A Guide to Google AdWords Paid Search Bidding Strategies

It’s known that search marketing is a key tactic to generate conversions on the Internet as prospects are typically “bottom-funnel” or actively looking for a product or solution.   Optimizing campaigns to reach your ROI goals is an ongoing process, as your Google AdWords consultant should be looking at a variety of variables; some of which I wrote about earlier.

One of the most important optimizations is bidding strategy, of which there are many to pick from depending on your business goals.  Most common is to grow your conversion rates, and reduce your cost-per-conversion.  Understanding all the bid strategies offered by AdWords as well as the adjustment options is integral, and we consistently keep an eye on where we can refine and tweak.

First you need to consider campaign goals.

  • If you goal is website conversions, it’s usually best to allow Google to optimize your bids with Smart Bidding (below),
  • If your goal is purely traffic, focusing on clicks is the way to go, and cost-per-click (CPC) bidding may be right for your campaign.
  • If you want to increase brand awareness, focusing on impressions might be an option. You can use cost per thousand viewable impressions (vCPM) bidding to put your message in front of customers.

Here’s an overview of paid search bidding strategies:

  • Manual Cost Per Click (CPC)

Self-explanatory; this strategy gives you total control over your keyword bids but does take more effort to optimize campaigns.

  • Maximize Clicks

This is the simplest way to bid for clicks. Set a daily budget, and AdWords automatically manages your bids to bring you the most clicks possible within your defined budget.

  • Enhanced Cost Per Click (CPC)

Enhanced CPC (ECPC) is a bidding strategy that offers Google the freedom to increase or decrease your bids based on historical conversion data.  The system aims to keep within your overall daily budget and max CPC over time, reducing the chance for significant overspending.  (This is actually a Smart Bidding strategy now).

Smart Bidding to Optimize Conversions

Smart Bidding is a set of automated bid strategies that uses machine learning to optimize for conversions in every auction. It factors in a wide range of auction-time signals such as device, location, time of day, language, and operating system to best optimize the chance of a conversion for every search.

Below are Smart Bidding strategies available.

  • Target CPA (cost-per-acquisition)

If you want to optimize for conversions, you can use Target CPA to help increase conversions while targeting a specific cost-per-acquisition (CPA).

  • Target ROAS (return-on-ad-spend):

If you want to optimize for the value of a conversion, use Target ROAS to help increase conversion value while targeting a specific return-on-ad-spend (ROAS).

  • Maximize Conversions

If you want to optimize for conversions pure and simple without targeting a goal CPA, use this strategy.

Currently only maximize clicks, eCPC and target ROAS are available for Google Shopping campaigns.  Additionally, to maximize results and give machine learning algorithms enough data to make informed bidding decisions, Google recommend that advertisers have at least 30 conversions in the past 30 days before using Target CPA. They also recommend 50 conversions in the past 30 days for Target ROAS.

Once a bid strategy is chosen on Google AdWords, all those ongoing bid adjustments can occur.  Bear in mind that when adjustments are made, your provider should keep track of when these changes occur, so results of the adjustments can be analyzed for performance. Bid adjustments are a manually set of percentage changes that allow you to increase or decrease CPC weight from the maximize CPC bid first set. This provides you greater control of when, where and to whom ads show, enabling better targeting of segments based on their likelihood of converting.

Here’s a cross-section of the more common bidding adjustments:

  • Search Page Location. More of a bid strategy, but you can have Google adjust bids to ensure that your ads appear at the top of search results, or first page of search results.
  • Outranking Share. Have a competitor you want to bid against more consistently?  AdWords gives you an option to outbid one key competitor, and you can set how often.
  • Bid higher for certain geos that generate higher conversion rates, and low bid lesser geographies deemed not as important.
  • This is how you can bid higher for mobile to insure positive ad rank on mobile devices. Although Google suggest bid adjustments within a campaign, we at NuSpark separate mobile and computer-based campaigns for many clients. Then, we can give mobile and computer targeted campaigns their own budgets.  And, keywords in mobile-only campaigns can be bid low, then use the +100% mobile bid adjustment to keep bids in line without overpaying.
  • Ad Scheduling. If your business sees higher conversion rates during certain days or hours of the week, give these high conversion areas a small bid increase to insure your ad rank is optimized.
  • Remarketing Lists. Audiences who have been to your website and then later do another search have more value as these audiences may be closer to lead generation or purchase. Give these audiences a moderate bid adjustment (i.e. 25%)
  • Age and Gender. Google AdWords does allow you to make adjustments on demographics.  If your business generates higher conversion rates pending age and sex, make bidding adjustments here when necessary; again 25% increase is ideal.

Google AdWords provides a number of bidding strategies and adjustments to experiment with to optimize performance.  Continue to test and refine. Google has a campaign experiment feature as one option to test strategies.  If you need help with your own AdWords campaigns, do not hesitate to contact us and we’ll provide some recommendations.





About Paul Mosenson

NuSpark Marketing Founder, Chief Lead Generation Strategist and Online Media Director An experienced B2B and B2C marketer, Paul has been helping clients generate leads and grow their businesses for over 25 years. Paul helps plan and optimize marketing and lead generation programs.