Inside Google Ads podcast: Episode 1 - Bidding

Maximize Conversions, Target ROAS, Manual CPC and so many more… Which bid strategy should you use in Google Ads?

Let's go Inside Google Ads to answer your burning questions about bidding.

I'm your host, Jyll Saskin Gales, bringing you more than a decade of Google Ads experience. I worked at Google for six years and now I'm a marketing coach, consultant, teacher, content creator, speaker, author and podcast host. I've worked with more than 10,000 Google Ads accounts, showing business owners and marketers how to make more money from paid ads, and now I'm here to do the same for you every week for free.

The way each episode works is this. I pick three of your burning questions to answer in detail from the hundreds of comments I receive on TikTok, YouTube, Instagram, LinkedIn, and Threads. You can find all those links in the show description, and if you want a chance to get your problem solved in a future episode, drop a comment on any of my social media.

And now to our first Google Ads question about bidding. Zack on TikTok asks, do you recommend running campaigns with a Maximize Conversions bid strategy and not fix an amount for CPC, or should the CPC be fixed?

So right off the bat, in most situations, I do recommend a Maximize Conversions bid strategy over Manual CPC.

What does that mean exactly?

A Manual CPC bid strategy means that you as an advertiser are telling Google the maximum amount you're willing to pay per click.

So if you - say that my CPC bid for keyword one is $3 and keyword two is $2. That tells Google I'm only willing to buy up to $3 per click on the first one and up to $2 per click on the second one. And remember, Google Ads works like an auction. So just as if you are bidding on an item on eBay, it doesn't mean you're going to have to pay $3, necessarily. It just means that that's the maximum amount you're willing to pay. And if other people bid, too, you're willing to go up to $3. But if the next bid hits $3.10, you lose. You're not willing to play anymore.

I don't recommend doing that in most circumstances, especially now, in 2024. I recommend Maximize Conversions as a great starting point for most campaigns.

That's because this is a Smart Bidding strategy, and that means that the Google Ads system is taking millions of signals into account. Not just the keyword, which is all you can really optimize for if you're manually bidding, but signals like what Google knows about the user, what device they’re on, the time of day, their internet browsing history, millions of things like that. And based on all of that, it's determining the best bid for every keyword, for every user, in every auction.

Something else to keep in mind is lower CPCs doesn't always mean better, because it's an auction. And so just like in an auction, the more desirable something is, the more expensive it is. So getting the cheapest clicks may bring you the cheapest, lowest quality traffic, which isn't necessarily a good thing, especially if what you're selling, you're making $50 or $100. Shouldn't you be willing to pay maybe $5 or $7 or $10 per click?

In the insurance industry, for example, CPCs can go as high as $100 or $150. Just for a click! I know that would be crazy for most businesses, but in an industry like that where they make thousands of dollars every single year from expensive insurance policies, it makes sense.

Now, if you have no conversions yet in your account, you could choose to start with Maximize Clicks, let the system learn a little bit, and then move on to Maximize Conversions. Maximize Clicks is not a Smart Bidding strategy. Some people prefer to start that way, but my personal preference is to just start with Maximize Conversions, as long as you do have some conversion history in your Google Ads account, and let the system learn from there.

If you have a brand new Google Ads account with no conversion history, maybe then starting on Max Clicks could be the right choice for you.

Now, a few exceptions to what I've just said. As we know, in marketing it's always, “it depends.”

If you have a very, very low budget, and I would define that as less than $20 per day per campaign, first of all, maybe you shouldn't advertise in the first place, but if that's the case - you have a super small budget - then one of these maximize bid strategies may not be the best choice for you. In that circumstance you may want to start with Manual CPC.

Other exceptions may be if you have a brand campaign and you want to advertise to people searching for your brand, that could potentially get quite expensive on Max Clicks or Maximize Conversions depending on if other people are bidding on your brand as well, so you may want to run that on Manual CPC. But again, most clients I work with see a lot of success putting their brand campaigns on Maximize Conversions.

And then finally, if you are running a competitor campaign, where you’re advertising when someone is searching for a competitor's name, that could be another situation where you may want to start on Manual CPC.

But for the most part, I recommend running campaigns on a Maximize Conversions bid strategy.

Last little advanced tip I'll share on this topic before we go to the next question. If you want a workaround to be able to use a Smart Bidding strategy, but also set a Max CPC, kind of have the best of both worlds, you can't do that within the campaign’s settings, itself, but you can do that by setting up what's called a Portfolio Bid Strategy.

You can do that by going to the Tools section of Google Ads, choose a Portfolio Bid Strategy, which is intended to put multiple campaigns under a shared Bid Strategy, and then add a Maximum CPC bid limit to that.

Again, I don't generally recommend doing this, but if you're someone who wants a little of column A and a little of column B, help yourself to that.

So in conclusion, Zach, thanks for your question. Do I recommend running campaigns with a Maximize Conversions bid strategy or a fixed CPC? The answer in the vast majority of use cases is I recommend Maximize Conversions.

Okay, by the way, you can receive a transcript of this episode in your inbox each week. So if you're on the go right now and you'd like these tips and tricks and suggestions for later, you can sign up for the Inside Google Ads newsletter on my website. The link for that is in the description with this episode.

Let's go to our second Google Ads question. Annabel on TikTok asks, even if the campaign is using Smart Bidding, do I still recommend using Phrase Match keywords?

This was in response to a video where I shared that, for most people just getting started with Google Ads, I do recommend Phrase Match keywords.

Should I do an episode all about keywords? Probably. So if you want to learn a little bit more about keyword match types, that is something we'll discuss another day.

But in a nutshell, Phrase Match is when you put quotation marks around your keywords. In theory, what that tells Google is, “I only want to advertise if the user's search contains this keyword.” In practice, that's not exactly how it works today, but we'll get into that for another day.

So to Annabel's question, do I still recommend Phrase Match, even with using Smart Bidding, or do I like to follow Google's recommendation to use Broad Match keywords with Smart Bidding?

Google will always recommend pairing Broad Match and Smart Bidding together, and for the vast majority of you listening to this, I will say, “Ignore.”

It's not that Google's wrong, it's just that Broad Match and Smart Bidding works well with larger budgets, more data… the things that most Google Ads advertisers don't hav

Phrase and Exact Match keywords also work well with Smart Bidding. Broad Match is absolutely not a requirement for Smart Bidding to work.

Now up until recently, my advice would always be - and this is actually the advice in the video Annabel responded to - to start with Phrase Match, and then move back to Exact or forward to Broad depending on campaign performance and your budget.

Because Exact Match works like Phrase now, and Phrase Match works like Broad now, I don't always say, “Start with Phrase” anymore. Sometimes I'll actually advise businesses to start with Exact Match, and then potentially expand from there.

At the end of the day, it has to do with your budget, whether you're new to Google Ads or have been running ads for a long time, demand for your keywords, etc. But Exact or Phrase, for most people, is where you'll want to start.

And so when we layer Smart Bidding on top of that, there are four different Smart Bidding strategies you can use that leverage Google's AI to optimize your campaign performance. Those are Maximize Conversions, Max Conversion Value, Target CPA, and Target ROAS.

Speaking of Target ROAS, our third Google Ads bidding question also comes from TikTok from Frostify.

Frostify asks, “Can you use Target ROAS with a low budget?”

Target ROAS is the most advanced bid strategy in Google Ads. So my short answer is: probably not. But let me give you the medium answer that goes along with that.

Before you're going to use a Smart Bidding strategy, the recommendation that Google gives, and that I agree with, is you want to have at least one conversion per day. If you're not getting at least one conversion a day, which means at least 30 conversions a month, there's just not going to be enough data there for the AI to learn and optimize for you. That's the recommendation for Maximize Conversions to work well, for Target CPA to work well, for Max Conversion Value to start to, maybe, work well.

But when you want to use Target ROAS, which is not optimizing just for getting you as much revenue as possible, but getting you the best return on ad spend (ROAS) possible, my recommendation is you probably want at least three conversions a day for a month, so at least 90 conversions a month.

And it's unlikely you're going to get that with a low budget. Maybe if you're tracking micro conversions like an add to cart, you might get that, But if we're talking actual purchases or actual leads or actual phone calls, are you going to be able to get three conversions a day consistently on a low budget? And again, I define a low budget as less than $20 a day.

I mean, for some industries, you might be lucky to get three clicks a day with a low budget. Nevermind, three conversions a day!

So if you have a lower budget, for most people, I recommend starting with Maximize Conversions.

But if you're on a differential revenue-based business, like ecommerce, where one person could spend $20, one person could spend $200, one person could spend $2,000, I recommend starting with Maximize Conversion Value as your bid strategy, or starting with Maximize Conversions and moving to Maximize Conversion Value.

And then if you're getting at least three conversions a day consistently, you can set that Target ROAS.

I recommend setting it at your current ROAS. Even if you want your current ROAS to be better, set it at your current ROAS, let that run for a week or two, maybe a bit longer if your budget's a bit lower. Make sure it stabilizes and is driving the performance you want, and then you can adjust your target in 25% increments.

So let's say you're starting with a Target ROAS of 200%, which means a Target ROAS of 2, which in plain English means you're telling Google, “For every dollar I spend on ads, I want to get two dollars back in revenue.”

Then, if you want to inch that ROAS higher, you could adjust it 25% higher, so move it 200% to 250%, moving up to a 2.5 ROAS. Let that run for a few weeks, and then if you want to squeeze higher, you can adjust it higher and higher.

Remember there's a trade-off here between reach and efficiency. So the more efficient your campaign is, the better your ROAS or the better your Target CPA, the less reach you're going to be able to get. So just keep that in mind that if you're really trying to eke out the highest ROAS possible, you're probably not going to be reaching that many new people.

We covered a lot of ground today about Google Ads bid strategies. If you need a refresher, or this is your first time learning about all the different Google Ads bid strategies, how they work, when you might like to use them, you should check out my newest course, Google Ads for Beginners. This is where I share short digestible lessons about foundational Google Ads concepts like bid strategies, keyword match types (we mentioned those earlier), ad creation, audience strategies, and more.

If you'd like to learn more about Google Ads for Beginners and whether it may be a good fit for you, you can go to learn.jyll.ca that's J-Y-L-L.ca, or click the link in the description with this episode.

I'm Jyll Saskin Gales and I'll see you next week Inside Google Ads.

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