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What Is a Bidding Strategy and How To Use Them

Automated advertising is an essential tool for all modern businesses. But if you want to use Google AdWords to launch a Google Ads campaign, you must know how to leverage bidding strategies wisely. 

The right bidding strategy can make or break your digital marketing campaign and significantly affect your marketing budget.

Today, let’s break down bidding strategies and how to use each type.

What Is a Bidding Strategy?

A bidding strategy is a specially designed and automated ad campaign with Google AdWords and similar PPC platforms. Consider a bidding strategy as a set of parameters and settings to help you reach specific advertising goals.

For example, if you want to maximize your click-through rate (CTR), you could put your ads on Google AdWords, then tell AdWords to prefer clicks as much as possible. 

In response, Google would adjust things like:

  • Maximum bid price.
  • The kinds of ads included in the campaign.
  • Where your ads are posted.

It would do all of that to help you achieve your stated goal. Bidding strategies make it easy for you to achieve specific marketing objectives, even if you don’t have a degree in online marketing or don’t know how to leverage each tool on a platform by yourself.

The right smart bidding strategy will help you:

  • Practice ad optimization.
  • Maximize your daily budget by CPM (cost per thousand impressions) or other metrics.
  • Make the best ad placements.
  • Set bids automatically and competitively for your target cost.

What Are the Different Types of Google Ads Bidding Strategies?

There are several different types of bidding strategies you can use for your Google ads. 

Here’s a breakdown of the most critical bidding strategies and what they do:

  • Maximize clicks strategy, which sets your ad bid prices to acquire as many clicks as possible within your defined budget. This is much more effective than manual CPC bidding in most cases.
  • Target impression share strategy, which automatically sets your bids to show your advertisements at the tops of target pages or anywhere on Google search engine results pages (SERPs).
  • Target CPA strategy, which sets your bids to acquire as many conversions as possible. To enact this strategy, you must establish a target cost per acquisition or cost per action (CPA). An “action” can include clicking on an ad, signing up for an email newsletter, or purchasing.
  • Target ROAS strategy, which sets your bids to acquire as much conversion value as possible. You must establish a target return on ad spend (ROAS) to enact this strategy.
  • Maximize conversions, which helps you optimize toward conversions. Note that conversions don’t have to be purchases. They can also be subscriptions, sign-ups for loyalty programs, or anything else you specify.
  • Maximize conversion value, which sets bids to maximize the conversion value for a marketing campaign without overspending your budget.

Other strategies, like enhanced CPC (ECPC), cost-per-view (CPV), and conversion tracking, are also available. 

Regardless, all use machine learning to get you the highest number of conversions possible while minimizing the average cost of your ads to achieve campaign goals. Some strategies (such as maximizing video views and attribution measurement) are best for advanced goals.

How Do You Start a Bidding Strategy?

As noted earlier, you can only use bidding strategies within Google AdWords. Getting a bidding strategy up and running is relatively straightforward.

First, set up a Google AdWords account if you haven’t already. Then, simply navigate to the Campaigns or Ad Groups pages, depending on the bidding strategy you wish to utilize. 

Most bidding strategies are on the Campaigns page, which makes sense because you can adjust other marketing campaign elements from this hub.

How Do You Use Bidding Strategies?

As you can see from the above breakdown, there are many different bidding strategies. You can determine which bidding strategy is best for your needs – and use that bidding strategy most successfully – by following a few key steps.

Determine Your Advertising Goal

First, determine your overall advertising goal. Do you want to spread brand awareness? In that case, a bidding strategy focusing on spreading your ads far and wide might be better than one focused on conversions.

Alternatively, if your marketing goal is to increase your conversion rate as much as possible, you'll want to prioritize an ad bidding strategy that maximizes the click-through rate, even if it increases the cost per click you pay for each advertisement.

There’s no right or wrong answer here. You just need to ensure your goal is aligned with your chosen bidding strategy.

Figure Your Maximum Budget

Next, it’s crucial to determine the maximum amount you will spend on marketing. That’s because Google will implement your chosen bidding strategy up to the specified amount. 

Once you reach that amount, Google will stop spending, preventing you from using too much cash on your marketing efforts.

Note that your entire budget can impact how many ads Google will place on your behalf. For example, if you follow a high CPC ad bidding strategy, Google can only place a handful of advertisements before you run out of marketing budget.

Test and Optimize Based on Short-Term Results

Of course, it may also be wise to try a few different bidding strategies and record the historical data or results you receive. Once you analyze that data, you can optimize your strategy based on those short-term results.

In other words, if you aren’t sure which bidding strategy is perfect for your needs or your marketing goals, try a few quickly. 

Analyze which one does the best or provides the most bang for your buck. Once you know that, you can spend more or the rest of your marketing budget on the most successful strategy.

What Are the Benefits of Bidding Strategies?

Why would brands use them so frequently if bidding strategies are automatic and give up some control over your marketing?

While it’s true that Google doesn’t always do a perfect job, and you do have to give up control over your marketing materials, there are many benefits to leveraging bidding strategies occasionally.

For starters, bidding strategies free up that time so you can focus on other elements of running your business, including making other marketing materials. Furthermore, bidding strategies are often more cost-effective or successful if you don’t have a degree in marketing or a lot of marketing experience.

Google’s algorithms have a wealth of experience and can fill in for a marketing expert on your behalf. 

In other words, if you run a small business but don’t know how to make the most of your limited marketing budget, you can bet that Google will do a better job than you if you don’t have any experience.

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As you can see, a bidding strategy is a set of predefined parameters Google AdWords uses to accomplish your goals and maximize your marketing budget. With the right bidding strategy, Google will set ad bid amounts based on user targeting, context, and other factors.

While you can't use automated bidding strategies for billboard ads, AdQuick can help you master your OOH marketing campaign

With our intuitive platform, you can create and enact the perfect out-of-home media strategy for your brand's needs. On top of that, we now accept crypto, making it easier than ever to use our software. Try it today.


Determine a bid strategy based on your goals | Google Ads Help

About Automated Bidding | Google Ads Help

ROAS (Return on Ad Spend) - Important eCommerce Metrics | Corporate Finance Institute

Average CPA: Definition | Google Ads Help

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