What’s the Best PPC Bidding Strategy?

What's the Best Smart Bidding Strategy in Search?

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"I am confused about all the bidding strategies in Google ads?" 

"What's the best bidding strategy?" 

Just like everyone who has a Google Ads account, I often have this confusion and anxiety to choose the perfect bidding strategy. But let's be real honest here: there's no one-fits-all bidding strategy, it always depends on your campaign characters.  In this article, I will analyze each available bidding strategy and list out their pros and cons. Hope this will clear your mind and help you experiment, boost and rocket your PPC campaigns. 

Keep in mind, with all the fancy options out there, and only manual bidding fully embraces manual input.

The current 7 bidding strategies can be allocated into three core categories:

• Smart bidding: Conversion-focused.
• Auto bidding: Function-based.
• Manual bidding: Human-required.

Without further due, let's break it down one by one.

Portfolio Biding Strategy

A portfolio bid strategy is basically a tool that you can set up at an account level. Then you can assign to different campaigns in the account to share that bidding strategy. 

You can find it here

Example:

You set up three campaigns using target CPA bidding strategy, and you want the same target CPA to assign to these campaigns. You can do it in the portfolio bid strategy. The math is simple: 

1. Add the target CPA rule in the portfolio bid strategy;
2. Assign it to related campaigns;
3. Then bulk edits the CPA by editing the portfolio bid strategy.

What's the benefit?

• The combined reporting for all campaigns that are sharing the portfolio bid strategy is convenient and efficient.
•  It allows you to set a maximum cost per click. (Very Important)

With that in mind, exploring the maximum cost per click with a target CPA bidding strategy can prevent Google from exhausting all your budget for some unrealistic clicks. As such, use the portfolio bid strategy when it comes to target CPA campaigns.

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What're the cons?

I don't recommend using maximize conversions and maximize conversion value bid strategies. I barely see these strategies performing in campaigns. Furthermore, you cannot set a maximum cost per click limit with either of these new strategies - one more reason not to.

Target CPA 

Suitable for legacy campaigns but not ideal for exploring new markets/services, or for brand new accounts. 

Use for Generic search terms campaign where all comperitors are bidding for. (middle funnel). Target CPA is compatible for Device bid adjustment.

Update as of April 2021: The Target CPA (tCPA) Smart Bidding strategy will be bundled with the Maximize Conversions bid strategy. Maximize Conversions will have an optional tCPA field.

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The Target Cost-per-action strategy allows Google Ads to spend the set daily budget, automatically sets bids while driving as many conversions as possible at the requested CPA. Some conversions may cost more or less than your target.

• Target CPA can be set at either the campaign or portfolio level, which means there will be no individual keyword-level bids for you to adjust.
• At least 60 days of conversions tracking & campaign running are recommended to hit the CPA.
• At least 15 conversions are suggested for the learning phase.
• Google no longer requires a set number of conversions in a 30-day run.
• Make sure your CPA is slightly higher than your average CPA/Google suggested CPA for a better machine-learning. Then slowly bring it down over time to your target CPA.

What're the cons?

• Volume: Volume will be impacted as the ad network passes up potential prospects to bring you conversions at your requested CPA.
• Time: It takes time for your campaign to learn before the automated bidding. Don't under-bid/spend
• Tracking: It needs conversion tracking working.

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Target ROAS

Suitable for campaigns that target to refined prospects 

Update as of April 2021: Target ROAS (tROAS) Smart Bidding strategy will be bundled with the Maximize Conversion Value bid strategy. The Maximize Conversion Value will have an optional tROAS field. Target ROAS is compatible for Device bid adjustment.

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Target return on ad spends (ROAS) bid strategy allows Google to spend the daily budget, automatically set bids while driving as many conversions as possible to reach your target ROAS.

• Recommended ROAS setting: 300%. Then slowly bring it up over time of your target ROAS. My ideal ROAS is 700%-800%
• I recommend waiting until at least 30-50 conversions are generated and a 30-days campaign-running before starting the target ROAS. 
• I don't like set bid limits (minimums and maximums) at the campaign or portfolio levels. The system will auto adjust the CPM and CPC to meet the target. Meanwhile, improve your CTR helps. Why? The increasing CTR helps in bringing down CPA, CPC and improve your ROAS (refer to the following equations)

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Maximize Clicks

Suitable for brand campaigns and highly-converted conversion campaigns.

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Google will work to get as many clicks as possible while spending your daily budget, it pivots clicks over conversions. This bid strategy works hard to exhaust your entire daily budget each day.

• Always set a bid cap (10% of the daily budget) and keep an eye on your average max CPC. 
• Instead of directly changing the bid strategy, using experiments & copy the campaign to test the maximize clicks.
• Uncheck Search Partners and Display in Search campaigns. They are low-value placements.
• Povit your Ad group, keywords focus. That means don't put low-bid keywords(like branding) mix with high-value keywords.

What're the cons?

Due to the goal is to click, Google will automatically look for cheaper clicks to reach your strategy instead of optimizing for conversion. How to solve this? Keep monitoring the average CPC and adjust your budget and bid cap. Or simply shift it back to conversion target. strategy

Maximize Conversions

Use it for the following occasions: The initial stage for data collecting | The brand terms campaign (Bottom Funnel). Maximize is compatible for Device bid adjustment.

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Drive as many conversions as possible. Fully automated and no manual action is needed.

• I don't recommend this strategy as it focuses on the volume of conversion instead of the profit.  It exhausts the budget with no consideration for ROAS.
• For profitability or efficiency, I highly suggest you utilize Target CPA or Target ROAS.

What're the cons?

It's not recommend using the impression share “Lost IS (budget)” column in Google Ads with Maximise conversions because the column is incompatible with the bid strategy. Maximise conversion or Maximise conversion value bid strategies are designed to spend the full daily budget, and are ”limited by budget” by design as campaigns are considered constrained by the budget you set. Whereas the budget simulator accounts for this, the “Lost IS (budget)” column does not currently account for this, and uses a different definition to account for lost impressions.

I don't recommend using maximize conversions and maximize conversion value bid strategies. I barely see these strategies performing in campaigns. Furthermore, you cannot set a maximum cost per click limit with either of these new strategies - one more reason not to.

Target Impression Share

Not recommended. Maybe only use it at the beginning of the branded/competitor campaigns to figure out the CPC, CPA and collect data.

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There are three placements you have to bid for with Target Impression Share strategy:

• Absolute Top of Page
• Top of Page
• Anywhere on the Page

Just like maximum clicks or maximum conversion, this strategy potentially exhausts your daily budget if there's no control. With that in mind:

• Always set a max CPC bid to ensure no over-paying for any individual click. 
• Starts with the low bid to with the 10% of bid testing gap. If the impression share was pretty low already, try to increase by 20%.
• Choose at least 60% at the top of the page.
• Choosing anywhere on the first page can cause " false positives" on impression share + auction price.
• Let the campaigns requiring high impression share fly freely (i.e. branded).
• Not recommended for portfolio bid strategy.

Manual Bidding

Ad manager sets the bids manually at the keyword level, and the bids stay where they are until the advertiser changes them.

Advertisers have access to the following bid adjustments:

• Device
• Audience
• Location
• Time

Bear in mind, make it complementary between the bid, the less and the bid adjustment—the higher the bid, the lower of bid adjustment and vice versa.

• It’s important to note most bid adjustments are only available as exclusions or will adjust the Target CPA/ROAS on auto/smart bidding. With that in mind, be sure to check your adjustments when switching the bidding strategies (e.g. Device bid adjustments for target CPA allow you to modify the value of your CPA target, rather than the bids themselves.).

So Which Is the Best?

So far the available bidding options for campaign level and portfolio bid strategies are target CPA (recommended with max bid cap), target ROAS (recommended with max bid cap), maximize conversions and maximize conversion value (Not recommended unless for data collecting), and then maximize clicks and target impression share (Not my first choice. Can be used to rump up new campaigns). 

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What would I usually do?

#1:  Max clicks with bid caps and target impression share in the first 30-60 days of a campaign.

#2: Manual bidding for an experiment

#3: Data collecting and analysing

#4: Switch to Target ROAS or CPA with maximum bid cap.

#6: Considering Max Conversions if the conversions are "high-ticket" conversion or event (E.g. a purchase leads to a 300% profit margin)

P.S. After April 2021, what advertisers have known as Target CPA and Target ROAS will be grouped under the Maximize Conversions and Maximize Conversion value bid strategies, respectively.