Inside Google Ads podcast: Episode 77 - Every Bid Strategy Explained
There are a ton of different bid strategies to choose from in Google Ads, and they're constantly changing. Today, we're going to cover every single bid strategy in Google Ads, but fear not, we're going to make it quick, snappy, and get you just the information you need to know to pick the right bid strategy for your Google Ads campaigns every time.
I'm your host, Jyll Saskin Gales. I spent six years working for big brands at Google, and now I work for you.
This is Inside Google Ads, Episode 77: Every Bid Strategy Explained.
A quick note before we jump in, usually on this podcast, I answer three burning questions that you've asked me on social media. But this month we're experimenting with a few different things. And according to my YouTube analytics, bid strategies are one of the topics that my viewers, you, want to know the most about. So that's why we're going in depth on this one topic today and in a few weeks, we'll be back to our regular three question format. If you do have any questions for me, feel free to drop a comment wherever you are watching or listening to this.
The first thing you need to know about bid strategies in Google Ads is that there are four different kinds of bid strategies. Impression based, click based, view based, and conversion based, which is also called Smart Bidding.
I'm going to start with the Smart Bidding strategies, because those are the ones you're probably going to want to use the most often, before diving into each of the following categories.
The reason you're most likely to use a Smart Bidding strategy is because these are the strategies that optimize for taking action. You want your users to do something like buy from you, fill out a form, book an appointment, call you, et cetera.
The four Smart Bidding strategies are:
Maximize Conversions
Target CPA
Maximize Conversion Value
Target ROAS
Maximize Conversions is your base bread and butter strategy, and it's the one I'll generally advise you use when you're just getting started with the campaign. This strategy tells Google to spend your budget in order to get you as many conversions as possible. It does that by using all kinds of contextual signals that are present at auction time to set the right bid for each and every user.
For example, let's say that you are a yoga studio and you are advertising yoga classes. When someone searches “yoga class,” that can mean a lot of different things. Are they looking for in-person or online? Are they brand new to yoga or have they been doing handstands for 20 years? Are they looking for a free YouTube video or are they looking for personal one-on-one instruction?
From just that search alone, “yoga class,” we have no way to know. But you know what? Google has a pretty good idea because Google knows so much about us. So Google is taking all these different things into account to try to bring the right kind of yoga class searchers to you who are most likely to want what you offer. And just as importantly, to bid down or not bid at all for those who are not likely to buy from you or do the thing you want them to do.
Note that even though you are bidding to Maximize Conversions, you still pay per click. That's why our industry is called PPC. And you can use Maximize Conversions as part of a portfolio bid strategy across multiple campaigns.
All bid adjustments will be ignored if you turn on Maximize Conversions, except if you're using a device bid adjustment of minus 100%, which would tell Google that you do not want to advertise on that device.
Maximize conversions is compatible with Search, Display, Demand Gen, and Performance Max.
Now with Maximize Conversions, I mentioned that the goal will be to spend your budget in order to get you as many conversions as possible. Its sister strategy is something called Target CPA. CPA means Cost Per Acquisition, which is another word for conversion, because the acronym CPC was already taken by cost per click. That's why we call our cost per conversion a CPA.
If you set a Target CPA bid strategy, it tells Google to get you as many conversions as possible at your Target CPA, which is your desired level of efficiency. That means that the goal here, and with any target-based bid strategy, is that efficiency level you set. And as you'll see, there's Target CPA, Target ROAS, Target CPM, Target CPV, even Target CPC.
Whereas with the maximize strategies, Maximize Conversions, Maximize Clicks, Maximize Conversion Value, et cetera, the goal is to spend your budget to get a result, with Target strategies, the goal is a level of result. And if Google doesn't think it can hit that, then it won't spend your budget.
Like Max Conversions, Target CPA is a Smart Bidding strategy, meaning it also uses contextual signals present at auction time to set the right bids each and every time. You can use it as part of a portfolio bid strategy and you still pay per click.
You can also set minimum CPC and maximum CPC bid limits if you're worried about going full automation, but I generally don't recommend doing that unless you have a very specific business reason to do so.
You can use device bid adjustments with Target CPA, but they work a little bit differently. They don't actually adjust your bids. Instead, they will adjust your target. So for example, let's say you have a minus 50% mobile bid adjustment, and then you turn on Target CPA. That's not going to lower your bids by 50%. It'll lower your Target CPA by 50%. So if your Target CPA is $100, and you have a minus 50% mobile bid adjustment, that will set your mobile Target CPA at $50. So practically, it will probably lower your bids. But this is just one of those weird little quirks of Google Ads that doesn't quite work how you think it should.
Target CPA is compatible with Search, Display, Demand Gen, Performance Max, and App campaigns. In an App campaign, it'll be called cost per install or cost per in-app action depending on the objective of that campaign.
One more note about Target CPA, if you're using it in a Display campaign, you may see an option called “Pay Per Conversion.” Sounds appealing, right? In these Display campaigns, that means instead of paying per click, you can actually pay only for conversions. However, there are many eligibility requirements to use this. You have to have enough conversion volume. You can't have a long conversion delay. You can't set a target that's too high. You have to have a sufficient budget. And even if you have all those things, Google Ads can still give you a status of “ineligible for undisclosed reasons.” But this is the only place that pay per conversion exists in Google Ads, so I had to mention that.
Our next two Smart Bidding strategies are Maximize Conversion Value and Target ROAS. They work really similarly to Max Conversions and Target CPA. The key is that instead of optimizing for conversions, they optimize for conversion value. Rather than treating every conversion like it's the same, it either happened or didn't, it looks at the differing value of different conversions.
For example, if your conversion is a phone call, someone either called you or they didn't, it either happened or it didn't. But let's say that you sell clothing. You may have some items that cost $10, some that cost $100, and some that cost $1,000. So these value-based bid strategies would consider those different values when setting your bids.
Accordingly, Maximize Conversion Value tries to spend your budget in full in order to get you as much conversion value as possible.
It uses contextual signals. You can use it as a portfolio strategy. It ignores all bid adjustments except a minus 100% device bid adjustment, and you still pay per click. It's compatible with Search, Display, Demand Gen, and PMax. But there may be certain eligibility requirements in order to use this bid strategy.
Target ROAS aims to get you as much conversion value as possible at your desired level of efficiency, your target return on ad spend, which is calculated as conversion value divided by cost. In plain English, a Target ROAS of 1.5 or 150% means that for every $1.00 you spend on Google Ads, you want to get $1.50 in return - in revenue, not profit.
Target ROAS also uses contextual signals at auction time. You can use it in a portfolio bid strategy. You still pay per click and it ignores bid adjustments except minus 100% on a device. As with Target CPA, in Target ROAS, you can set minimum CPC and maximum CPC bid limits, and I still don't recommend doing that.
Target ROAS is one of the most widely compatible bid strategies because you can use it with Search, Shopping, Display, Demand Gen, PMax, and App campaigns. However, every campaign type has different requirements you must meet, usually a certain amount of conversions in a certain amount of time before you're able to use Target ROAS. Because of course, this needs a lot of data in order to learn and be able to set your bids accordingly.
All right, those are our four Smart Bidding strategies. Let's move on now to our click-based strategies, where your goal is website traffic, not necessarily conversions.
There are three click-based strategies in Google Ads:
Maximize Clicks
Target CPC
Manual CPC
Let's start with Maximize Clicks. This is an automated bid strategy, meaning Google sets your bids for you, but it is not a smart bidding strategy because it's not conversion-focused and doesn't take into account the same number of signals.
Still, this automated bid strategy will work to spend your budget in order to get you as many clicks as possible. You can use Maximize Clicks as a portfolio bid strategy, and while you can't set minimum CPCs, you can set maximum CPC bid limits if you want. Maximize Clicks is compatible with Search, Shopping, Display, and Demand Gen campaigns.
The sister to Maximize Clicks is something brand new called Target CPC. In fact, this is so new that I've read about it, but I have not actually seen it in any accounts yet as of when I'm recording this.
Target CPC, like Target CPA or Target ROAS, aims to get you as many clicks as possible at a specific efficiency you set, at that specific CPC - cost per click - that you set. Each individual click may cost more or less than your target CPC, but Google will aim to average out to your target CPC with your actual CPCs.
This automated bid strategy is only compatible with Demand Gen campaigns. So do let me know if and when you see this as an option in your accounts.
Last but not least is the OG bid strategy in Google Ads, Manual CPC. This is a manual bid strategy where you set the maximum amount you're willing to pay per click and Google will not bid any higher than that. So there is no automation brought in here. There's no trying to average things out. There's no trying to communicate your goals. Instead, you just say, I'm willing to bid up to $3.00 and Google can only bid up to $3.00 and no more.
Now Google might bid less, right? It's still an auction for those keywords or those audiences but you will never pay more than the maximum amount you're willing to pay per click.
There used to be something called eCPC or Enhanced CPC that you could turn on with Manual, but it doesn't exist anymore, so we're just going to leave that behind. You can use Manual CPC Bidding in Search, Shopping or Display campaigns.
That is seven bid strategies down and five more to go.
By the way, I created a bid strategy cheat sheet with all 12 bid strategies so you have a one-stop shop when you're trying to decide which one to use for your campaigns. This is one of many resources you get as an Inside Google Ads course member, along with more than 100 in-platform tutorials and the opportunity to join an exclusive one-hour call with me every single month. You can learn more about my course Inside Google Ads at learn.jyll.ca.That's JYLL dot ca.
Let's look now at our view-based bid strategies for Video campaigns, where the goal is engagement.
Now, before I explain the two options for view-based bidding, I want to explain what a view is in Google Ads, because this is another one of those things that doesn't work the way you think it would. A view has three different definitions depending on the placement of your video ad.
For an in-stream ad, meaning one of those ads that plays when you're trying to watch a video, when you're hovering, waiting to click “skip ad,” a view counts when the user watches at least 30 seconds of the ad, or the end of the ad, or they interact with your ad, like clicking on your link or your call to action, whichever comes first.
For an in-feed placement, which is where YouTube is recommending your video, but the user has to choose to watch it, a view counts when the user clicks on your thumbnail to watch the ad, or if they watch the autoplay of your video ad in the thumbnail for at least 10 seconds, or to the end, whichever comes first.
Then with a Shorts ad, a view counts when someone watches at least 10 seconds of your Short, or the end, or clicks on the call to action, whichever comes first.
Now that we know what a view is, you can choose between Target CPV bidding or Maximum CPV bidding. Sound familiar?
With Maximum CPV, you set the maximum amount you're willing to pay for a view, just like with manual CPC. This is a manual bid strategy where you pay per view and you can only choose this bid strategy in a Video campaign, and specifically the ad sequence subtype - meaning virtually no one uses this bid strategy.
That means if you're running a video campaign, you are likely going to be using Target CPV bidding. This means you set the average amount you're looking to pay per view, similar to the Target CPC bid strategy. Each individual view may cost more or less, but overall, Google will aim to average out to your desired target cost per view. That means this is an automated bid strategy. You pay per view, not per click, and this is compatible with the video views subtype of video campaigns. In a moment, you'll see what your options are for Video Reach campaigns, because those fall under our impression-based bid strategies.
Impression-based bid strategies are what you'll use when your goal is awareness, visibility, or reach. You're not trying to get people to your website. You're not trying to get them to convert. You're not trying to even get them to engage with the view. You just want to get those impressions, those eyeballs.
When we measure the value of impressions, we usually talk about a CPM. This stands for cost per mille, which means cost per thousand impressions. Because individual impressions are generally very cheap, we don't talk about a cost per impression. We talk about a cost per thousand impressions, or CPM.
In Reach-focused Video campaigns, you will use a Target CPM bid strategy. Now we really know what this means! Each individual impression may cost more or less, but overall, Google will aim to average out to the Target CPM that you set.
With this bid strategy, you pay whenever your ad is shown, you pay for impressions, and it optimizes for unique reach, showing your ads to as many different people as possible. It is an automated bid strategy, you pay per impression, and again, this is only compatible with reach-focused video campaigns.
The other CPM bid strategy is called Viewable CPM. This used to be called maximum CPM, but now it's viewable CPM. And it is a manual bid strategy where you set the maximum amount you're willing to pay per a thousand viewable impressions.
An ad is counted as viewable when 50% of your ad shows on the screen for one second or longer. Strange definition, I know. It is only compatible with Display campaigns. The Google Ads Help Center says you can use this in video, but take my word for it (or go check if you want), that's out of date. In video, you have to use CPV or Target CPM bidding. Viewable CPM is only for Display.
Last, but definitely not least, is Target Impression Share bidding. This is a bid strategy that's only for Search campaigns and only for Google search. It doesn't work on search partners. And what you do is you bid for visibility. Specifically, you bid for whether you want to be the first ad on the search engine results page, that's called Absolute Top, whether you want to be among the ads at the top of the page, Top, or you just want to appear anywhere on the search engine results page.
Note that although this is an impression-based bid strategy, you still pay per click as with other bid strategies in Search campaigns. You can use this as part of a portfolio bid strategy, and you can set Maximum CPC bid limits if you want to, because as you might imagine, if you're trying to get a very high impression share, it's going to cost you. This automated bid strategy will ignore all bid adjustments except device bid adjustments at minus 100%.
And there you have it. We have covered all 12 bid strategies in Google Ads.
To recap, you have four Smart Bidding strategies:
Max Conversions
Target CPA
Max Conversion Value
Target ROAS
You have three click-based bid strategies:
Maximize Clicks
Target CPC
Manual CPC
You have two view-based bid strategies:
Target CPV
Maximum CPV
And then, three impression-based bid strategies:
Viewable CPM
Target CPM
Target Impression Share
Which bid strategy should you choose?
That is the million dollar question. So my oversimplified answer is for Search, Display, Demand Gen or PMax, you'll probably want to start with Maximize Conversions and aim to get enough conversion data to get to Target CPA or Target ROAS as soon as you can. Think of your Maximize bid strategies as a waystation on the way to a target bid strategy, because using a target-based bid strategy is how you're going to be able to profitably scale your campaigns.
For Shopping, you'll want to start with Maximize Clicks or Manual CPC, but aim to get to Target ROAS as quickly as possible.
And for Video campaigns, I will almost always choose a Video Views campaign, which will mean Target CPV bidding.
I talk about bidding a lot on the Inside Google Ads podcast because you ask me the most questions about it. So in the episode description, I have linked all of the other episodes we've done about bidding topics.
More Inside Google Ads podcast episodes about bidding
Episode 1: Which bid strategy should you choose in Google Ads?
Episode 15: Should you use Maximize Conversions bidding?
Episode 26: Is Manual CPC bidding in Google Ads a mistake?
Episode 34: When should I change my bid strategy in Google Ads?
Episode 42: Will Maximize Conversions bidding inflate my CPCs?
Episode 50: Do I need to set a Target CPA or Target ROAS in Google Ads?
Episode 55: Can you still use Manual CPC bidding in Google Ads?
Episode 65: Should you use bid adjustments in Google Ads?
Episode 67: Why does Smart Bidding drive up my CPCs?
Episode 71: Should you use Target CPA bidding in Google Ads?
And I'm really excited to announce that my second book is going to be all about bidding. Inside Google Ads: Everything You Need to Know About Bidding is going to be the sequel to my first book, Inside Google Ads: Everything You Need to Know About Audience Targeting.
Be sure to stay tuned for next week's episode where I'll be welcoming the top video ads expert in the world who will share something I guarantee you didn't know you could do with Google Ads.
If you liked this episode, or if you didn't, drop a comment wherever you're listening or watching right now. I'd love to hear from you.
I'm Jyll Saskin Gales and I'll see you next time Inside Google Ads.