We’re often asked what the best bidding strategy is in PPC – but really, this will depend on things like your business, marketing budget, audience and campaign goals. PPC bidding strategies are broken up into three primary categories:
- Smart bidding
- Auto bidding
- Manual
We are going to take a quick look at some of the most common bidding strategies, using these three steps:
- Objective
- Function
- Pros and cons
We’re going to help you work out what is best for your business depending on your digital marketing budget and PPC goals. We’ll start with CPA:
Target Cost Per Acquisition (CPA)
Objective
Spend your daily budget while driving as many conversions as possible at the set CPA.
Function
This bidding strategy wouldn’t differentiate between conversions – meaning they could be high or low value. It depends on your requested CPA, not the value of a conversion. This means you can end up with conversions with both a higher and lower CPA.
There isn’t one official conversion threshold – however most campaigns need about 60 days of accurate conversions coming in around your CPA.
Pros
- If you have a verified account and all of your conversions are worth the same – this can be good when in maintenance mode.
- Google no longer asks for a set number of conversions in a 30 day period to run.
Cons
- The ad network will miss out on potential prospects if they are not going to bring your conversions at your requested CPA. This means volume could be impacted.
- This strategy could give you a high risk of underbidding or underspending. This will depend on your other PPC bid management settings (budgets, targets etc). We suggest using this once your PPC campaign has been up and running for a while.
- We mentioned this strategy cannot differentiate between conversion values – this means that depending on your objectives, you might need to create more campaigns with unique budgets.
Target Return on Ad Spend (ROAS)
Objective
Spend your PPC budget only on users who have the highest chance of converting at the highest possible value.
Function
This is often a popular bidding strategy in PPC because it essentially focuses on conversion value as opposed to volume. You will have to set up conversion values for each individual conversion – which we recommend doing through Google Analytics.
In this case, Google does require a minimum of 15 conversion in a 30-day period. We suggest waiting until you have more than this to be on the safe side, i.e. 30-50.
Pros
- Your PPC budget is invested where it should bring back the most results – it is all about balancing volume and return on investment (ROI).
- This strategy no longer requires hundreds of conversions for it to run, which makes it more accessible.
Cons
- Although this can drive great results – it will require a lot of PPC and business operations knowledge to give the right conversion values. So, this could be a barrier for new businesses.
- It can’t be used immediately because of the conversion requirement.
- This strategy can under-spend or overspend if the ROAS goal, campaign budget, and keywords aren’t correctly aligned.
Maximise Clicks
Objective
Understand how much your keywords could cost while driving as many clicks on your PPC ad as possible.
Function
This bidding strategy will work around the volume and number of clicks, rather than driving conversions. You can set a bid cap – which we would suggest doing as 10 percent of your daily budget. You have the option to leave this open, but we’d definitely recommend using a cap.
Tip – when using this strategy, remember to uncheck Search Partners and Display in Search campaigns. Also, stick to one focus per campaign – for example, don’t mix branded and non-branded.
Pros
- You won’t be required to have any conversions to run.
- A great start for a campaign in terms of driving brand awareness.
- Learn more about your keywords and their costs.
Cons
- You’ll be focusing on cheaper volume over profit. This means there is a chance you could miss out on higher value conversions.
- If your keywords are too expensive, you might even end up with no volume / clicks.
Maximise Conversions
Objective
We’ve covered maximising clicks – but maximise conversions will focus on driving as many conversions as possible.
Function
The goal will be to drive as many conversions as you can within your PPC budget – without focusing on things like conversion action or repeat rate.
We’d recommend using this bidding strategy if you are already confident when it comes to your conversions (i.e. only include higher value conversions).
Pros
- Can work as a way of balancing value and volume.
- You won’t need a conversion threshold.
- If each conversion is worth the same amount then it can be effective for consistent growth.
Cons
- This strategy will be spending budget with no consideration for return on ad spend (ROAS).
- You can’t run this strategy if you don’t have any conversion actions set up already.
Target Impression Share
Objective
Achieve your desired impression share in your chosen location (usually top) within your digital marketing / PPC budget.
Function
Target impression share will ask advertisers to choose a percentage goal and location. Each option will tell the Google algorithm key things about your preferences, and then it will adjust bids accordingly. So, your ad will be either shown at the absolute top of the page, on the top of the page or anywhere on the page of Google’s search results.
Pros
- Campaigns that require high impression share, such as branded, can be put on “autopilot”.
- Great for mobile-targeted campaigns to secure ideal placements.
- Focuses on awareness and reach – which could be helpful for newer businesses.
Cons
- The focus is not on clicks or conversions.
- If keywords or targets are not aligned, it could lead to less or no volume.
- Has the potential to increase your bids beyond profitability.
Which strategy is the best?
The strategy you will choose and benefit from depends on your unique objectives and what matters to you as a business. For example, brands who want to raise some initial awareness will use a different strategy to a more established business using PPC to drive more specific actions.
If you have any questions about different bidding strategies or anything PPC related – just get in touch.