Google Ads Bidding Strategies : A Guide for Marketing Campaigns [2022]

Google Ads offers several different bidding strategies for advertising campaigns. They include manual, automated and smart bidding strategies.

The type of bidding strategy you select for your Google Ads marketing campaign will depend on your marketing goals and type of campaign.

This post explain the different bidding strategies that are available in 2022 and how to select the right bidding strategy for your Google Ads marketing campaign.

How does Google Ads bidding work?

Google Ads is very competitive. When a user makes a search query on Google, Google Ads runs an auction to determine which ads to show for that search query. The auction is also used to determine the ad positions on Google search results, and whether the ads are eligible to be shown at all. Your bid enters you into the auction.

The ad auction is repeated for every search query. Considering that there are 40,000 search queries per second on Google, that is a lot of auctions that run automatically in a split-second!

This is a summary of the Google Ads auction process:

  • When there is a search query, the Google Ads system finds all the eligible ads whose keywords match the search term.
  • The Ads are then ranked based on their Ad Rank and their Quality Score. The factors that are considered for ranking include the maximum CPC bid, ad quality, search context, ad rank thresholds and ad formats.
  • Ad Rank and Quality Score are very important factors in the Google Ads auction. In addition to ad eligibility and ad position, they also determine the CPC (cost-per-click) the advertiser is charged, whether ad extensions are shown with the ads, and how often the ads are shown.
  • Ads that do not meet the minimum Ad Rank and Ad quality thresholds are not shown on Google.
  • This ad auction is repeated for every search query.

What is a bidding strategy?

A bidding strategy is a Google Ads campaign strategy that helps you achieve specific marketing goals for your business. This could include an increase in clicks, conversions or impressions that align with your marketing goals.

What are the types of Google Ads bidding strategies?

Google Ads has several different types of manual and automated bidding strategies to meet your marketing goals. These strategies are constantly changed and updated by Google.

What is Manual Bidding?

Manual bidding allows you to set the maximum CPC (cost-per-click) bids for your ads.
With manual bidding,

  • You can set the maximum CPC bid at the keyword or ad group level.
  • The maximum CPC is the most you are charged for a click on your ad.
  • The actual CPC you are charged will depend on the Ad Rank and Quality Score of your ads.
  • Using manual bidding provides the most control over bids, but takes the most time.
  • Manual bidding is recommended for new accounts and new advertisers.

What is Automated Bidding?

With automated bidding, the Google Ads system automatically sets the bids for your ads based on the likelihood of a click or conversion that will align with your marketing goals.

  • With automated bidding, you do not need to manually set bids for each keyword or ad group.
  • There are different automated bidding strategies that are based on your goals to help you increase clicks, conversions or visibility.
  • Automated bidding takes into account the past performance of previous campaigns.

What is Smart Bidding?

Smart bidding is a type of automated bidding that uses machine learning to optimize for conversions or conversion value in every auction. It is called auction-time bidding.

  • Smart bidding includes different bid strategies to align with business goals.
  • It uses advanced machine learning to optimize bids for every auction.
  • It evaluates auction-time signals to determine the search context including device, location, time of day, browser, language and operating system to set bids.
  • You can use smart bidding for a single campaign or multiple campaigns as in a portfolio bid strategy.

Google Ads bidding strategies based on goals

Each Google Ads bidding strategy is tailored to different advertising goals and types of campaigns.

The different types of Google Ads campaigns include Search, Performance Max, Display, Shopping, Video and Discovery.

You should consider your goals and campaign type when selecting which bidding strategy to use.

Google Ads Bidding Strategies Flowchart

Google Ads Bidding Strategies Flowchart

  • To focus on conversions on your website, and if you have conversion tracking enabled, use Smart Bidding.
  • To increase traffic to your website, and focus on clicks, use Cost-per-Click (CPC) bidding.
  • To increase brand awareness, and focus on impressions, use cost-per-thousand viewable impressions (vCPM) bidding.
  • For video ads, to increase views and ads interactions, use cost-per-view (CPV) or cost-per-thousand (CPM) bidding.
  • For video ads, to increase brand consideration, use cost-per–view (CPV) bidding.

Use Smart Bidding to focus on conversions

To focus on increasing conversions and conversion value in your Google Ads campaign, use Smart Bidding strategies. Some of these smart bidding strategies have changed in July 2022 for Search campaigns only.

The Smart Bidding Strategies now include:

  1. Maximize conversions

    This bidding strategy automatically sets bids to get the maximum conversions in your campaign within your budget. Maximize conversions will fully spend your average daily budget, and can greatly increase spending.

    This bidding strategy can be used within a set budget or with a Target CPA setting.

    In July 2022, the standard Search Target Cost Per Action (CPA) bidding strategy was renamed Maximize Conversions. An optional field is now available in the Maximize Conversions bidding strategy to set a target cost-per-action (CPA) or average cost per conversion. The Google Ads system will automatically set bids for you to get as many conversions as possible at your target CPA. Some conversions may cost more than your target CPA. You will need to set up conversion tracking before using Target CPA.

  2. Maximize Conversions Bidding Strategy in Google Ads

    Maximize Conversions Bidding Strategy

  3. Maximize conversion value

    This strategy helps you maximize the total conversion value of your campaign within your budget. You set the value you want to maximize when you set up conversion tracking.

    This bidding strategy can be used with a set budget or with a Target ROAS setting.

    In July 2022, the standard Search Target return on ad spend (ROAS) was renamed Maximize Conversion Value. An optional field is now available under Maximize Conversion Value to set a target return on ad spend(ROAS). This smart bidding strategy will analyze and determine if there is a likelihood of conversion for each related search query. Then it will adjust the bids for these searches to maximize the conversion value to achieve your target ROAS.

    Target ROAS percentage = (conversion value/ad spend) x 100%

    To use the Maximize Conversion value strategy, you will first need to set values for your tracked conversions.

  4. Google Ads Maximize Conversion Value Bidding Strategy

    Maximize Conversion Value Bidding Strategy

  5. Enhanced Cost Per Click (ECPC)

    ECPC is an optional feature available to use with Manual CPC bidding. It automatically adjusts manual CPC bids for clicks that might result in a conversion. It will try to maintain the average CPC below the maximum CPC you set when maximizing conversions. You will need to set up conversion tracking to use ECPC with Search campaigns.

Use CPC bidding to focus on clicks

To generate traffic to your website by increasing clicks from your ads, there are 2 Cost-Per-Click bidding strategies to consider.

  1. Maximize Clicks

    Maximize Clicks is an automated bidding strategy. You set an average daily budget, and the Google Ads system will manage your bids to get the most clicks within your budget. You can set a maximum CPC value with Maximize Clicks bidding to control the maximum amount you are willing to pay for each click.

  2. Google Ads Maximize Clicks Bidding Strategy

    Maximize Clicks Bidding Strategy

  3. Manual CPC

    Manual CPC lets you manage your bids manually. You can set individual maximum CPC bids for each keyword or ad group in your Google Ads campaign. You can increase the bids for high-performing keywords. The max CPC is the maximum you will be charged for a click on your ad, though you may pay less depending on the actual CPC. The actual CPC is determined by the Ad Rank and Quality Score. Your Ad Rank is also determined by your max CPC bid and the quality of your ads.

Bidding strategies to focus on visibility

If you want to increase brand visibility with a branding campaign on Google Ads, there are 4 bidding strategies to consider.

  1. Target Impression Share

    This bidding strategy is useful for campaigns with brand terms or to increase brand awareness. This strategy automatically sets bids to show your ads at a specific position on the search results page such as the absolute top of page, top of page or anywhere on page. Bids are automatically set to show your ads at these placements. You can set a Max CPC bid limit to set the maximum amount you are willing to pay for an ad click. Impression share is available on the Search network only (excluding search partners).

  2. Google Ads Bidding Strategy: Target Impression Share

    Target Impression Share Bidding Strategy

  3. CPM

    This bid strategy will charge you based on the number of times your ads are shown, or number of impressions, on the Google Display Network or on YouTube. This strategy can also be used for video ads.

  4. tCPM

    With this bid strategy, you set an average cost of how much you are willing to pay for 1000 impressions of your ad. The Google Ads system will automatically optimize your bids to maximize the reach of your campaign. This strategy is available for video campaigns.

  5. vCPM

    vCPM is a manual bidding strategy that you can use to increase brand awareness. You can set the maximum amount you want to pay for 1000 viewable ad impressions on the Google Display network.

For video ads, bidding strategies focused on views or impressions

  • CPV bidding

    For video ads, you can use CPV bidding if your campaign objectives are product and brand consideration, or brand awareness and reach.

    With CPV bidding, you pay for video views and video interactions such as clicks. A view is counted when someone watches 30 seconds of the video ad, or the actual duration if ads are shorter than 30 seconds, or clicks on the ad.

    You can set the highest price you want to pay for a view, the max CPV bid. The max CPV bid will apply to all the ads in your ad group. The max CPV bid will determine your ad’s chances of being shown to viewers. The actual CPV you pay may be less and will depend on your Ad Rank and Quality Score.

Conclusion

Google Ads offers many different types of bidding strategies including manual, automated and smart bidding for your advertising campaign.

The bidding strategy you select should align with your marketing goals, and the type of advertising campaign that you are running. Once your campaign is running, your Google Ads account will provide lots of information and reports on campaign performance including clicks, conversions, bids and bid strategies.

We hope you found this article helpful. If you need help with running a Google Ads advertising campaign for your business, we can help.

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  3. Tanuja Mahdavi, Moz, Responsive Search Ads: 5 Best Practices for Google Ads PPC Search Campaigns
  4. Gold Mango design, What is Google Ads PPC Marketing and How it Helps Your Business
  5. Gold Mango Design, 8 Benefits of Google Ads Advertising

Need Help With Google Ads?

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