Editor’s Note: This post has been updated with fresh links and new content for readers like you 😉
Original Publication Date: February 9, 2016
Does winning every Google Ads bidding auction make you as happy as the kid above in the sweet fedora with $36 to spare?
How about watching your ads pull in double-digit conversions, catapult themselves to top of the page … while at the same time undercutting the suggested cost-per-click every other chump is still forced to bow to?
You know, a little something like this:
Of course, beating your competitors in the Google Ads slugfest that happens 40,000 times every second isn’t easy. And more importantly, it doesn’t happen by accident.
There’s much more to Google Ads bidding than just the bid. What’s the audience conversion intent like? Do you have bid adjustments in place?
To get an actual custom game plan that works best for you, get a free proposal from us and we’ll show you.
Even if you’re still looking for your first Google Ads breakthrough and haven’t yet experienced the joy of virtually destroying your deep-pocketed rivals, I’ve got good news.
All it comes down to is arming yourself with the right tricks, tools, and tactics — 21 to be exact — and then releasing the Kraken.
Let’s jump in…
The Google Ads Auction
The art of bidding has been around since at least 500 B.C., when women of Babylon were auctioned off as wives.
And while women’s rights have improved a bit since then, the art of the auction is more intense than ever.
Just take a look at this Google Ads auction from the 1940s.
Joking aside, PPC management companies these days have hundreds of different bidding options that can be programmed to trigger instantly and automatically.
But before we get into that, here’s a quick refresher on how Google’s ad auction works:
Three Components of Google Ads Auction Rankings
Every Google Ads auction takes three major elements into account when it decides how your ad should rank:
1) Your max cost-per-click bid for the keyword
2) Your quality score for that keyword
3) Your ad extensions and their relevance to ad and keyword
Like I mentioned earlier, the Google Ads auction happens extremely fast (and extremely often). So it’s vital that you know what’s out there to take advantage of.
Finally, if you’re trying to reach the ultimate level of Google Ads success, then I highly recommend you read my post on Single Keyword Ad Groups (SKAGs), which has more than 250 comments since it was published.
In that post, I talk about the reason why you should care about the granularity of a Google Ads account and how it’ll give you even more of a positive bump for your Google Ads bidding strategies.
With all that said, it’s time to get deep into the details of Google Ads bidding.
Let’s dive in.
What Are Your Goals?
Google Ads’ (and everyone else’s) auction-based bidding model originally got its name from the Latin word “augeō,” which means “to increase”.
But “to increase” means to pay more. We don’t want to do that.
We want to make more profit.
But that’s just my goal. What’s yours?
When you’re setting goals for your PPC campaign, especially in the context of bidding and the average cost per conversion, you have to factor in the balance between conversion volume and cost per conversion.
For example, you can keep lowering bids, but that will eventually hurt your conversion volume.
You can keep increasing bids too, which might increase your conversion volume. But that will eventually increase your cost per conversion as well.
So what’s the good news?
Now you can have the best of both worlds (and I don’t mean the Hannah Montana song).
The Different Google Ads Bidding Strategies
Do you want to do things manually or automate? The Google Ads bidding strategies we’re about to uncover can help you get closer and closer to your goals.
One thing to keep in mind, however, is that nothing should ever be set on auto-pilot.
You (or your agency partner) should always keep tabs on fluctuations in performance. And if you improve your conversion rates through landing page testing, understand that your bidding goals can improve and change very quickly. (For example, higher conversion rates can support more aggressive bidding strategies.)
Here’s a look at the different Google Ads bidding strategies available today:
Strategy 1: Manual Cost Per Click (CPC)
Manual cost per click allows you to set bids at either the ad group or keyword level.
Setting individual bids at the keyword level allows for the highest level of control. Ad group level manual bids, in contrast, give the same bid to all the keywords or placements within that ad group.
Important Note: Keyword level bids override ad group level bids.
This is usually the best bidding strategy for new advertisers. You can keep a close eye on performance and make sure that none of your ads are overspending.
Strategy 2: Automatic Cost Per Click (CPC)
Automatic cost per click gives Google control to adjust your bids up or down. This helps give you the most clicks within your daily budget for that specific campaign.
This is a decent bid strategy if you need to drastically reduce budgets and don’t want to lose impression share too fast.
One of the downsides to this bidding strategy is that it doesn’t allow you to set max CPC bids at the individual keyword level.
If some keywords are performing better than others, for example, you may want to increase those specific bids. But if you use automated bidding, you won’t have that level of control.
Another key to remember is that your goal for this strategy isn’t clicks, it’s conversions. So you can test this Google Ads bidding strategy, but it may not work out for you.
Strategy 3: Enhanced Cost Per Click (ECPC)
Enhanced CPC (ECPC) gives Google the freedom to increase or decrease your bids by 30%.
Google tells us that they use historical conversion data and their algorithms to predict which searchers are more likely to lead to a conversion and which aren’t.
In the event that a conversion is likely to happen, Google will increase your max CPC bid by up to 30%. It does the opposite for conversions that are less likely.
Google says that “ECPC can help you get more conversions while maintaining or reducing your cost per conversion.”
But take that with a grain of salt.
If you’re curious, try it on a smaller campaign first. Measure the cost per conversion, conversion rate, and conversion volume as an apples-to-apples comparison.
Sometimes this is a default bid setting when creating new campaigns, so be aware if you don’t want to use it at that given time.
Strategy 4: CPA Bidding (Conversion Optimizer)
Also known as conversion optimizer, CPA bidding allows Google to adjust bids to average a certain cost per conversion goal that you’ve set.
Based on the history of your Google Ads account and conversion volumes, CPA bidding needs at least 15 conversions over a span of 30 days to become active.
If you meet those criteria, the CPA bidding can only be held back by budget caps that you might have.
I’ve found that CPA bidding is much more effective on the Google Ads Display Network (where a lot more factors are responsible) versus the Google Ads Search Network. On the latter, keyword intent can be very obvious and lead to a conversion.
As with all Google Ads bidding strategies, always record pre-performance and compare it with post-performance after you implement a new bidding strategy.
Strategy 5: CPM Bidding (Cost Per Thousand Impression)
Only available for Display network campaigns (like remarketing), CPM bidding allows you to set target bids that accumulate after 1,000 impressions.
Google once allowed max CPM bidding, but has since changed it to what’s called Viewable Cost Per Thousand Impression bidding (vCPM).
CPM bidding doesn’t charge you for clicks. But it will charge you for impressions of your ads, even if they’re shown below the fold where a user won’t see them.
Here’s what that bidding strategy option looks like within a Display network only campaign:
Strategy 6: Flexible Bids
Your flexible bid strategies are located within your Google Ads shared library.
Once you get there, you’ll find the option to choose from six different flexible bid strategies. Keep scrolling for a brief explanation of each one:
1) Enhanced CPC
As mentioned above, ECPC gives you the option to raise or lower bids by 30%.
2) Target Search Page Location
Are your ads performing really well in a specific page location, like above the organic search results or on the sidebar? Then this bid strategy will be fun for you to test out.
Here’s a look at the options you can set:
3) Target CPA
With Target CPA bidding you can include as many or as few campaigns as you want to share your CPA goals. This is similar to what regular Google Ads shared budgets do.
4) Target Outranking Share
Are you basing all your performance goals on how much you can outrank a certain competitor?
This bidding strategy could help you out quite a bit. (It also strokes the ego… and can be a little bit dangerous.)
By entering your competitor’s domain, you can tell Google how often you want your bid to outrank them. This is called the “Target outranking share”.
If you set your target outranking share to 50%, then Google will bid to outrank that specific competitor in 50% of the auctions.
5) Maximize Clicks
This automated bid strategy is just like automated CPC bidding.
Again, be aware that this strategy can lead to lower-quality clicks, which can lead to lower-quality conversions.
6) Target Return On Ad Spend
Do you have a certain ROI you want to hit when it comes to your PPC agency spend?
If so, targeting return on ad spend (ROAS) might be for you. ROAS is a metric that takes your conversion values (set at the conversion tracking stage) or Google Analytics eCommerce revenue values into account.
Let’s say you’d like a 7x ROI. This means that for every $1 you spend on clicks, you’re expecting $7 in return.
You’d set your target ROAS as 700%, as eBags did (successfully) in this Google case study.
To learn more about the pros and cons of each bid option, check out our deep dive into flexible bid strategies.
Tips And Tricks For Google Ads Bidding
By now you should be familiar with the different ways you can set up bidding for your Google Ads. it’s time to look at six specific opportunities within the platform that you can use to augment your auction results.
1) Bid Modifiers
Did you know that all devices, days of the week, time of day, and geographic locations perform differently?
Within Google Ads, you can run reports based on those metrics and see where it may make sense to increase or decrease bids depending on performance.
To see device performance, you can segment your campaigns or ad groups and see the individual device performance.
You might find, for example, that mobile devices are driving conversions at a lower cost. If so, it would make sense to set a 20% positive bid modifier on mobile devices for that specific campaign.
To see the day of the week or time of day performance, you can go to the Dimensions tab and click View: Day.
When looking at this report, you can see if you should not advertise during certain hours of the day because the cost per conversions are too expensive. You might also find that Saturdays and Sundays have lower relative cost per conversions, so you could target those days specifically.
To see geographic performance down to the city level, you’ll want to stay on the Dimensions tab and then View: User locations.
You might find that the city of Dallas (for example) is more expensive than Los Angeles when it comes to conversion costs. If that’s the case, you could set a negative bid modifier of 20% for Dallas.
2) Bidding Rules
Google Ads allows you to set certain bidding rules that will pause, enable, and change bids and/or budgets depending on your chosen parameters.
Depending on your tab view within Google Ads, you can set rules at the campaign, ad group, ad, or keyword level.
As an example, you can create a rule to raise bids by a certain percentage if the average cost per conversion is below a certain level. Another rule can raise your bid if the average ad position is low to help you increase conversions.
To create bidding rules, just click the “Automate” button. From there you can select which type of rule you want to put in place.
3) Bidding Scripts
Google Ads scripts allow you to automate your Google Ads activity according to specific time intervals and other available metrics.
Using scripts allows for greater customization beyond regular Google Ads rules, as you can get really creative with what you want to control. Like changing your bids based on weather patterns, for example.
Without getting too technical (or confusing myself) you can dive deeper into the bidding scripts already available, and also see what else might interest you with Google Ads scripts.
4) Bidding For Sales, Not Conversions
A lot of people will look at a Google Ads account and work towards getting more conversions for the sake of conversions.
But that’s wrong.
Are you trying to generate leads or acquire users for your SaaS business? Then it’s extremely important to know that not all keywords are created equal.
If you’re not tracking which keywords are generating sales (again, not just leads), then you’ll treat all PPC traffic as the same with an arbitrary cost per conversion goal.
Some keywords will have a higher sales rate than others.
When that happens, you should be okay bidding more aggressively for those keywords and be okay with a cost per conversion that’s higher than the account average.
This will help you close more deals and achieve more revenue, which should be your ultimate goal anyway.
5) Seasonal Trends
Depending on the time of year, your Google Ads performance will differ if you’re a seasonal business.
This means that your conversion rates could go down and your cost per conversion could go up.
The opposite could also happen during Christmas time.
If your conversion rates may be much higher than they usually are, you have a reason to bid aggressively and capture as many conversions as possible. But after Christmas, when that performance doesn’t continue, your bids should reflect that change.
Keep this in mind as you’re looking at your account for yearly season trends (inside your Dimensions tab).
6) Different Keywords, Different Offers, Different Margins
Have you ever split tested your landing page offers?
If so, then you know how much of a conversion increase (or decrease) you can expect. And when that happens, your sales/closing rates improve or worsen too.
Like average order values for eCommerce sites, different keywords bring in different margins and dollar values.
It’s important to stay away from a “blanket bid” mentality. Not all keywords should be held to the same bidding goals.
As you keep testing new offers, keep a close eye on what changes (like time to close, and sales/closing rates) after the initial lead is captured.
Google Ads Bidding Tactics
While strategies are important, it’s also important to have a few bidding tactics up your sleeve. We’ve picked out three that you can use to get started right away.
Especially if you want to perform some Google Ads magic.
1) Bid Bumping
Many people start out very conservatively with their bids when launching a new campaign.
But what if you did the opposite?
Bid bumping is a tactic that allows your keywords to maintain a high average position, even after you’ve lowered your bids.
It works by temporarily paying a higher CPC and getting a higher click-through-rate. By then slowly lowering your bids, you can find that your performance stays but your average CPC and conversion cost goes down.
2) RLSA Competitor Bidding
RLSA competitor bidding is one of the 33 different retargeting campaigns I mentioned in a past post. It allows you to bid more aggressively for searches by visitors who have already been on your site or landing page.
By adding an audience to an existing competitor search campaign, RLSA competitor bidding allows you to add a bid modifier to your keyword bids. You can be much more aggressive and are more likely to convert a past visitor who’s familiar with your brand.
3) Bidding On Branded Keywords
Seems like a no-brainer, right? But bidding on branded keywords does more for you than just being able to control your ad message.
In addition to sending branded visitors to a dedicated landing page (compared to a static homepage), branded keywords can lead to an increase in overall account health and performance improvements for other keywords.
This doesn’t mean that you have to fiddle with changing bids at the branded keyword level. But it should be something you consider, even if you think you’re already getting organic clicks for “free”.
While bidding is important, it’s far from the most effective type of SEM management out there.
With wins from landing page testing and conversion rate optimization, you might find that your problems of bids being too competitive or expensive may disappear.
There are more than 21 different Google Ads bidding strategies and options above to choose from. Which one will you test first?