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Archita Sharma on August 4, 2020 (last modified on March 3, 2023) • 24 minute read
Imagine having the right amount of budget to run your campaigns, yet all of it goes away in vain because you havenât set up an optimized way to bid money. Money wasted is simply money lost.
With a few tweaks & optimization to your Google ad campaigns though, you can set a cost-effective Google Bidding strategy that helps you utilize your budget efficiently and achieve a low CPC and maximum ROAS.
So, Iâll walk you through the best tips on executing smart & cost-effective Google ads bidding strategies according to what 40 PPC experts have shared with us in our latest report.Hereâs all that youâll be learning in this guide:
Letâs start with understanding briefly what is Google Ads Bidding & what are the various ways in which you can set it up.
Simply put: Google Ads Bidding is an auction for a particular position on Google search ads that advertisers bid for. As an advertiser, you have to set up the keywords you want to bid for and the maximum amount youâre willing to spend.
This is a way to tell your ad publisher (here: Google), the amount you can pay for an ad copy to appear & get clicked (for display & search ads respectively) in comparison to your competitors.
Letâs also understand what is Maximum CPC Bid, a metric that weâll be talking about frequently in this article.
Maximum CPC Bid: The highest amount you’re willing to pay for a click on your ad. It determines the results and ROI of your ad campaigns.
Google lets you set your campaign goals aligned to what matters to your business the most – clicks, impressions, or conversions. Based on these goals, your Google Ads bidding strategy is supposed to be set.
If you go for optimizing for maximum clicks, depending on your CPC bid (the maximum you can spend for a particular keyword) and quality score (metric for relevancy & usefulness of your ad), your ad rank is decided. And, in turn, your actual position of the ad copy.
What is an Ad Rank?
Ad Rank = CPC Bid * Quality Score The higher the ad rank, the better the position of the ad.
This clearly shows that your ad position doesnât just depend on the bid. So if your competitor is bidding a higher price but has a poor ad with low quality score, you win with a lower bid and maximum clicks at a lower CPC.
Based on what your campaign goals are, there are different types of Google Ads bidding that you can choose:
From our extensive survey, weâve seen that more than 20% of respondents focus on either Target CPA or maximize for conversions while setting a bid for their Google Ads Campaign.
Here, I selected the goal as the Website Traffic for a Google Search Ad Campaign.
Since I had selected Website Traffic as my goal, the recommended strategy is âMaximize Conversionsâ.Letâs move to get to learn more about the bidding methods.
Automated Bidding is a method wherein the bids are adjusted & set automatically based on your campaign goals & chances to get clicked or get conversions. In short, you donât have to specify bids for ad groups, unlike manual bidding.
For marketers who have their ad campaigns with thousands of keywords, managing bidding manually for each of them can get tedious. Thatâs where Google offers an automated bidding option to understand your past data and optimize your bids for keywords based on that.
Below are the types of Automated Bidding based on different campaign goals:
To monitor and improve the performance of your Google Ads campaigns, you can spend hours running a variety of reports and compiling selected metrics manually into one dashboard. Or, you can pull all your data automatically into one dashboard with Databox.
You can instantly review all of your campaigns and drill down on important metrics, such as:
Now you can benefit from the experience of our Google Ads experts, who have put together a plug-and-play Databox template showing all the key insights you need to optimize your Google Ads campaigns for conversion and ROI. Itâs simple to implement and start using as a standalone dashboard or in PPC reports, and best of all, itâs free!
You can easily set it up in just a few clicks – no coding required.
To set up the dashboard, follow these 3 simple steps:
Step 1: Get the template
Step 2: Connect your Google Ads account with Databox.
Step 3: Watch your dashboard populate in seconds.
Smart Bidding is another Google ads bidding strategy (a subset of Automated bidding) that runs on Machine Learning, wherein your goal of the campaign is conversions.
If you want users to take a particular action on the page youâre redirecting them to from the ad, and have set up conversion tracking, this bidding method is for you.
Most of the smart bidding options are similar to that of automated bidding. But thereâs one interesting type of Smart Bidding – Enhanced cost per click (ECPC). In this method, you can combine with manual CPC bidding to automatically adjust your manual bids for maximum conversions.
Time to dig into the expert advice of 40 PPC marketers on how to execute a Cost-Effective Google Ads Bidding Strategy.
We’ve put down the most effective and impactful tips to execute a Google Ads Bidding strategy:
Well, any experiment or strategy works the best if you are clear about your end goal. The same goes for opting for the bid strategies, thatâs based on your campaign goal.
Pouria from Lake One Digital also agrees, âIf I could only give one tip, I would say to keep in mind the business model, their business goals, and what is most important. With this knowledge, the advertiser is better equipped to choose which type of bidding strategy to use that will be the most cost-effective for the business.â
John Howard of COUPON LAW states the same about choosing a bidding strategy. âTo execute a cost-effective Google Ads bidding strategy is to identify your goal and choose a bidding strategy that is appropriate with your goal.â
Ask yourself, what is that youâre trying to achieve through this ad campaign.
Chris Gadek from AdQuick breaks it down this way: âFor more clicks, go with a Cost Per Click strategy, and for more awareness, opt for a strategy solidly based on impressions.â
And if youâve got a campaign starting, Blake Sherman of SL Development, suggests, âWhen first starting off with a new campaign with no data or no value, I choose to start off with maximizing clicks.â
Similarly, Oliver Andrews of OA Design Services points out: âIf the primary goal of the campaign is to drive conversions, selecting the target CPA bids will focus on trying to convert users at a specific acquisition cost. With this method, Google Ads will automatically establish your offers in each campaign based on your CPA. While some conversions may cost more, others may cost less to match and align with your acquisition costs.â
Pritha Bose from Automate.io also suggests to list down & understand the end goal of your campaign. âWhether it is to generate leads, boost a brand recall, find ROI of your ad spend or increase sales – you should have your goal set before you bid.â, says, Bose.
What about E-Commerce businesses?
Michelle Douglas of Green Goo, explains their strategy for their e-commerce store, âSince we are an e-commerce store, the most cost-effective Google Ads bidding strategy is to maximize product sales, so we chose to maximize Conversions as our bidding strategy. Google’s machine automation is so advanced, they automatically run our bidding for us so we get the most conversions for our money.â
Ultimately, it all boils down to one thing. Understand what your business model and goals are and in-turn ties them up to the relevant Google Ads Bidding strategy.
Editorâs Note: Looking to track the most important metrics for measuring the cost-effectiveness of your Google AdWords Campaign? Download this free Google AdWords Campaign Performance template to view all your important metrics like CPC, CTR, Avg. Position, Conversions & Conversion Rate.
Overshooting your campaign budget due to unexpected changes in bids & keyword trends can give you chills down the spine. So, relying on Manual Bidding can save you from such nightmares.And this happens not just for smaller accounts but may happen with larger running campaign accounts as well.
For such scenarios, Tyler Tafelsky of Yisoo, suggests – âFor smaller accounts, seldomly do we rely on automated bidding strategies with Google Ads. Although it’s ‘not recommended,’ we prefer taking a manual approach to ensure we’re not under- or over-bidding, or that our CPCs remain in check. Unless you’re dealing with hundreds of keywords, managing this is not as overwhelming at seems.”
How does manual bidding help you?
âBy utilizing a manual bid strategy you’re able to control how much you pay per click. You’re able to prioritize your highest converting keywords by bidding higher while keeping costs low on your middle and low converters.â says, Alan Gruntz of BarkleyREI.
Mia Liang of Upgrow agrees – âI suggest using Manual CPC, you will gain more control and the ability to fully optimize your ads, by setting up each keyword or ad group bid to precisely what you want. This way you guarantee that you are not overspending and you can ensure you get something from your budget.â
Though manual bidding comes along with its own cons, the benefits make us put the cons on the back-burner.
AskUsForAnythingâs Sanju Ganglani says, âThough manual bidding is more labour-intensive, it allows for you to keep an eye on your investment and ensure its constantly performing.â
As discussed above, we know the al Bidding strategy works like a charm. But thatâs not the case always. Scenarios, where you have multiple campaigns running, managing them via manual bidding, go for a toss.
Lexi Sheehy of MediaCrossing, explains how automated bidding helps. âAutomated rules can be set up to automatically pause keywords that are high cost, low conversion; pause campaigns when they reach projected budget threshold; adjust high-performance keyword bids automatically to increase return on ad spend or ROAS.â
Starting your campaigns on Automated Bidding without any previous data is like hitting a blank wall.
âOnce you are getting a decent level of conversions (30+ per month), consider switching to ECPC or an automated strategy like maximize conversions, but be prepared for a jump in your CPCs!â suggests Reva Cutting from Cutting Edge Digital.
SEO Worksâ Rob Drummond agrees, âSwitch to automated bidding (usually CPA or ROAS) once you have 30+ conversions a month in a campaign. Below that stick to manual bidding with eCPC turned offâ.
Ryan Moothart from Portent points out a different angle to Automated Bidding Strategy.
âWhen creating a new campaign in your Google Ads account, start out with Maximize Clicks automated bidding and set a maximum CPC bid threshold you know will likely not result in you over-spending on this campaign. This will allow you to kick start this campaign effectively and drive traffic quickly.
Once you get enough click data and conversion data to see what the average cost per conversion actually is, then change your campaign’s bid setting to Target CPA or Maximize Conversionsâ says Moothart.
While setting up your Google Ads bidding, itâs obvious that youâ ll wish to target the #1 ad position.
But what hereâs the thing. Letâs consider two scenarios:1) Bidding & spending the cost for the #1 position and receiving X clicks.2) Spending a lower cost for the #2 and further down positions, and yet receiving the same no. of clicks.
The cost-effective option would be the latter, right?
Rentroundâs Rajdeep Dosanjh explains this strategy. âFor some keywords, the bids to be in the first position are twice or three times as high as the second or third position. Avoiding bidding for the first position can lower your cost per click and therefore cost per conversion.
Of course, you may not get as many clicks as the first position would provide you. However, your cost per conversion is likely to be lower.”
Whenever a user is searching on Google, itâs a human tendency to automatically click on the first SERP (be it organic or paid).
Dosanjh clearly breaks down this strategy for us: âIn addition, itâs often an instinct for users to just click on the first result, when it may not be what is exactly being looked for. This is why first positions can have lower conversion rates than lower-paid ad positions. This again helps capture a better conversion rate, at a lower price.
Another point is if your ad is being clicked on with a high conversion rate and low page bounce rate (people leaving the site without visiting other pages), Google starts to recognise your page as relevant for the searched terms.
This can lead to Google placing your ads in a higher position than you’re actually bidding for. The reward is then you may be getting your ad in the first position, while not paying the price.â says Dosanjh.
This bidding strategy is one of the simplest and easiest ways to optimize your cost & lower CPC.
After running your campaigns on manual bidding for a while and gathering some ad data, smart bidding strategies like Target CPA are preferred for higher conversions.
If youâre just starting out on Google Ads, donât jump to Target CPA bidding strategy right away.
Ashish Gupta of CodeLathe (FileCloud) suggests following a routine to get to Target CPA Bidding.
âFor a new campaign, start with maximize clicks and find the average cost per lead for your campaigns, after 2-4 weeks, depending on the number of conversions in the account, optimize for Maximize conversions and after another 2 weeks, move to a target cost per acquisition,â says Gupta.
Jasmine Hippe of Augurian, agrees, âTarget CPA bidding is my go-to bidding strategy when a lead gen client needs to wrangle in costs in Google Ads. After implementing target CPA bidding, be sure to adjust CPA targets by ad group based on historic data in order to drive further cost-savings and conversion gains.â
Thereâs a tip to ensure you have the maximum data to get the most of this strategy too. UnAgencyâs Adam Ostapinski explains this clearly, âThe success of this kind of campaign depends on how much conversion data you send to Google Ads. As a default, you track completed purchases, completed lead forms, etc. This is not enough.
Let’s take a step back and focus on micro-conversions, like some on-page engagements, email address click, button-clicks to start a lead form or just AddToCart/AddToWishlist button-clicks. This will provide campaigns with a way more data (from my experience it will be 4-5x more conversions).â
And while implementing Target CPA bid strategy, there are certain adjustments & specifications you need to make to avoid any red flags.
âYou need to remember to adjust Target CPA bids accordingly. You need to decrease them to 30% of your initial setting. Otherwise, your campaign will be permanently limited by budgetâ flags and Google will overspend daily budget.â shares Ostapinski.
Enhanced CPC bid strategy (ECPC) helps you maximize conversions & conversion value by adjusting your CPC. It is a bidding strategy that involves manual bidding + smart bidding (like Target CPA or Target ROAS).
But when should you prefer enhanced CPC bid strategy? Jus Chall of Skein breaks it down for us. âAs the name suggests, you will only pay whenever someone clicks on your page and I think that the most cost-effective strategy that you can avail with Google.
Google has the right to change your bid amount based on the performance of your website. When the search is too competitive and Cost Per Click is high, Google will offer a lower bid because of the lower chance of generating leads.â says Chall.
Michael Anderson of SIGNAL+POWER, explains how enhanced CPC bid strategy works best.
âAlthough Google strongly encourages advertisers to select an automated bidding strategy and relinquish control of their keyword’s cost per click, I prefer to use enhanced CPC and to manually raise and lower keyword bids.
One tip that helps me do this is to customize the columns in order to view Google Analytics data in addition to the standard metrics. This additional data includes keyword bounce rate, average pages per session, and average session duration, all of which are very important.
After you’ve reviewed these additional metrics and identified keywords that are not driving engagement, you can manually reduce the bids in order to divert budget towards higher performing keywords. This additional data is essential in analyzing the performance of any given keyword as it gives you more insight into the user’s journey after clicking on your ad.â explains Michael.
Using manual CPC with enhanced CPC bid strategy works best for maximizing ROAS and minimizing the cost spent. How?
Bailey Hahn of Summit Digital Marketing, explains: âYou can manually adjust keyword bids above the first position CPC for each individual keyword. This means if you have particular keywords that are converting at an extremely higher level than the rest of your account, you can make sure this keyword is #1 in search rankings each and every search.â
âYou can also cost-control the keywords that seem to not be as efficient, therefore, maximizing ad spend and ROAS.â adds Hahn.
Editorâs Note: Want to check out how to track conversions per day metric for your campaign? Download this free Google Ads Report template and a visual dashboard of all your conversion metrics.
As the name suggests, in this bid strategy, Google Ads automatically raises or lowers your bid to outrank your ads from your competitorsâ.
When does this strategy come in hand?
Morgan Bachemin of Online Optimism, neatly explains, âFor this method, you need to have a budget that is going to allow you to appear at the position you want in whatever vertical, especially if it is a competitive one. The algorithm will try to maximize your budget as much as possible to gain those positions you are seeking. And if it isnât there, youâre going to be spending without much to show for it.âAdding to that, thereâs one limitation to this strategy. You can only set one domain that you wish to outrank per bid strategy.
This tip isnât a specific type of bidding strategy but focuses on minor tweaks and optimizations to be made on top of your selected bidding strategy.
Splitting your budget makes sense to be on the safer side. You wouldnât want to assign the entire budget to one particular location or ad group and end up exhausting it without any significant results.
Noelle Del Grippo says, âImprove your bidding strategy by optimizing both locations and ad schedule. I recommend splitting up your locations, rather than having the whole United States targeted, break the locations out by state. This way you can see what state is performing better and adjust bids based on the metrics each state is showing.
The same applies to ad schedules. âRather than having all hours grouped together, break them out into 3-hour chunks so you can start to identify which are performing better and allocate the budget where it makes sense,â says Grippo.
Selecting the right Google Ads bidding method clubbed with choosing the right set of keywords, is like a match made in heaven for a high ROI.In the above section, weâve extensively gone through the type of bidding methods, now letâs look at a few tips for keywords.
Itâs obvious that the higher the search volume of a keyword, the higher the CPC and ad spend.
Alejandro Rioja of So Influential explains, âChasing high volume keywords with high CPC will result in more ad spend. If you find a few keywords with high search volume and low CPC, utilize those in your campaign as they will be extremely cost-effective.
Rioja further adds, âTo run a cost-effective ad campaign, maximizing conversions and the enhanced cost per click are the two strategies you can rely on.â
With just one keyword in an ad group, Single Keyword Ad Groups is a lesser-known & unique strategy for cost-effective Google Ads bidding.
Bonus point: this also increases your Quality Score metric for Google Ads. Research by WordStream says, this, in turn, results in a 16% decrease in your cost per conversion.
Tamara Marie Johnson of Smallpdf explains, âTo get the most bang for your advertising buck, try structuring your Google Ads into single-keyword ad groups or SKAGs. With SKAGs, you’ll see your CTR and Quality Score go up and your CPC and CPA go down. In other words, your ads will perform well on a tight budget!â
So when on a tight budget, head to this complete guide by CXL Institute on the SKAGs that can help you get the most out of this strategy.
While implementing a bid strategy, researching your negative keywords gives you an edge by eliminating the loopholes where money can be wasted.
David Tumbull of TX Training, walks us through this, âWhen setting our Google Ads bidding strategy we first research every negative keyword we can think of. We then start the campaign with a low budget of $10 per day and look for other negative keywords. You don’t want to spend $10,000 showing your ads to people who are searching for an unrelated solution.â
Imagine losing money to such scenarios. âOffering luxury cars to someone looking for a station wagon. It’s still a car but not what they are looking forâ, adds Tumbull.
Long-tail keywords are the gold mine opportunities in a Google Ads campaign. Why?
They are less competitive and in-turn give you a better ROAS (Return on Ad Spend) and utilize your budget efficiently.
David Waiter of Direction explains this, âA smart way to maximize your Google Ads budget is to target long-tail exact match keywords with a quality score of 10 and over, that are in the form of a question… Question-based search queries are quite common and are frequently ignored by big companies with large Google Ads budgets. This allows your company to avoid highly competitive keywords that may be cluttered with businesses with more resources than you.
Itâs important to target keywords with a solid quality score so you donât waste money on something with minimal revenue potential. This is a savvy strategy for any business vying for organic traffic against competitors with larger budgets.â
So, implement this tip by getting your keyword research on long-tail keywords ready and see how your ROAS metric shoots up.
After all the efforts that you put in segregating your keywords and assigning bids, youâll end up messing up with your budget if your keywords, ad copies, and landing page are not in sync.
This might not be a direct tip for Google Ads Bidding strategy, but definitely among the one that affects your budget and ad spend.
How?
Hereâs what Jonathan Aufray of Growth Hackers Agency, clearly states the reason for low conversion rate, âToo many marketers bring traffic to a homepage, a page that isn’t optimized for conversions or even a page that is unrelated with the ad itself.â
Michael Alexis of TeamBuilding shares an effective tip, âMy preferred bidding strategy on Google Ads is to optimize for conversions. With this bidding strategy, one way you can measurably improve your results is by improving your conversion rates.â
For optimizing for conversions, various experiments like CTR experiment for Ads, tweaking your landing page copy, and design elements.
âI’ve found that reducing the vertical height of landing pages consistently improves their performance. You can also provide clearer messaging, ratings, and reviews and similar to build trust,â said Alexis.
Woah. Weâve almost come to an end of all the tips for the Google Ads Bidding strategies. And in the due course, weâve come across quite some metrics, tracking which will be essential for you to optimize your bidding strategies.
Databox works like a breeze for pulling out these metrics from your Google AdWords account & presenting it in a visualized dashboard for FREE.
Here are some of the metrics you can track with Databox visualizations:
Looking to effectively track all your AdWords Metrics at one place? Sign up for Databox for free and start visualizing your data.
Follow the above tips and select the right Google Ads Bidding strategy for your campaigns. Understand your campaign goals and select the right tips by our PPC experts to execute a cost-effective bidding plan. And if you’ve just started our, select Manual Bidding to rescue yourselves from over-spending.
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