Bid strategies in Google Ads - so you stay in control
Decide for yourself what is displayed in the search results pages
Bid strategies and the different options to automate Google Ads
As an entrepreneur, time is usually strictly clocked. It can therefore of course make sense not to always have to carry out individual optimizations yourself. In principle, however, you should always be aware that there is a conflict of interest here: Google has different goals than you. You want high-quality clicks that lead to purchases or leads for you. Above all, Google wants to increase its own profit and be able to control as freely as possible what is displayed on its search result pages. But you know your business best. You should therefore be able to decide for yourself which tasks you want to automate and which you want to take over yourself.
After this post, you will know the bid strategies and the different options to automate Google Ads. Then you can stay in control of your account and only use automation where it offers added value for you and your business.
Which bid strategies should I choose?
Basically, I recommend that you set the bids yourself at the beginning (manual CPC), just to get a feel for the click prices in your industry. You can proceed as follows: At the beginning, set the bids for the individual keywords to a moderate starting value, e.g. to €1 per click. Then check your keywords on a daily basis.
If Status says Below First Page Bid, then go to:
Edit > Change max CPC bids > Increase bids to CPC for first page
In this way you increase your bids so that your keywords are displayed on page 1 of Google. You can only collect the data required for optimization if your keywords are played out.
The manual bid strategy is the default and offers the most control over the campaigns. This strategy is suitable for advanced users and manageable projects. Suitable for services, a few products and generic campaigns that should run with as little wastage and control as possible.
If you optimize your campaigns manually, then you can set the CPC for each ad group and even for individual keywords. However, the fixed amount is not the amount that you will ultimately pay, but only the maximum value that you are willing to pay.
This strategy has the additional option: get more conversions with auto-optimized CPC. If you use this option, then Google may increase the max. CPC if Google believes that the click that would result from this is of more value. However, the option only really makes sense if conversions have already been tracked and user data/target groups are available.
After 2-3 months, when your numbers have leveled off and ideally you've already collected some conversions, you might consider switching to an automated bidding strategy. This gives you a bit of control, but saves valuable time.
With this strategy, the Google algorithm tries to get as many clicks as possible with the given budget. The problem: You can hardly see whether these clicks are relevant for your business and ultimately lead to conversions. And with this strategy, Google will tend to bid more on cheap keywords in order to increase the number of possible clicks. However, keywords are usually cheap when the demand for them is low.
If you really don't have time for manual bidding, you can use this strategy at the start of the campaign to generate conversion data before you switch to a conversion-based strategy.
As the name suggests, with this strategy the algorithm tries to generate as many conversions as possible with the given budget. However, the AI does not pay attention to the sales generated by the conversions. If your products differ greatly in price, this can result in your low-priced items being sold in particular.
The system also doesn't look at the cost per conversion (CPO). So it can happen that you pay far too much for one or the other conversion with this strategy. However, if you just want to generate as many sales as possible, you can use this strategy, but usually target CPA or target ROAS makes more sense.
Optimize conversion value
In contrast to maximize conversions, the turnover from the sales made is included here. However, the cost per conversion (CPO) is also ignored here. This strategy is optimal if you have been allocated a fixed budget and you want to achieve the highest possible turnover with it. From an economic point of view, however, it is not advisable to do so.
With this strategy, you can set a desired price that you are happy to pay per conversion. The algorithm then tries to achieve this target CPA in the long term. This can mean that the AI sometimes foregoes a potential conversion if the costs for it would be too high. This strategy can also result in only a fraction of your budget being spent at all. If so, your target CPA is probably set too low. However, the budget that is spent is usually used in an economically sensible manner.
But: Again, the conversion value is not taken into account. If you're just out for leads anyway, it doesn't matter. Then this strategy is probably the best solution for you. On the other hand, if you have an online shop, the target ROAS strategy usually makes more sense than target CPA.
With this strategy, you directly specify a ROAS that you want to keep approximately. This ensures profitability, even if you run an online shop. Because you are certainly willing to pay more for a conversion with a very high shopping cart value than with a low shopping cart. This strategy is highly recommended for shops.
Short ROAS digression:
The ROAS (return on ad spend) value quantifies the profit actually achieved per advertising spend in euros. The higher the calculated ROAS value, the lower the advertising costs in relation to the profit. Basically, a high ROAS value is desirable.
Target share of possible impressions
With this strategy, you can specify that, for example, 80% of the time you want to serve either Somewhere/ Top/ At the top of the search results page.
Here it makes sense to only set a maximum of 99%, because if everyone sets 100%, you and your competition are offering each other infinitely.
This is a very special strategy that only really makes sense in rare exceptional cases. Usually you don't need to consider them.
There is no one perfect bid strategy that will work for all businesses and ALWAYS work well. To choose the right bidding strategy, you need to ask yourself the following questions:
- What type of business do I have? Do I want leads or sales? Do I offer services or products in a shop?
- How much budget am I willing to spend?
- Do I have someone who can take the time to look after the Google Ads account or do I only have a limited amount of time to spare?
These are just some of the factors that go into choosing the right strategy. If, after reading this article, you are still unsure how to set up your Google Ads account or you would like to leave the topic in professional hands, please do not hesitate to contact us.