase or schedule an appointment.
If the business is trying to drive traffic to a website to build awareness or name recognition, there are options for bidding that focus on impressions.
Target Impression Share
If you want your ads to show up 90% of the time, and you want them to be at the top of the page, meaning within the top 4 ads, you can set your budget and bids accordingly.
We had a client that wanted to appear in searches for a certain geographic area anytime someone searched on our keywords because they perceived a competitor was beating them in that region. It was more important for the ad to always be there than use one of the conversion based forms of bidding.
vCPM: Viewable Cost-Per-Thousand
vCPM is available specifically for the Google Display Network. Here you set the amount you are willing to pay on a cost-per-thousand basis for viewable impressions.
As I mentioned earlier, Google is doing their best to push advertisers into one of the automated forms of bidding. If automated bidding gets you to your goals, great. If manual bidding or partially automated works better for your objectives, then that’s what you should use.
Google has an amazing algorithm that has several decades worth of data to use in helping your ads perform. And it’s learning more every minute of every day. But people don’t always behave as expected, and that’s why you have to watch your campaigns carefully and adjust based on results.
I use the phrase “eyes on the account.” You need to be paying attention to your ads. If you don’t, Google will still take your money. You just won’t get the results you want.
If you have comments or questions, post them in the comment section below. I’m always happy to respond.
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Thanks for reading. Feel free to post questions in the comment section below.