Google Ads Bidding Strategies Google Ads is famous for its wide variety of ad optimization options. Starting from targeting flexibility, ad types, and no less important is the bid strategy. This article will cover the 6 most used Google Ads bid strategies and how to optimize them.
Discussing Digital Ads is always incomplete without discussing bid strategies. Yes, bid strategy is also a major factor in the effectiveness of Digital Ads.
Of the many digital advertising platforms, Google Ads is the type that has the most bidding strategies. There are more than 10 bid strategies for different types of advertising in Google Ads, and here we will discuss the main 6 types that are used the most.
However, before discussing the 6 Google Ads bid strategies, we first understand what Bidding and Auction are in digital advertising.
What is Bidding and Auction?
a. Meaning of Digital Ad Bidding
Strategy Bidding is a signal in the form of a bid strategy that is given to the Digital Ads algorithm in spending the daily budget from advertisements placed by an advertiser.
There are 2 types of bidding strategies, some are unlimited and some are regulated within certain limits:
- No Limits, meaning that the algorithm can freely spend the budget you use without any notification, and will risk the effectiveness of the cost ratio of the results to be achieved if in the beginning you don’t set the strategy.
- With Limits, it means that the algorithm cannot arbitrarily spend the budget because there are certain limits that are set before the ad is shown. This bid strategy is also risky because it limits ad serving and even results in no ads showing at all. However, back to what you set the strategy.
b. The Meaning of Bidding in Digital Advertising
Unlike bidding, Auction is a paid marketing method that “Auctions Ad Slots” to advertisers in which they act as bidders.
With the auction process, it will be determined which ads should be served and sorted by ranking among all ads. The ad with the highest ranking will get the top position.
Auction strategy happens every time people do a search on Google. Ads that are eligible to serve will be directly included in the strategy.
However, due to limited ad slots, not all ads will participate in the auction process can appear in Google search results.
Analogy of Bidding & Auction Strategies in Google Ads Ads
When you type a keyword in the Google search engine, you will find some of the top results with the label “Ads” near the title.
The content that has the label “Ads” is one example of the implementation of Google Ads. In short, this is a paid facility so that your content is successfully ranked on the first page of Google and will potentially be clicked by more visitors.
To advertise on Google, you must know how your potential customers are using keywords. You will use these keywords as one of the media when advertising on the Google Ads platform.
Even if you have started advertising on Google, your business ads will not immediately appear on the first line as described earlier. Why is that?
The reason is because every day Google also receives many requests to advertise. So, one way that you can get the top position you have to compete with other advertisers is by winning bidding during the ad auction (Auction).
In short, this strategy is a budget that you will spend to put your content as an ad on the first page of the Google search engine.
In its development, Google Ads continues to update all of these bid strategies. Some are deleted, and some are combined. You must always update the changes made by Google if you want to use Google Ads as an advertising channel.
While there are many bid strategies you can choose from, generally only 6 are used the most. While the others you can use if you really understand the opportunities and risks.
Here are the 6 main types of Google Ads bid strategies that are most often used:
1. Maximize Clicks
This bid strategy is automated based on a set daily budget. Maximize Clicks means that you allow Google Ads to serve ads to audiences who are more likely to click on your ads, no matter what their intentions are.
This bidding strategy is often misinterpreted to get as many closings as possible, with the assumption that the more people who come, the more people who buy.
Whereas in reality everyone who visits does not always have the intention to buy. This strategy is therefore not suitable for ads aimed at getting conversions.
However, this strategy will be the right option if you have a limited budget or keywords with a limited number of monthly searches in an ad campaign that is run.
In addition, this strategy is suitable if you use it for Awareness, where you can get visitor data and they can read more information on the website. After that you can do Remarketing or Retargeting in the next campaign.
2. Enhanced CPC (ECPC)
Enhanced CPC is a strategy derived from Manual CPC, where this strategy is a mixture of Manual & Smart Bidding.
Google will increase or decrease your bid amount based on the likelihood of achieving the desired goal, but still within the set limit.
Enhanced CPC is perfect for controlling CPC (Cost Per Click) metrics because you can set a maximum budget limit.
However, this strategy is generally less effective especially for advanced campaigns. Considering you have to control manually, while there are many campaigns.
3. Maximize Conversions
Maximize Conversions is an advanced strategy from Maximize Clicks, and is also very simple. Google will focus your entire budget indefinitely to get as many conversions as possible.
This strategy is very suitable to get the maximum potential from the value of the average acquisition cost. But keep in mind that even if you get 0, Google will continue to spend your budget until you stop it.
This is one of the weaknesses of the Maximize Conversions strategy, where you have to really pay attention to the ad configuration so that the budget is not wasted.
4. Target CPA (Cost Per Action)
If Maximize Conversions is useful for getting as many conversions as possible, then Target CPA serves to get conversions with a certain limit.
The target CPA is filled with the nominal acquisition cost desired by the advertiser. For example, if the CPA is filled with Rp. 10,000, then Google will balance so that the average cost per conversion obtained does not exceed Rp. 10,000.
In advanced campaigns, target CPA is the most frequently used type of bid strategy to optimize conversions even further.
5. Target ROAS (Return On Ad Spend)
If Target CPA allows you to get as many conversions as possible with a certain acquisition cost limit, then Target ROAS serves to get the largest conversion value according to the ROAS value specified in percentage.
Maximize Conversion Value
In 2021, Google is making changes by incorporating this bid strategy into its Maximize Conversion Value.
This bid strategy using Target ROAS requires a bit of math.formula is:
Sales / Ad Spend x 100% = Target ROAS
For example, if you want to earn IDR 100,000 from every IDR 25,000 you pay, then:
100,000 / 25,000 x 100% = 400% Target ROAS
The bottom line, if you want to determine ROAS, for example, is 4x, then Google will try to make your campaign generate that much return. For every 1 rupiah you pay, you will get 4 rupiah.
This ROAS strategy is a bid strategy that is most often used by E-commerce websites because its function is appropriate to get as much return as possible.
Be careful in setting ROAS too high, the risk is that your ad may not appear at all.
In order to use the Target CPA and Target ROAS strategies, you must set a complete Conversion Tag with its various parameters.
6. Target CPM/Viewable CPM (Cost per Mille / per 1,000 Impressions)
Lastly is Target CPM, which is a bidding strategy that can set a limit on the cost you pay for every 1,000 impressions of the ad served.
You can use target CPM in Awareness as well as advertisements on TV, where you want the ad to be seen by as many people as possible within a certain cost limit.
Target CPM is only available on visually based campaigns like Google Display Network or YouTube Ads.
What are the Benefits of Advertising Using Bidding and Auction Strategies in Google Ads?
• Increase Awareness
The first benefit is that you are able to increase awareness, which is a key to success for your business. Without awareness, you will have difficulty getting potential customers.
• Optimization of Audience Intentions
The second benefit by advertising using these two strategies, then you are able to optimize and adjust the intentions of your potential customers.
By knowing the right keywords, you can at the same time find out what the intentions of your potential customers are. For example, you can find out if your potential customer wants a purchase, tutorial, review, or just information.
• Reducing Fish Budget so It’s More Efficient
The third benefit that you will get is that you can reduce your advertising budget. Because by implementing the right strategy, you can get the best ads without having to spend a bigger budget.
So the benefits you will get are very large compared to if you do not use advertising strategies at all.
• Get Fast Advertising Results
The next benefit is that you are able to get results from advertising more quickly and instantly, of course, by optimizing the keywords you use.
As discussed earlier, choosing the right keywords can make many potential customers come to visit your business website.
This is certainly very beneficial for you as a business owner. Gives you the opportunity to get a bigger profit. Moreover, almost everyone uses Google every day.
• Implementing a Remarketing Strategy
The last benefit that you can feel as a business owner who advertises using these two strategies is remarketing. Remarketing means that you, as a business owner, can reach back to your previous customers.
This is the key to the success of a business. Not just getting new customers, but your old customers will repeat orders or known as repeat orders.
Keep in mind that not all bid strategies selected will suit the various Goals and objectives of the campaign being run.
Choose a bid strategy that matches the goals and objectives of your ad so that Google’s algorithm can adjust the budget you apply to the results you want to achieve.