Bidding for Google ads is very important because it determines the ability and position of the ad. If you know how to bid on Google Ads, your ad will be more likely to appear at the top of Google. This helps increase click-through rates and conversion rates into sales, maximizing profits. Follow this article from Optimal Agency to decide on the bid level that suits your business goals.
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What is Google Ads bidding?
The bid represents the amount of money you are willing to spend for each click on a certain keyword in Google Ads. It determines where the ad will appear in search results. Google Ads bidding strategy is how you participate in the auction to achieve the important advertising goals you have set.
The bidding strategy will depend on the advertising goal, which can be clicks, conversions, ad impressions, views, etc. For each different goal, you need to choose the most suitable bidding strategy to achieve many results based on the set goal.
Today, Google Ads uses a smart AI machine learning system and it will help you find the most potential customers to bring many results and achieve advertising goals. Therefore, choosing the right bidding strategy will help Google’s AI system understand your wishes when implementing the campaign. Then it will try to find many potential customers to achieve the most optimal results for the advertising campaign.
How to bid on Google Ads effective
Set manual bidding
With this bidding strategy, advertisers have full control over the cost per click on the ad or the cost per 1000 ad impressions or each video ad view. Bidding strategies in this group include:
Manual CPC
Understood as cost per click, CPC stands for Cost Per Click. When choosing this bidding strategy, advertisers have full control over the cost they want to pay for each click on their ad. You can adjust the CPC you want for each ad group, keyword, or placement. In addition, you need to adjust your bids according to each actual auction point.
Maximum CPV
CPV bidding strategy stands for Maximum Cost Per View or maximum cost per view. This is the highest cost you can pay for each view of your video ad. With this bidding method, it also includes costs for interactive actions: clicks on call-to-action buttons, cards or banners, etc.) This bidding method is suitable for video advertising. You need to set a maximum CPV bid that is appropriate for your campaign.
Target CPM
tCPM stands for Target Costs Per 1000 Impressions, which is a bidding method where you set an average amount for every 1000 times your ad is shown. Google Ads will try to optimize your bid using tCPM so that your ad can have the widest reach. Each impression will cost more or less than tCPM, but Google Ads will keep that cost at the same threshold or less than the set tCPM.
Note that tCPM is applied to video ads, paying for 1000 ad impressions. It can apply the vCPM or Viewable cost per 1000 impressions strategy, which is the price for 1000 impressions. This strategy is suitable when advertisers have the goal of optimizing the number of people who see the ad. vCPM is only applicable to Google Display Network campaigns. Both CPV and CPM are suitable for the goal of maximizing the number of people who see the ad.
CPE
Stands for Cost Per Engagement. When choosing this bidding strategy, advertisers only need to pay when users actively interact with the ad. This bidding strategy is only applicable to lightbox ads, meaning that when a user clicks on the lightbox to expand the ad, that action is counted as an interaction. This bidding method is only applicable to Google Display Network campaigns with the campaign objective of finding potential customers.
Automated Bidding
This Google Ads bidding method makes things simple, and fast and achieves performance goals. Each type of Google Ads automated bidding strategies helps you achieve specific goals.
Maximize Clicks
This is the simplest strategy you can use to bid to get the most clicks within your budget. You just set your budget and Google Ads takes care of the rest. Once you set your average daily budget, Google Ads automatically sets your maximum cost-per-click (CPC) bid. You don’t need to choose specific bids for ad groups, keywords, or placements.
Maximize Conversions
With this bidding strategy, the system automatically sets your bids to get the most conversions for your campaign within your budget. It uses advanced machine learning to automatically optimize bids and automatically adjust for each auction.
With this bid strategy, Google’s machine learning system only participates in the auction and shows ads to potential customers with a high probability of conversion. This bid strategy also automatically sets bids at auction time to adjust bids for every auction. Then you will get more conversions at a low cost within your budget.
To use this bid strategy, you need to set up conversion events and ensure your Google Ads account has a certain number of conversions in the last 30 days. The system will automatically set bids in every auction in real-time.
Target CPA
CPA or Cost Per Acquisition is the cost per conversion. Target CPA is a Google Ads smart bidding strategy that helps advertisers get as many conversions as possible at or below the target CPA you set. This strategy uses advanced machine learning to automatically optimize bids and offers auction-time bidding to adjust bids to match each auction. When using this bidding strategy, you need to set up conversion events and ensure your Google Ads account has a certain number of conversions in the past 30 days.
Set an appropriate target CPA based on the cost or conversions of your Google Ads account or campaigns that have been running for about 14 – 30 days. You should set a daily budget 5 – 10 times higher than the target CPA so that the system can quickly complete the learning phase and operate stably to generate the most conversions.
Maximize Conversion Value
With this bidding strategy, you can maximize the total conversion value of your campaign within your set budget. This bidding strategy uses machine learning to automate optimization and bidding. It also offers auction-time bidding to adjust bids for each auction.
In addition, you need to determine the value of each conversion action in your Google Ads account so that the system knows which conversion events should be prioritized. This ensures that you get the highest total conversion value within your set budget.
Target ROAs
ROAs stands for Returns On Ads Spent or Return on Ad Spend. This Google Ads smart bidding strategy helps you get a higher conversion value or revenue than the target return on ad spend you set. Bid optimization is automatically performed at auction time, allowing you to adjust your bids to match each auction.
To use this bidding strategy, you need to calculate the target ROI on ad spending you want to achieve. At the same time, make sure that the campaign has at least 15 conversions in the last 30 days. This strategy will work better if you have fewer campaigns, larger campaigns, and more conversions. In addition, you need to set the Target ROAs at the appropriate level for the campaign to perform best.
Important notes when bidding on Google Ads
When applying the above Google Ads bidding methods, you need to pay attention to the following to make your advertising campaign highly effective:
- Depending on the advertising goals when implementing the campaign, you need to choose the appropriate bidding strategy.
- Understand the bidding formula when participating in Google advertising, which is not to exceed the prescribed limit to ensure that you do not lose money when running ads.
- You should choose the product with the highest conversion rate if you choose the manual bidding method.
- Do not bid higher than the max bid to avoid overspending and affecting profits.
- Use the Google keyword planner to identify keywords with high search traffic to set appropriate bids.
- In the Google Ads interface, you can get some valuable details such as estimated bids. Take advantage of these figures to come up with the best bidding strategy for your ads.
Have you grasped how to bid on Google Ads effectively through the content we shared above? Hopefully, through that, you will be able to choose the right bidding method to optimize your advertising campaign and achieve the set goals as well as achieve the best results.
Please see more:
- How to link Google Analytics with Google Ads easily
- How to set up outbound clicks on Google Analytics 4
- How to increase the conversion rate of Google ads
Frequently asked questions
Most people often think that for an ad to have a high click-through rate, the ad must rank at the top 1 on Google. However, this view is not entirely correct because there is a way to help your ad get more clicks, specifically you need to choose an ad position that customers click on most often. Combined with testing or using Google’s automated bidding strategy. Today, Google has several smart statistical tools that allow advertisers to bid within their budget while ensuring they are in the best position to get the most clicks.
For Google Ads, the best bidding strategy is based on Target ROAS. With this strategy, advertisers can optimize their campaigns for a certain profit on the amount spent on advertising. By setting a desired profit level, Google will adjust the bid according to the likelihood of the ad achieving the target. This bidding strategy is suitable for e-commerce businesses that need to advertise multiple products or need to show ads to audiences that are more likely to buy.
