Google AdWords: Which bidding strategy should you choose for effective campaigns?

Often, to save time when creating an advertising campaign on Google AdWords, an inexperienced person is tempted to choose preselected criteria without thinking too much about it. Yet, Google likes to point us to more expensive options that aren’t necessarily adapted to our goals.

It is therefore very important to think carefully about all the important points of your campaign before entering the labyrinth that is Google AdWords.

The first few times, it is normal to feel helpless in the face of all these choices:

We know that Google AdWords is based on an auction system. You bet on the keywords that you find most interesting for your company. Depending on many criteria, including the bids of your competitors, your level of quality or the relevance of your ads, you will be placed higher or lower in the search results. It is therefore important to choose the right bid strategy for your campaign to be most effective.

First and foremost, set a specific goal for your campaign

It cannot be stressed enough, choosing a clear goal for your campaign is crucial. Blindly thinking that you will adapt as time goes on is a serious mistake that can cost you money. Take the time to reflect on your expectations.

What is a conversion for you (purchase, contact, registration, etc.)? How will you feel that your budget has been well spent (clicks, conversions, views)? What return do you want to have on your investment?

Automated bidding strategies: let Google work for you

Who knows Google better than Google itself?

Choosing one of the automated bidding strategies is giving Google free reign to optimize your bids based on market knowledge and analysis. If you want to manage your campaigns yourself, this strategy saves time while achieving satisfactory results.

However, choosing an automated bidding strategy doesn’t mean having blind trust in Google. Keeping tabs on the optimizations made by the system and the progression of your campaigns avoids errors that are often time-consuming to fix.

Target Cost-per-Acquisition (CPA) Bidding Strategy

If your goal is to get maximum conversions for a specific budget, this strategy is the right one. Google’s goal is to optimize bids so you can get as many conversions as possible while staying within your fixed cost.

At the time of the auction, Google will study several criteria and compare them to the history of your campaign: browser used, device, day, geolocation, etc. The current criteria will be compared to those that have generated conversions in the past.

This strategy is recommended when you want to generate maximum conversions for a specific cost. If you decide that a conversion should cost no more than $5, Google will adjust its bids to get as close to your goal as possible.

Note: For the algorithms to have enough information and this strategy to be fully effective, it is recommended that you have had at least 30 conversions in the last 30 days. Your campaign and ad groups must also have a consistent number of conversions for several consecutive days.

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Optimize conversions bidding strategy

This strategy is close to the target CPA since its primary goal is to maximize the number of conversions. However, it will not optimize the number of conversions by trying to obtain a certain cost per acquisition but rather in relation to your total daily budget. Therefore, Google will make sure to set bids that create the most conversions, according to your budget.

If you do not have a precise CPA, choosing this strategy and seeing how your CPA behaves naturally can be interesting.

As with the target CPA bidding strategy, it is recommended that you have had 30 consistent conversions in the last 30 days.

Target ROAS (return on ad spend) bidding strategy

Before choosing this strategy, you need to keep in mind the financial return you want based on your investment. From what amount do you think your investment was profitable?

This is called ROAS or return on ad spend. If, for example, you invest $500 on Google AdWords and you get many orders for a total value of $2,000, your ROAS is $4. That means every dollar spent on your AdWords campaign earned you 4.

The Target ROAS bidding strategy is therefore recommended if you want to maximize the value of your conversions in order to achieve a specific ROAS. As such, Google will help you achieve the optimum value for your investment to be profitable. If you estimate that a good ROAS is $4, Google will use your target amount to perform the optimizations.

Based on your site history, Google will analyze potential conversions and set a bid that will meet your ROAS.

This strategy allows you to get conversions with a high return on investment but generates fewer clicks and traffic on your website. In order for it to be fully effective and for bids to be chosen as accurately as possible, it is recommended that you have received at least 50 consistent conversions over the past 30 days.

Optimize clicks bidding strategy

This bidding strategy is also automated. It’s great if you want to increase traffic to your site from your ads.

Google will optimize your different bids so that your ads have the highest click-through rate, while respecting your daily budget.

Of course, choosing this strategy over one with a goal of optimizing conversions will not prevent your campaign from converting well. In fact, it’s not uncommon for the “Optimize clicks” bidding strategy to generate more conversions because traffic to the site is greater and can potentially bring you more conversions. You can also choose to alternate bid strategies by starting with “optimize for clicks” before choosing one of the bid strategies for conversions as explained above.

Once you have achieved a good cost-per-conversion, it may be worthwhile moving towards a target CPA strategy that will allow you to further optimize your spending.

Target search page location bidding strategy

Is your main goal to be placed above your competitors in the search results? In this case, choose the bidding strategy based on a target search page location. This way, you can ask Google to always be positioned on the first page of the results or directly in first position.

Depending on your budget, the system will adjust keyword bids so that you appear as close to your target location as possible.

Target upgrade rate bidding strategy

This strategy is by far the most aggressive towards your competitors. Indeed, by selecting this option, you will ask Google to set up bids that will allow you to always position yourself above a targeted area.

Of course, the target location cannot be guaranteed since, in addition to the bids, it takes into account the quality of your ads. So, when you choose this bid strategy, make sure that your ads comply with all the rules put in place by Google and are optimized to have a high quality score.

This strategy can also be expensive if your competitor sets up a counter-strategy on your domain. The escalation of bids can be endless. It is therefore recommended that you do not choose this strategy if your ads are naturally positioned between 1st and 4th place, that is, at the top of the Google search results.

Manual bid strategy: master the game

As mentioned earlier, automated bidding strategies can be interesting for people who have little time to spend on their campaign. If, on the contrary, you want to play with the various settings of Google AdWords to get the best results possible, we recommend choosing the manual cost-per-click (CPC) bidding strategy. This strategy is often used by SEM experts in specialized agencies because it allows greater flexibility, precision and responsiveness.

This strategy will allow you to manually set your bids based on your daily budget and the different metrics available. Of course, the main goal of this strategy is to get a cost per click that suits you the most. You will also be able to track conversions and their cost. This way, you’ll easily identify profitable keywords and ads and adjust your bids accordingly.

CPC optimizer (eCPC)

The CPC optimizer is offered alongside the manual CPC bidding strategy. It will combine your manual bidding with an automated bidding strategy such as Target CPA or Target ROAS.

The optimizer will allow Google to adjust your bids based on its analytics. It will help you to always obtain more conversions for the same or lower cost, while respecting your manually defined max CPC.

Conclusion

Choosing an appropriate bid strategy isn’t always easy. As with any communication campaign, digital or not, it is important to define a specific goal. This goal will help you understand which variables and metrics are important to you so you can choose the optimal bidding strategy.

Are you still slightly lost and want support in setting up your Google AdWords campaigns? Don’t hesitate to contact our SEM experts!

 

Google AdWords: Which bidding strategy should you choose for effective campaigns?
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