What Are Bid Strategies?

Ten years ago, Google presented bid strategies to me and my team. I thought it was another one of their bells and whistles that wouldn’t go anywhere. At first, the bid strategies were on par with manual CPC bidding, but they quickly surpassed that practice. Simply put, Bid strategies allow the machine to control the amount you will pay for a click. You can still control your daily budgets along with the target of the CPA or ROAS that you want that campaign to achieve.

Google aggressively promotes smart or automated bidding in the market. As a practitioner with more than 14 years of experience working with these systems, I’ll explain how they actually behave and how they should be used. Below is an abbreviated excerpt from Google itself:

One of the most significant caveats is that we, as the user, lose control. Therefore, we have to be very diligent about analysing the machine. Plus, we have to keep a healthy skepticism about Google’s intentions. If your auction has twenty-plus competitors, I always tell my clients that you have twenty Google Ads bid strategies optimising at once. The question I ask—and never get an answer to—is, do the bid strategies of competing accounts communicate with each other? Or share signals? Google won’t say, but we’re not here to postulate; we’re discussing the nitty gritty of Bid Strategies.

There are numerous bid strategies available, but for brevity, I will touch on the top four I use most in the next section.

How to use bid strategies

These are only the top four I use the most.

You want to save money by not paying for an Account manager to set up your Google Ads account. Where do you begin? I’ll show you how here.

1. Manual CPC. While Google is pushing us away from manual bid strategies, they still have a firm place in every search account. (Or they should.) Note: you cannot use Manual CPC on PMAX campaigns.

Let’s start with the Brand Use case. I have found that every time I want to see how many impressions and clicks my clients accounts get, Google always sends warnings and notifications to go to smart bidding. Well, I have tested this on over thirty plus clients and I have only had success with about a quarter of them. You want your bids to be low on your brand and Manual CPC achieves that. Give this a shot across competitor campaigns as well.

Next is a brand-new standard SEM campaign. When setting up a new search campaign, I recommend using Manual CPC. This way you can get a benchmark for your CPC’s and the lost impression share due to budget is for that campaign. Only upgrade to maximize conversions when you have hit at least 30 conversions in 30 days or whichever comes first. You need that data for smart bidding. If smart bidding doesn’t have enough data, it won’t work correctly.

Finally, if your auction is enduring a bidding war, I suggest trialling one campaign on manual CPC to try and find keywords that don’t have exorbitant price tags.

If you don’t track conversions or your conversion tracking is broken. Switch the impacted campaign over before the automated bid strategies jack up the CPCs because they can’t find conversions.

2. Maximise clicks. Use this bid strategy if you don’t have conversion goal targets for a specific campaign. This can also be used instead of Manual CPC for new SEM campaigns. Note: this bid strategy is not available for PMAX campaigns.

Use Maximise clicks if your conversion tracking is broken. You can add in a bid limit, but I have found that this limits performance on this bid strategy. Give Maximise clicks a shot on brand campaigns and competitor campaigns.

Note:

Google will constantly recommend switching bid strategies. Ignore this advice, as it can often damage your performance. When Google flags your campaign as limited by budget, only take this as a guide. You don’t have to meet their budget increase recommendations for the same reason as above.

3. Maximize conversions. This is the go-to bid strategy for lead-generation clients or businesses that want Phone calls. It is also used in Performance MAX. I recommend using this bid strategy at the start of any new PMAX lead-gen campaign. If your standard SEM campaign struggles to get 30 conversions or 30 conversions in 30 days, stick with Maximize conversions.

If your campaign achieved above 30 conversions in 30 days and hit 50 and above, I recommend that you apply a Target CPA. Below is a guide for setting a Target CPA:

I advise setting a higher CPA target at the start so you don’t throttle the performance. Give the target a 20% buffer than the actual achieved. This way, it has room to learn and improve. But I want a better CPA, not a higher one, I hear you say. Read below for what happens if you go too low.

Lower CPA target than actual—tempting. But I don’t recommend doing this at the end of the first 30 days because it can throttle performance. Use this sparingly, and don’t go any lower than 5% of the actual CPA. If you do anything lower, you risk your ads not serving due to a constrained bid strategy. If you are tight on budget, then consider this approach. But, it will lead to you losing a lot of impression share.

4. Maximise conversion value. This is the go-to bid strategy for e-commerce clients or businesses that assign value to their leads in Google Ads. I recommend using this bid strategy at the start of any new PMAX e-commerce campaign. If your campaign achieved more than 30 conversions in 30 days and hit 50 and above, I recommend that you apply a Target ROAS. Below is a guide for setting a Target ROAS:

Lower ROAS target than actual. I can hear you think, are you trying to ruin my campaign? No, I advise setting a lower ROAS target at the start so you don’t throttle the performance. Give the target a 20% buffer than the actual achieved. This way, it has room to learn and improve.

Higher ROAS target than actual. More temptation. I don’t recommend doing this at the end of the first 30 days because it can throttle performance. Use this sparingly, and don’t go any lower than 5% of the actual ROAS. If you get any higher, you risk your ads not serving due to a constrained bid strategy. If you are tight on budget, then you could consider this approach.

How Often do you edit Bid Strategies?

I call this the 50/30 principle.

Changing the bid strategy after one week of going live can be tempting. However, this is a big mistake if you don’t have a high-converting campaign. Bid strategies need time to test and learn. The change frequency depends on the campaign’s volume of clicks and conversions. Below is an observation time frame to help you decide how long to wait before optimizing. Remember, optimization can be anything from changing the target CPA to changing the campaign budgets.

Conversion Volume per Strategy	Observation time frame
< 30 conversions in 30 days.	Four weeks
30 – 60 conversions in 30 days	Three weeks
60-100 conversions in 30 days	Two weeks
100> conversions in 30 days	One week