When it comes to Google Ads bidding, there are a lot of decisions to make. The first one is whether to manage your account manually or choose from a multitude of automated bidding options.
While automated bidding is designed to make your life easier, it’s important to select the option that will work best for you—that is, the one that will best meet your goals and objectives.
The chart below provides a summary how to direct your bidding according to your business goal:
(Users buy, complete form, etc.)
(Bring people to your site)
(Show Your ads, but traffic & conversions are secondary)
|Target CPA (A)
Average pay for conversion
|Target Search Page Location (A)
|Target ROAS (A)
|Maximize Clicks (A)
|Target Outranking Share (A)
|Maximize Conversions (A)
(A) Identifies an automated bidding type
I have tried all these, and my favourite by far is the manual option (Manual Cost Per Click). Although time consuming, it gives you full control over your bidding and it’s easy to make changes without major disruptions. There’s more about manual bidding further down this post under ‘CPC Bidding’
Now let’s have a look at the automated options.
Google Ads Automated Bidding
With automated bidding, you don’t have to set your individual keyword or ad group bids. But you also surrender various degrees of control in terms of how much you bid, at what times, and even how much you spend. That said, when done properly, this option works well for most.
How Automated Bidding Works
It’s said that the best predictor of future behaviour is past behaviour. That’s the premise that drives automated bidding. Google Ads uses ‘Machine Learning’ to track statistical models of past performance to predict future performance, and automates your bids based on this data. For example, users from some locations using mobile devices might be more likely to click on ads at a certain time of day.
Google uses something called auction time signals to predict the likelihood of someone clicking your ad. Machine Learning allows Google to assimilate a lot of variables very quickly to determine when you should bid high, low or not at all. These variables include:
- Time of Day
- Operating System
- Remarketing lists
Why I don’t use automated bidding all the time
Automated bidding relies on historical performance. If you don’t have any history (as with a new account) it probably won’t work very well at first. It can take some time for Machine Learning to gather enough data to perform well.
Define Your Objectives
For automated bidding to work well for you, you need to know what you want it to do. What is most important? Conversions? Increased website traffic? Impressions?
You need to define your objectives in specific terms. For example:
- I want X sales lead per month and my budget is Y
- My budget is A and I need 25 sales
- I want 10,000 people to see my message each week
- I want an ROI of 200%
The key here is to choose which objective is most important for your business. That’s right, you can only select one. And while this is a struggle for many business owners, the automated bidding process won’t work with more than one objective.
Smart Bidding Strategy
This is Google’s name for a group of bidding types that encourage users to take an action on a website. For example:
- Making a purchase
- Completing a form
- Sending an email (click email link)
- Clicking on a phone number
- Signing up for an email list
Conversion Tracking required
To make any bidding work, you will need to have Google Ads ‘Conversion Tracking’ established. To set up conversion tracking, follow these instructions: https://birdseyemarketing.com/2019/04/google-ads-conversion-tracking/.
Choosing your automated bidding type
Here’s a summary of the different bidding types available:
Smart Bidding Strategies – When You Users to Take Action
(Cost per Acquisition)
(Return on Ad Spend)
|Achieve your desired cost per acquisition
|Achieve your desired return on ad spend
|Spend your budget to gain as many conversions as possible.
|Automatically adjusts manual bids based on likelihood of user clicking
Target CPA (Cost Per Acquisition)
This bidding type tries to get as many conversions within your CPA as possible. Be careful not to set bid limits too low, because it could exclude you from auctions. It’s best to allow Google to set your bids.
Target ROAS (Return On Ad Spend)
This option automatically sets bids based on your target return on ad spend; it will try to get as many conversions as possible within that ROAS.
There are two important requirements associated with this option:
- Your campaign must have a minimum of 15 conversions in the past 30 days; and
- You must set values for the conversions you want.
This option will get the most conversions within your budget as possible, and it tries to spend your entire budget. This campaign can’t be part of a shared budget.
If you have a target ROI (such as 2%), you’re best to use Target CPA or Target ROAS.
This option works with manual bidding to raise or lower your bids for clicks that seem ‘likely’ to convert.
Bids are constrained by your max CPC (CPA bidding is not constrained by max CPC).
CPC (Cost Per Click) Bidding Strategies — Driving traffic to your website
CPC strategies seek out ways to drive traffic to your website. You will get a lot of visitors, but not all of them will take an action.
There are two types of CPC strategies: Manual CPC and Maximize Clicks. Let’s have a look at each.
You set the maximum amount you will spend for a click. There are tools available to help with this, including:
- Bid simulator – Explores ‘what if’ scenarios (for example: how many more impressions or clicks can you expect by setting your bid ten cents higher)
- Keyword Planner – Estimates traffic and bids
- First Page Bid Estimates – Determines what you need to bid to make first page
This is a good bid type for those who consistently spend their daily budget. Maximize clicks will take a more discerning approach using auction time signals to move bids up or down based on the likelihood of the user clicking your ad. This is also a good bid type for those who don’t have time to monitor their bids and are willing to let Google update automatically.
DO NOT USE MAXIMIZE CLICKS WHEN:
- You need to maintain a specific position or cost per conversion, or
- You can’t set individual bids.
Impression Bidding – Focusing on Your Message.
Impression Bidding types are for businesses that want to reach a lot people quickly. They are most beneficial on Google’s Display Network where image ads do very well.
|Target Search Page Location
|Target outranking Share
|Cost per thousand impressions (CPM)
|Cost per thousand Viewable Impressions (M)
|Gets ads to top of page
|Choose a domain you want to outrank
|YouTube & Display
Pay per 1,000 impressions
|Awareness, not necessarily click traffic.
Summary: When To use Automated Bidding
In summary, there are three things you need to determine before diving into automated bidding:
- Decide which advertising goal is most important to you: Action, Traffic, or Visibility.
- Track your advertising performance by setting up conversion tracking.
- Determine how much time you can dedicate to Google Ads. If you have the time, start with manual bidding to build up historical performance statistics before trying automated bidding.