Pay-per-click (PPC) advertising should be your go-to strategy if you want to get instant leads online. It is also a cost-effective technique as you only have to pay every time a user clicks your ad. But if you want to get the most out of your advertising budget, you need to learn how to bid more strategically.
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In Google Ads, you can bid on your target keywords depending on the amount you’re willing to pay for every ad click. That bid amount, together with your ad’s Quality Score and many other factors, determines when and how many times your ad appears on the Google network. Unlike traditional auctions, you don’t have to be the highest bidder to take an item home — or to land a good advertising spot on Google, in this case.
Besides bid amount, how you bid plays a huge part in getting your desired leads or conversions. You have to carefully think if it’s ideal for your account to bid based on impressions or clicks, or to bid manually or automatically.
Google Ads offers different bid strategies that suit various campaign goals. It is difficult, however, to choose one from all these strategy options. After all, each has its benefits and disadvantages.
Manual Bidding
Manual bidding is the most popular and basic bidding strategy. All you have to do is set a fixed amount for a certain keyword, and Google Ads does the rest. You can also manually modify your bids based on your campaign’s performance. While this strategy gives you complete control over your ad spending, it is not ideal if you’re a novice advertiser.
Setting a bid too high can result in overspending while setting it too low can result in zero clicks. There’s a fine line you must tread carefully to get the optimum results.
Plus, sometimes, there are too many keywords to bid on and to manage manually. In turn, you no longer have the time to perform other digital marketing techniques — and other equally important tasks you need to do to grow your business.
So, when does manual bidding work?
Manual bidding is an ideal strategy if you have an expert in-house PPC team or a third-party agency that runs your PPC campaign for you. Your team can use manual bidding to react quickly to marketplace trends. As such, you gain the competitive edge of beating advertisers who target the same keywords as yours.
Also, here are several tips to make your manual strategy work more effectively:
- Consider tiered bidding. With tiered bidding, you set different bid amounts to various keyword match types. For instance, assign higher bids on exact match terms as these are more likely to bring in relevant terms than “broad match” keywords.
- Don’t forget to click out of enhanced CPC option. During set up, Google Ads will automatically put your manual account on enhanced CPC option. Make sure to unclick that checkbox, unless you want to try this technique, which we’ll discuss further later.
- Get guidance on selecting a bid strategy. For manual bidders, Google recommends bidding strategies through the “get guidance selecting a bid strategy” link. We’re not saying you should choose that strategy, but it may give you a helpful point of reference.
- Automatic Bidding
With automated bidding, Google Ads optimizes your bids for you. All that is left for you to do is to set your daily campaign budget. Depending on that budget, Google will increase or lower your bids to get the most ad clicks.
This bidding technique is a great choice, whether you’re a beginner or an advanced user. It allows you to take advantage of Google’s data to set your maximum cost per click (CPC) automatically. But, we won’t be surprised if you feel anxious about using this option. After all, it can raise your CPC and max out your ad budget earlier than expected.
So, how can you make your automated bidding work more efficiently? Here are a few tips:
- Remember That One Size Doesn’t Fit All
It’s tempting to apply automated bidding to all your campaigns. But sometimes, one campaign may do well with automatic CPC, while others may produce better results using other bidding techniques. Feel free to mix automated bidding with other strategies.
- Set up Conversion Tracking
As mentioned, Google will control your bids depending on your daily campaign budget and relevant data. You should know that that data comes from conversion tracking, so setting this up is a must.
- Don’t ‘Set and Forget’
While Google Ads does most of the work for you in automated bidding, you still need to monitor your account. For one, you might want to adjust your daily campaign budget if you feel that you’re burning through your budget rather quickly. Also, you may have to switch to manual bidding if you notice that the automatic CPC option does not yield the results you desire after a week or two.
Portfolio Bidding Strategy
The Portfolio Bidding Strategy (PBS) is an updated version of automated bidding. Consider this option when your Google Ads account reaches a certain size that it becomes difficult to stay on top of multiple bids. With PBS, all you have to do is determine performance and efficiency goals, and Google Ads will automatically set amounts based on those parameters.
How does PBS set the bids automatically?
PBS is driven by machine learning, calculating and updating bids based on real-time and historical data. It keeps your bids optimized to make sure the account achieves your pre-set goals. More importantly, it works accurately and consistently, making it more reliable than manual bidding in large accounts.
However, applying the PBS strategy to your account means you have to set a common CPA goal across different campaigns and ad groups. This technique makes sense for some advertisers but can be problematic for others.
Say, you own a boutique that offers a variety of products. Your CPA for a pair of sunglasses is probably lower than for a pair of leather shoes, for instance. After all, these items don’t have similar inventory costs and are of different value to your business. It doesn’t make sense that you set one CPA goal for these items.
On the other hand, if you’re working on a large Google Ads account to advertise services with similar business value, then using a PBS bidding strategy is a smart move.
Enhanced CPC
Like automated bidding, the enhanced cost per click option automatically tweaks your bids — but only within the campaign parameters you have set. With this strategy, Google Ads uses its historical data to determine which targeted keywords are more likely to convert and increase bids on those keywords, accordingly. This technique also works in reverse, lowering your bid amounts if the data suggests that certain keywords won’t do you much good.
The calculations made by Google Ads may likely be more accurate than those produced by a person. In a way, enhanced CPC helps you find that sweet spot between overbidding and underbidding.
But, is there a disadvantage to using the enhanced CPC strategy?
To date, enhanced CPC doesn’t take your device segments into account. If you run campaigns for your target mobile consumers, you will still need to manage your bid on that device segment separately.
Also, enhanced CPC can put you at a disadvantage if your business is part of a niche industry that doesn’t have enough online marketing data. Remember, Google Ads uses historical data with this strategy. It’s worth giving enhanced CPC a go if you’re in e-commerce or other popular industries. Otherwise, you may have to go back to automatic bidding or try other strategies.
CPA Bidding
If you want to improve your PPC campaigns solely for conversions, then cost per action or CPA bidding is the strategy for you. With CPA bidding, Google Ads banks on your historical click data. So, to activate this strategy, you need at least 15 conversions over a span of 30 days. This way, Google Ads has enough data to work with and to give you the recommended bid amount.
Some conversions will be above the suggested CPA and others will be below it. Google Ads states, however, that if you have set up your tracking correctly, you can achieve the CPA target after a week or so. But, take note that this strategy is most effective if you have a static CPA target for all keywords within an ad group.
But, what’s the weakness of CPA bidding?
This bidding option won’t work if you have any daily budget caps in place. Sure, it will yield conversions within your target parameters, but there’s a chance of spending much more than you anticipate as you can’t set a daily budget for your campaign.
Additionally, if you desire immediate results from the CPA bidding strategy, you may be slightly disappointed. For smaller accounts or newer campaigns, this bidding option’s effectiveness depends on the volume and quality of data it has to work with. Again, the more conversion tracking data you have, the more effective this strategy will be. As such, new campaigns may struggle to find immediate success with CPA bidding.
CPM Bidding
CPM means cost per mile or cost per thousand impressions in pay-per-click advertising. And bidding based on this helps advertisers whose primary goal is to increase the number of impressions of their ads.
You gain an impression when a user sees your ad on a network — and it doesn’t matter if they click it or not. If your advertising campaign is focused on brand awareness and you want as many people as possible to see your message, then CPM bidding is a good strategy to use.
In CPM bidding, your bid is based on the maximum amount you are willing to pay per 1000 impressions. It is a cost-effective way to make sure that your ad is visible, as efficiently as possible, to as many users as possible. Plus, you’re one step ahead if you’re up against advertisers whose targets are based around clicks or conversions. Your ads will likely frequently pop up above these advertisers’ ads because clicks are not your priority.
Is focusing on impressions enough?
These days, it is seldom that companies focus on brand awareness alone, with conversion or performance taking a back seat. If you choose to home in on brand awareness only, you may be missing valuable website traffic.
Also, you must consider the difference between an impression and an ad view. An impression indicates that your ad has appeared on a page somewhere, so users potentially have seen it. The operative word here, though, is “potentially.” Meaning, you won’t know for sure if users read your ad or simply glossed over it.
But, CPM is a great strategy if you already have terrific converting ads. Switch to CPM bidding, and you’ll no longer have to pay for every click on your ads. Instead, you’ll be charged a fixed fee per thousand impressions — even if half of those have turned to clicks or conversions. In turn, you lower your average conversion cost dramatically.
So, Which is the Best Bidding Strategy to Use?
Comparing different bidding strategies, you probably figured by now that the best strategy to use is one that suits your advertising goals, data, account structures, and workforce. And as with other digital marketing techniques, running Google Ads campaigns requires testing.
Determine your goals and take a good look at your account. From there, pick a bidding strategy that best matches those factors. Don’t forget all the strengths and weaknesses of each strategy we have discussed today; use them as a guide in narrowing your options.
Run the chosen strategy and wait a week or two to see results. If it works, build on that bidding option to improve your Google Ads game even further. Otherwise, pick out another strategy to try, one that also fits your goals and parameters.
And if you need an expert team to step in and handle your Google Ads accounts for you, we’re here to help. Our PPC team in Virginia knows the ins and outs of ad bidding and spending. We are up-to-date with the latest PPC trends, and our team uses industry-proven techniques to keep your ads optimized.
In other words, our team will take all the grunt work off your hands. This way, you can focus more on growing your business and attending to all the new leads we produce for you.
Schedule an appointment today to know more.
