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Google AdWords Bidding Strategies: The Complete Guide

Lisa Raehsler
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While bidding strategies have evolved over time, there are several core bidding types available in Google AdWords. Now with Flexible Bidding Strategies it may be a bit confusing as to what type of bidding is available and how it works. Cost-per-click (CPC) bidding has never been so advanced – and so complicated.

Manual CPC

This is the classic setting for having total control over bids with a focus on driving click traffic. AdWords will take the ad group default bid first, unless a different bid is manually specified at the keyword level.

Select "I'll manually set my bids for clicks".

Manual CPC

Automatic CPC

In this setting, advertisers focus on driving click traffic but give AdWords control over individual CPC bids. Set a daily budget and AdWords automatically adjusts your bids with the goal of getting the most clicks for the budget. With automatic bidding, AdWords does all the work to get the most clicks.

There is also the option to set a CPC bid limit. Setting a limit can help control costs, but might also potentially limit clicks.

Select "AdWords will set my bids to help maximize clicks within my target budget".

Auto CPC

Enhanced CPC

This bidding option is for the conversion-focused advertiser. Conversion tracking must be enabled, so that based on conversion tracking data, AdWords will automatically increase or decrease CPC bids to drive most conversions.

Bids can be raised up to 30 percent for clicks that are more likely to lead to conversions. Bids are lowered for clicks less likely to convert.

Enhanced CPC

CPA Bidding

With a focus on conversions at a specific cost-per-acquisition, use CPA bidding. This is also known as Conversion Optimizer.

Advertisers who want to target a specific cost per acquisition/conversion must have at least 15 conversions in 30 days to use this. The conversions history allows AdWords to predict future conversions.

Because Conversion Optimizer automatically applies its own bid adjustments, it isn't compatible with the new enhanced campaigns bid adjustments across days, times, locations, and devices (except for mobile opt-out at -100 percent.). Display bids also don't work. If you turn on Conversion Optimizer with existing bid adjustments, they will simply be ignored.

There are two advanced options for this bid type: Max CPA and Target CPA. The Target CPA is the average CPA you are willing to pay, and Max is the maximum per conversion. The Maximum CPA is scheduled to be discontinued in 2014.

Google recommends a CPA, based on history, which can be used or advertisers can set their own.

CPA Bidding

Flexible Bid Strategies

Allows automated bidding strategies to be more customized and flexible. Automated bid optimizations can be applied to campaigns, ad groups, and keywords.

More options compared to enhanced CPC and Conversion Optimizer options that were previously available and also allow you to mix and match bid rules across campaign and ad groups.

There are five types of flexible bid strategies:

  1. Maximize clicks: This is a flexible version of the Automatic CPC bidding strategy.
  2. CPA bidding: This is a flexible version of Conversion Optimizer used in the target CPA (average CPA) capacity.
  3. Enhanced CPC: Flexible version of the existing enhanced CPC capability.
  4. 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).
  5. 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.

AdWords' shared library houses and provides reporting for each strategy in detail.

How have you been navigating through bidding strategies? Have you found a strategy that has proven itself to your business?


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