How to choose a bid management strategy in Google Ads?

Google AdWords Bidding Strategy Contextual advertising

Choosing the right Google Ads bidding strategy is guaranteed to help you reduce your ad spend. However, this task is not as easy as it might seem.

The fact is that AdWords has eight automatic strategies for setting the cost of the transition and one manual one. This article will help the user to select the most suitable one for use in a particular situation.

What to consider when selecting a Google Ads bidding strategy?

Determining the most effective bidding method is done during the initial launch and setup of your Google AdWords campaign. Consider the following:

  1. Bid determination in manual or auto mode. Automation allows you not to fiddle with the settings. This is convenient and does not take much time, even when it comes to an account with dozens, and sometimes hundreds, of active campaigns. The disadvantage of this option is that the system completely controls the entire process. Strategies with manual settings give greater freedom in managing your account. All parameters are set and edited by the advertiser at any time. But this requires a significant investment of time. This method should not be used without sufficient experience with Google AdWords. Beginners are usually advised to use automatic bid selection;
  2. The goal of the campaign. You need to understand what goal you want to achieve by setting up advertising – to increase coverage, get clicks to the site, increase the number of orders. Each of the goals has its own bidding algorithm in Google Ads, which is better to use in this or that case.

Manual bid management in Google AdWords

Manual bidding

Google AdWords’ manual bidding strategy gives you a high degree of control over your account settings. It is indispensable in the presence of an understanding of which key phrases are most effective and where the ad should be placed. It is possible to set the maximum cost per click both for each key query and for the list of ads. Management is extremely simple – if the position is not high enough, you should just increase the cost per click.

The benefits of manual control include full control over the parameters of the PK. The main disadvantages are the significant time spent on adjustments and analytics, as well as the need to have sufficient experience with the advertising account.

If you enable the “Cost Per Conversion Optimizer” as part of manual control, the system can increase the bid within the limits set by the advertiser if the conversion probability is high, and decrease it if this probability decreases.

The principle by which rates are set manually when launching a new AC is as follows:

  • The highest is set for queries with the highest potential;
  • To achieve high Quality Score values, bids at the start should be one third higher than those suggested by Google. Otherwise, the quality score will drop to 2-3 and significant efforts will be required to improve it;
  • Next, you need to determine the relationship between the position of the ad on the page and the cost of the transition;
  • When you get consistent results, the amount per click can be gradually adjusted down.

Automatic bidding in Google Ads

Google Ads Auto Strategies

Automatic strategies are a good way to spend your budget on achieving specific goals instead of a lot of clicks on inefficient queries. Understanding the algorithms of the system and their scope of use will allow you to spend money with the greatest benefit. At the moment, there are 8 strategies, which will be discussed later.

Target CPA

When you use it, Google automatically changes bids for ads that are more likely to lead to the desired conversion. The algorithm is configured to maximize the number of target actions at the required cost. On average, the final price per action will be close to the set one, but sometimes it will differ from it up or down. The strategy works most effectively when there are no budget restrictions, but the cost of the conversion is rigidly fixed.

The use is relevant only if a sufficient amount of statistics has been collected in the account before. Then the Google AdWords mechanism will automatically adjust the price indicators.

If you immediately set the desired rates, then the risk of losing traffic and, as a result, the number of required actions on the site increases. At the initial stage, you should set the actual price, analyze the advertising campaign for at least two weeks, and only after that gradually change the prices to the desired level.

Target ROAS

When applying this strategy, you can set a limit on the ROI (often used as an abbreviation ROI), and the system will set the cost per click to provide the desired ROI.

It is used where there is a need to increase the budget while maintaining the current profitability. At the initial stage, evaluate the performance of the system by specifying the standard ROI. After the system begins to withstand the required level of ROI, you can increase the costs.

Max Conversions

An ideal strategy when you need to increase the number of applications. The only limit available is the campaign’s daily budget. The price of the conversion itself is not fixed by the advertiser. The system independently sets rates, focusing on maximizing the number of received orders within a given budget.

Not used with general budgets because costs and average cost per conversion fluctuate significantly.

Important! It is necessary to control the value of the daily budget, because in this strategy it is used to the maximum. This can lead to higher costs.

CPA Optimizer

When there is a reasonable forecast of an increase in traffic, such as a sale or a sharp seasonal surge in demand, this strategy is more suitable than any other. To have time to train the algorithm, set it up a few days before the expected increase in traffic.

There are two rendering mechanisms: standard and accelerated. The algorithm works effectively in the absence of a budget deficit and round-the-clock display. If the advertising budget is modest, then some users will not see it. After all, as soon as the daily limit is reached, the impressions will stop.

Hint! During periods of a sharp increase in demand, competition intensifies significantly, so it is wise to raise your Google Ads bids during this time.

Max clicks

It works as follows: the user is limited only by the daily budget, and the system within it provides as many clicks as possible. The approach is in demand by Internet portals, where not applications are important, but traffic. For example, it is suitable for news sites.

The advertiser also has the option to set a maximum cost per click limit, but this setting is not enabled by default. To enable it, activate the CPA Optimizer.

Target position on the search page

If you want to keep your ads on the first page of search results or in the first place above the SERPs, then this is the right strategy. But it is not intended for CCM.

The following options are available to choose from:

  • First place in advertising search results;
  • Any place on the first page of search results.

Target Win Rate

Allows an advertiser to set the frequency of winning an auction with a competing domain by limiting the maximum bid size. The system calculates the optimal ad position in comparison with a competitor, but does not ensure presence on the first page.

This unusual and curious strategy is rarely used. It makes sense to use it if the advertiser has a few competitors or has the most important competitors from a large list.

Target impression share

The mechanism of operation is similar to the “Target position on the search page” algorithm, but it is possible to set the required share of impressions in a certain part of the initial page of the search results, while limiting the maximum bid.

Attention! The most efficient work is possible only after a certain time, which is required for the accumulation of statistical data.

Which strategy to choose in AdWords?

Which strategy to choose in Google Ads

You need to decide which strategy to select in Google Ads based on certain data, and not randomly. Take into account not only the goals of advertising activity, but also the approaches used by competitors.

To improve recognition will help “Target position on the search page”, “Target percentage of wins”. If the goal is to attract the largest number of customers, you should use the “Maximum number of clicks”. The largest number of orders on the site can be achieved by applying other, more advanced strategic solutions.

Important! The strategy can be changed at any time, but you will have to wait 1-3 weeks to evaluate the result.

Regular analysis of subtotals allows you to achieve goals at a minimum of costs.

How to use aggressive bid management?

It usually takes some time to see results from changing an algorithm. However, there is a way to reduce the waiting time. For this:

  1. The bid is fixed at the level that is sufficient for the first position in the search results. Expensive clicks will help to collect more traffic and increase click-through rate. Within a few weeks, quality indicators will improve;
  2. The next step should be to lower the bids to the level of second place. As a result, a tangible reduction in the cost of clicks, while maintaining a high position and performance of the AC.

Hint! Google offers a convenient tool for predicting the cost of placement in the TOP for a specific query – Keyword Planner.

Сергей Шевченко
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