Determine a Good Bidding Strategy

Written on 18/05/2020

Determine a Good Bidding Strategy

3 factors to decide your bidding strategy

  • Your overall budgetYes! You’ll definitely want to consider your overall budget when setting bids.
  • My campaign goals
    Yes! Depending on your campaign goals, you may care more about getting clicks, impressions, or conversions. With Google Ads, you can choose a bidding strategy that drives towards each. 
  • The value of a sale or conversionYes! Depending on how much a sale is worth, you may bid more or less. You may not want to spend $100 for a click if you’re selling a $2 product, but $100 may make sense if your sales are worth thousands.

Bidding basics

Google Ads runs an auction every time it has an ad space to fill — whether that’s on a search results page, blog, news site, etc. Each auction decides which ads will show, at that moment, and in that space.

Your bid puts you in the auction. Without a proper bid, you won’t be placed in the auction. Without being placed in the auction, your ad will not show.

Google Ads gives you several ways to bid for your ads. Depending on which networks your campaign is targeting, and whether you want to focus on getting clicks, impressions, or conversions, you can determine which strategy is best for you.

Two ways to manage your bids

There are two ways to manage your bidding in Google Ads: manual bidding and automated bidding. Manual bidding is where you control the bidding yourself. Automated, is where you let Google Ads do the heavy lifting for you. Let’s take a closer look at each and then dig in on how to pick the best strategy for your business.

Manual bidding

Manual bidding lets you manually set bids at the ad group level, for individual keywords, or for ad placements, so you know you’re bidding for the clicks that mean the most to you.

Imagine you run a hiking club in Vermont. You could use manual bidding to bid higher for keywords like “Vermont hiking” and a different amount for broader keywords like “hiking maps.” 

Automated bidding

With automated bidding you can set a daily budget and then have Google Ads automatically adjust your bids to get the most clicks or conversions possible within your budget.

Let’s say you want to maximize clicks for the low-performing keywords in one of your campaigns, but don’t have time to manually manage each keyword. By adding those keywords to a portfolio and setting a target spend, you allow Google Ads to automatically maximize the bids for you!

Use your goals to determine a bidding strategy

Whether you manage your bids manually or automatically, you’ll want to think about what goal you’re looking to achieve.

  • Goal: Build awarenessFocusing on impressions may be your strategy. You can use cost per thousand viewable impressions (vCPM) or cost per view (CPV) bidding to put your message in front of customers.
  • Goal: Drive web visitsFocusing on clicks could be ideal for you. Cost-per-click (CPC) bidding—manual or automatic—may be right for your campaign.
  • Goal: Drive online salesIt may be best to implement conversion tracking in your campaign and focus on conversions. Cost-per-acquisition (CPA) bidding lets you do just that.

3 tools to determine your CPC bids:

  • Bid simulator: Bid simulator runs “what-if” scenarios like, “How many more impressions would I have gotten if my bid had been $0.10 higher last week?”
  • Keyword Planner: Keyword Planner shows you how often some keywords get searched, and gives you cost estimates at a glance.
  • First-page bid estimates: First-page bid estimates helps you see how much you may need to bid to put your ad on the first page of Google Search results.

Bidding for ROI

Internet traffic is always changing, so it’s important to re-evaluate your CPC bids regularly. Once you’ve set maximum CPC amounts that you’re comfortable with, see how many clicks your ads begin to accrue, and whether those clicks lead to business results on your website.

What keywords lead to the most clicks on your ads?

To see how many clicks you’re getting per keyword and how much they cost, go to the “keywords” tab in your account. Try filtering your keywords by click-through rate to see which keywords get you a lot of impressions, but few clicks. If your goal is to generate sales, these are the keywords that are probably not working so well. Adjust your bids accordingly. 

How do I increase my ROI?

Once you’ve identified which keywords, locations, times, and devices are getting good results, you can adjust your bids accordingly. For instance, if a keyword has a low average CPC but each click converts well, you may try increasing its max CPC bid. This could improve the ad’s average position for that keyword, giving your ads more exposure and potentially increasing your ROI.