Your Guide to AdWords Bidding Strategies

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There are many different bidding strategies that can be used to decide your AdWords bids.

AdWords bids are a key component of Ad Rank. As a reminder of the basic process, Google determines your Ad Rank by using the following formula:

AD-Rank2

 

The following bidding strategies can be used to determine your Max cost per click (Max CPC) aka. your bids for your AdWords ads:

Manual Bidding

With Manual CPC bidding, you can fine-tune your maximum CPC bids to help control the cost and volume of clicks on your ads.

Manual CPC bidding could be a good choice for you if you would like to control maximum CPC bids for individual ad groups, keywords or placements. if you are interested in increasing website traffic and not necessarily brand awareness or you don’t need to reach a target budget every month. (If you do need to reach a target budget, Maximise Clicks may be a better choice.)

This leaves the bidding entirely up to you as the advertiser and is the only strategy that has no automation on the part of Google AdWords.

Maximise Clicks

Maximise Clicks is a flexible automated strategy that could be a good option for you if you have a campaign that meets the following criteria:

  • You have an advertising budget that you’d like to reach consistently.
  • You don’t want to spend time monitoring and updating individual cost-per-click (CPC) bids, and you’re willing to let the AdWords system update CPC bids automatically.
  • You’re mainly interested in increasing website traffic.
  • You’re new to AdWords or don’t know exactly how much to bid for particular keywords or placements.

Maximise Clicks is not a good choice for you if yo have an advertising goal that includes maintaining a specific ad position or cost per conversion. It isn’t possible to set individual CPC bids with Maximise Clicks, but you can set a maximum CPC bid for your entire campaign.

Target CPA bidding

Target CPA bidding (also known as cost per acquisition bidding) is an advanced automated option that lets you bid directly to maximise conversions within a target spend.

Your campaign must meet a few requirements in order to be eligible for Target CPA bidding:

  • You have conversion tracking enabled.
  • Your campaign targets the Search Network, the Display Network or both.

It is also recommended that you meet the following criteria in order to use Target CPA bidding efficiently:

  • Your campaign is direct-response oriented. For example, the campaign focuses on generating sign-ups or sales on an e-commerce website.
  • Your campaign has a single well-defined conversion type, such as a completed purchase or sign-up.
  • Your campaign has a relatively stable conversion rate, with no major changes (such as redefining the conversion event or moving the conversion tracking code) within the last two weeks.

Note-  As AdWords relies on historical conversion data, your campaign should receive at least 50 conversions per month. Your campaign must have at least 15 conversions in the last 30 days in order to be an option for you.

Enhanced cost per click (ECPC) bidding

Enhanced cost per click (ECPC) is a bidding feature that slightly raises or decreases your bid for clicks that will be more likely to lead to a sale or conversion on your website. This should help you to get more value from your ad budget.

It is similar to Target CPA bidding except the modifications to your bids are smaller and more limited to within 30% of your set Max CPC (after applying any bid adjustments that you’ve set), to compete harder for those clicks. ECPC factors in real-time details such as device, browser, location and time of day to adjust your bids during each ad auction.

ECPC has an inbuilt check on itself by leaving part of your traffic alone to work with your regular Max. CPC bids. Using this, it compares the two sets of results and adjusts accordingly.

Other Flexible bid Strategies

There are two additional types of flexible bid strategies, other than the previously mentioned automated strategies:

  • Search page location: AdWords will increase or decrease bids to target a top-of-page or first-page position with ads. This bid strategy works with keywords, ad groups, and campaigns targeting the Search Network only. This doesn’t specify a position on the page (e.g., an advertiser can’t choose to be in third position on the page).
  • Return on ad spend (ROAS): AdWords predicts future conversions and values based on conversion values advertisers set up. To target ROAS, 30 conversions in 30 days is required. Used for Search Network only or the Search and Display Networks. AdWords will try to reach the ROAS targets across all keywords, ad groups, and campaigns.

If you have any questions about bidding strategies, please drop me a line at ash@searchscientist.co.uk or give us a call at 02890683790.

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