Free 2020 Guide To Google Ads Bidding Strategies

Published by Algorithmic Global on

Google Ads Bidding Strategies

We created a simple guide for determining which Google Ads bidding strategy to use.

Note that we divided this guide into two parts. For today’s post, we will walk you through three of the Google Ads bidding strategies and how to implement them to your campaign. 

The three bidding strategies we are going to cover are the following, Manual Cost Per Click, Target Cost Per Acquisition, and Target Return On Ad Spend.

Selecting the best Google Ads bidding type and implementing an optimized strategy for adjusting bids is essential to meet your business goals.

When creating a new campaign on Google Ads, Google will ask what type of bidding strategy you want to use, and the first thing you need to consider is whether you wish to use an automated or manual strategy.

Naturally, most people opt for an automated bidding strategy because nobody wants to adjust their bids daily, especially when managing multiple campaigns and accounts. However, depending on your goal, automating your bids may not be the best approach.

Screenshot of updated Google Ads bidding strategies
2020 Google Ads Bidding Strategies

2020 Google Ads Bidding Strategies Types

Whether you choose an automated or manual bidding strategy, one thing to remember is not to leave your account or campaign on auto-pilot.

Digital advertising specialists must keep tabs on the changes in the performance of an account as it can influence the bidding goals and overall costs.

Strategy #1: Manual Cost Per Click (Highest Control)

The manual cost per click is usually the most suitable bidding strategy for new advertisers as you have the most control over your budget.

Manual cost per click enables you to set bids at the ad group or keyword level. We advise that you set individual bids at the keyword level as it provides the highest level of control. On the other hand, ad group level manual bids place the same bid to all the keywords within that ad group.

Note: Keyword level bids will override ad group level bids.

Manual bidding is the best bidding strategy to use as you can keep a close eye on performance and ensure that none of your ads are overspending. 

2020 Google Ads Automated Bidding Strategies 

Strategy #2: Target Cost Per Action (CPA) 

Target CPA bidding strategy requires conversion tracking enabled in your Google Ads account. Without it, this bidding strategy is useless as it will never understand if it is driving conversions.

To calculate CPA, you divide the cost by the conversions. Google Ads

CPA bidding automates your bids to (total cost and number of conversions) equate your Cost Per Acquisition. Google Ads will set the bids and optimize it for the target CPA based on how likely the ad is to convert.

Manual bidding can achieve the same results by adjusting bids based on historical data, but this demands more work and some knowledge of the mathematics involved. Automating this can decrease workload, but as we mentioned, do not set things and forget it.

Strategy #3: Target Return On Ad Spend (ROAS)

To maximize results and give machine learning algorithms enough data to make informed bidding decisions, Google recommends that you have at least 50 conversions in the past 30 days.  

Similar to Target CPA, this strategy requires conversion tracking enabled in your Google Ads account. Return on ad spend (ROAS) will predict future conversion and conversion value performance based on your conversion tracking data. Google will then modify bids to maximize conversion value while attempting to achieve the Target ROAS goal you’ve set at the ad group, campaign, or account level.

Conclusion

Given its reach and authority, Google Ads should be a part of your paid strategy and we provided 5 reasons why you need to invest in Google Ads in our last post. Use the tips we covered to get started and remember to refine, and not to leave things on autopilot as you go. Look out for (part 2) of this guide. As always, if you have any questions, please leave a comment below, and we are more than happy to help.


2 Comments

Free 2020 Guide To Google Ads Bidding Strategies (Part 2) - · June 24, 2020 at 10:43 pm

[…] you missed the first part of this guide, click here.  The first part of this guide covered Manual CPC, Target CPA, and Target Return On As Spend […]

5 Important Google Ads Metrics You Should Monitor - · July 15, 2020 at 8:46 pm

[…] Biding: The bidding strategy may not work for your particular goal, or the bid itself is too […]

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