What the Heck is Google Ad Bidding?

Rows of auction bidding paddles are anxiously raised "What the Heck is Google Ad Bidding?"

You’ve written the copy, identified your keywords, and set your budget…but now Google’s asking you what bidding strategy you’d like to choose. Huh? No one prepped you for this. In all honestly, it seems like something Google should just know how to do, right?

Yeah, we know the feeling. Luckily, we’ve been there, done the research, and figured it out. And now, we’re putting some of our handy-dandy Google Ads knowledge into one easy-to-understand blog. Lucky you!

If you’re banging your head against the wall because of Google Ad bidding strategies, you’ve come to the right place.

Why am I Bidding on Google Ads?

If this is a question that’s on your mind, good! A lot of people think about just “paying” for Google Ads. “Bidding” makes us think about old-school eBay and trying to grab auctions at the last minute.

Well, the truth is, whenever you run ads, you’re actually bidding in an auction for the top spot against all of your competitors who are also bidding for that keyword. Whoever has the highest quality ad and is willing to pay the most is going to win out. This process repeats every single time someone searches for the keyword you’re targeting with your campaign, so it’s pretty important to get the bidding strategy right if you want to turn out on top.

Types of Google Ad Bidding Strategies

There’s a lot of acronyms in the digital world, which makes deciphering these strategies immediately become a headache. 

Essentially, Google offers a few different basic ways to pay for your ads. You get to choose to bid based on:

  • Cost per click (CPC) – you pay every time someone clicks on your ad.
  • Cost per mille (CPM) – you pay once for every one thousand impressions your ad gets.
  • Cost per engagement (CPE) – you pay every time someone takes an action you specify.
  • Cost per acquisition (CPA) – you pay every time someone converts.

Google also offers a few more complex bidding strategies through its Smart Bidding options. More on those below.

Smart vs. Manual Bidding

Once you choose how you’d like to be charged (and therefore what your ads are focusing on), you can pick to either go with automated bids or a manual bidding system. These are pretty self explanatory, but we’ll elaborate just in case.

Smart (or automatic) bidding is when Google is in charge of the minimum bid you place for each auction. Google is allowed to change that amount based on what competitors are bidding (either raising or lowering it, depending on the market). Still, Google won’t go over your budget while making these adjustments. 

Manual bidding is when you put in how much you’d like to bid for a certain keyword. If, for example, “stop dogs from barking all the time” is a keyword you’re targeting and you really want to come out on top, maybe you want to spend a couple more dollars on each bid for that keyword. You could choose to place a $6.50 bid on that while lowering “bad dog help” to $3.

Smart Bidding Strategies

If you choose to allow Google to take the reins, there are a few extra bidding strategies that open up to you. Those include:

Maximize Clicks

This strategy prioritizes clicks (sort of like the CPC strategy above). However, instead of entering a specific amount for each click, you let Google change your bids as needed to make sure you get the maximum number of clicks possible within your budget.

Target CPA

Remember CPA above? This one’s a little more complicated. Essentially, you have to dig into Google to find the average cost per acquisition that your account has paid in the past. Then, you can tell Google that’s the average cost you want to pay per acquisition. It takes this info and runs with it to get you as many acquisitions/conversions as possible.

Target ROAS

Return on Ad Spend (ROAS) is a very popular metric for CEOs and marketing managers everywhere. This strategy facilitates that by analyzing how much it thinks each individual person is likely to spend when they convert. If the person in question will purchase a lot, Google will bid more to get that person to convert, while little spenders will get smaller bids. It’s all in an effort to maximize ROAS.

How Do I Choose a Google Ads Bidding Strategy?

Good question. First, you have to ask yourself a few more, like:

  • What’s my campaign objective? Do I want more sales? More people to know about my product? 
  • Do I want to manually handle my bids or let Google do that?
  • If I want to pay every time someone converts, do I have conversions set up in Google Ads?
  • What metrics will I be reporting on? 

Those questions can help narrow down what to target, who to give bidding authority to, and how to get the results you want. Or, of course, if you’re stuck, you can also reach out to an amazing team. We’ll handle it for you.

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