Google Ads Bidding Strategy - A Quick Overview

Choosing the correct bidding strategy in Google Ads is essential for success. Many advertisers face difficulties, leading to reduced performance. Let’s explore the most effective strategies, including valuable context and tips, for improving your Google Ads results.

Conversion Value: Focus on High-Value Sales

• What It Is: Prioritizes higher-value conversions, such as bigger purchases.
• When to Use: Ideal for businesses aiming to boost revenue from high-ticket products.
• How it works: Google’s algorithm identifies more profitable conversions and shifts your budget toward these opportunities. For example, if some customers spend more, Google will target similar users to maximize revenue.
• Bonus Tip: Use this strategy if your goal is to increase your average order value. Ensure your product pricing and targeting align with your high-value sales objectives.

Target ROAS: Maximizing Return on Ad Spend

• What It Is: Set a desired percentage return on ad spend (e.g., 300%). Google focuses on achieving this return by targeting users likely to deliver that ROAS.
• When to Use: Best for businesses looking to scale profits while maintaining a consistent ROAS.
• How it works: This strategy works well when you have enough conversion data. It allocates more budget where there’s a higher likelihood of meeting the ROAS target. However, if there’s limited data, the results may vary.
• Bonus Tip: Allow your campaigns to run for at least 30 days before setting a ROAS target. This helps establish a stable data foundation for tracking accurate performance.

Target CPA: Focus on Cost Per Action

• What It Is: Sets a specific cost per action (e.g., £50 per lead). Google aims to deliver leads or conversions at or below that CPA.
• When to Use: Perfect for businesses focused on controlling ad spend while generating leads or conversions.
• How it works: This strategy depends on historical performance data. Google uses prior data to determine how much you should pay per action. Ensure the CPA is realistic based on past campaigns to avoid underperformance.
• Bonus Tip: Avoid setting your CPA target too low initially. Gather performance data, then fine-tune your CPA to prevent the campaign from stalling.

Optimize for Clicks: When to Use It

• What It Is: Focuses on gaining the most clicks at the lowest cost.
• When to Use: Best for traffic-driven goals like blog visits or brand exposure where conversions aren’t the main objective.
• How it works: While this strategy can drive site traffic, it’s not recommended for businesses seeking conversions. Clicks alone don’t guarantee sales, making it less suitable for e-commerce.
• Bonus Tip: Use click-based strategies for awareness campaigns and pair them with retargeting to convert that traffic later into sales or leads.

Higher CPC with Targeting: What to Expect

• Using Target ROAS or Target CPA may increase your cost-per-click (CPC).
• Accept higher CPCs when prioritizing quality conversions over sheer volume.
• Optimizing for conversions often leads to increased CPCs, but this can be justified if ROAS or CPA improves. Quality clicks that drive conversions are more valuable than cheaper, non-converting clicks.
• Bonus Tip: While monitoring CPC, focus on overall return. It’s more beneficial to increase ROAS than simply lowering CPC costs.

Patience in Adjusting Targets: Timing Is Everything

• Allow campaigns to gather data before adjusting ROAS or CPA targets.
• Always. Data-driven decision-making ensures machine learning algorithms perform optimally.
• Campaigns need around 30 days to collect enough data. Making changes prematurely can disrupt the algorithm and lower performance.
• Bonus Tip: Review after a month. Avoid frequent adjustments, allowing Google’s algorithm to stabilize and optimize performance. 

Bidding strategies are essential to the success of your Google Ads campaign. To achieve the best results, allow the algorithm time to optimize, test multiple methods, and refine based on reliable data.