12 Google Ads Bidding Strategies (+ When to Use Each)

Well-planned Google Ads bidding strategies help your paid search ads reach the right audience and achieve your goals at the lowest possible cost. Read on to find out which strategy is right for you.

The goal of online ads shouldn’t just be to drive a positive return on investment. It should be to maximize ROI.

After all, wouldn’t it be better if your $1 investment delivers $20 in return vs. just $2?

One of the ways you can achieve this: effective bidding.

Almost every major search and social media ad platform has the concept of bidding. Associate Director of SEM at HawkSEM, Rachel Corak, puts it this way:

“Using an effective bid strategy is key to running a well-optimized campaign. Understanding the nuances between bid strategies and when to apply them can make all the difference in maximizing ROI.”

The HawkSEM team leverages real-time data to continuously refine our bids. This ensures that every dollar of our clients isn’t just spent but strategically invested to yield the highest possible returns.

In this article, we’ll focus specifically on Google Ads bidding – and what strategies you can use to get maximum ROI from every dollar spent.

Let’s start with the basics.

What is Google Ads bidding?

Bidding is how you tell Google Ads the maximum amount you are willing to pay for a click on your advertisement.

Your bid competes with others whenever your ad has the opportunity to appear as a search result or on a site within Google’s Display Network (which features display ads).

A higher bid may improve your ad’s visibility.

For example, if you set your bid at $1, that means you’ll pay up to $1 for each click your ad receives.

Here are two things to note:

• The amount you bid is the maximum you’ll pay per click, but often, you’ll pay less. Google charges you just enough to outbid the competitor below you, not your maximum bid.
• Sometimes, you can pay less than your competitors and still have your ad appear higher. This is because Google also considers your ad’s quality and relevancy to the user’s search query. (Psst… we’ve covered this in detail in another article).

How does bidding work?

Google Ads uses an auction-time bidding process every time someone searches or visits a site where ads can be shown.

Here’s what happens: if your ad relates to the keywords or content the user is interested in, it enters the auction.

Your bid (along with other factors) helps determine if your ad will appear and where it will rank.

Google calculates your ad’s rank based on your bid and how closely your ad matches what the user is looking for.

The highest-ranked ads appear in the most visible spots.

This process — which takes milliseconds — ensures that users see ads relevant to their needs and that advertisers have a fair chance to show their ads.

3 types of bidding

You can use different methods to set your ad spend. Each offers a unique way to manage your bids, depending on your single campaign goals and how much control you want over your spending.

Here are three types of bidding on Google Ads:

• Manual bidding
• Automated bidding
• Smart bidding

What is manual bidding?

Manual bidding lets you set your own bids for specific ad groups or keywords.

This method gives you direct control over your advertising costs. You decide how much you will pay per click on each ad.

For example, if you observe that your ads perform better on weekends, you might increase your bids during that time to capture more visibility and traffic.

What is automated bidding?

Automated bidding lets Google manage your bids. It automatically sets bid amounts based on your campaign goals, such as increasing website visits or enhancing ad visibility.

This system uses machine learning to estimate the most effective bid for each auction, which optimizes your chances of achieving your advertising objectives without manual intervention.

For example, suppose your goal is to increase the number of people who see your ad within a certain budget. In that case, Google will dynamically adjust your bids to maximize your ad’s visibility without exceeding your spending limit.

What is smart bidding?

Smart bidding is a subset of automated bidding focused on conversion-based goals like generating leads or sales.

It uses sophisticated machine learning algorithms to adjust your bids in real-time. It considers a range of signals that indicate the likelihood of a conversion.

Smart bidding includes options like Target CPA (Cost Per Action), where Google aims to secure as many conversions as possible at or below your specified cost per action.

12 bidding strategies on Google Ads

There are different strategies for both manual and automated bidding. Let’s look at them individually:

1. Manual CPC
2. Manual CPM
3. Maximize clicks
4. Enhanced CPC
5. Target impression share
6. Automated CPM
7. Maximize conversions
8. Maximize conversion value
9. Target CPA
10. Target ROAS
11. Portfolio bid strategies
12. Shared budgets

1. Manual CPC

Manual CPC (cost per click) bidding allows you to define the maximum amount you want to pay for each click on your ads.

This gives you direct control over how much you spend on each ad interaction. You set bids and determine your own max CPC for each ad group or keyword.

For instance, if you notice that certain keywords bring more valuable traffic, you can allocate more budget to these keywords to maximize their potential.

Pros

• Total control over bid amounts
• Easier to manage costs directly
• Can lead to lower spending if managed well

Cons

• Requires constant monitoring and adjustment
• Time-consuming to optimize effectively
• Risk of overbidding and increased costs

When to use

You can use manual CPC bidding when you need precise control over how much you’re spending on each click.

It’s helpful if you know which keywords (or times of the day) bring the best results in your search campaigns and you want to focus your entire budget thereby setting a maximum CPC for each keyword or ad group.

Further reading: 22 Ways to Lower Your Cost Per Click on Google (+Checklist)

2. Manual CPM

Manual CPM (cost per mille) bidding lets you set a fixed price for 1,000 impressions of your ad.

This strategy is effective for increasing brand awareness by ensuring your ads are seen by a large number of people.

It’s particularly useful when you want to broadcast your message widely without targeting specific user actions like clicks or conversions.
Pros

• Good for building brand visibility
• Fixed costs for impressions
• Effective control over ad exposure

Cons

• No guarantee of click-through or conversions
• Can be less efficient in terms of budget usage
• Not targeted toward direct response objectives

When to use

Manual CPM is ideal when you want to increase the visibility of your brand or a new product without focusing on immediate clicks or conversions.

It works well for campaigns aimed at getting your name out there to as many people as possible.

Automated bidding strategies

3. Maximize clicks

It automatically adjusts your bids to secure the most clicks possible within your set budget.

This strategy dynamically changes bid amounts based on real-time data to efficiently drive traffic to your website.

It excels in competitive niches where capturing a high volume of site visits quickly is important, such as during special promotions or when introducing new product lines to the market.

Pros

• Automates bid management for operational efficiency
• Focuses on achieving maximum website traffic
• Ideal for gaining broad exposure with minimal manual effort

Cons

• May increase costs by not prioritizing traffic quality
• Higher risk of spending without corresponding returns
• Potentially attracts low-quality clicks that do not lead to conversions

When to use

You can use ‘Maximize Clicks’ when launching new products or during promotional events to quickly draw attention and visitors.

It is also suitable for testing the market response to new offerings or expanding your audience base in new geographic regions.

4. Enhanced CPC

ECPC fine-tunes your manual bids by raising them for clicks likely to convert and lowering them for less promising ones.

This strategy combines the precision of manual bidding with the insights of automated algorithms, which enhances your ability to drive high-quality conversions efficiently.

It works well in campaigns with established conversion tracking, where it aims to optimize expenditure towards high-potential clicks.

Pros

• Enhances conversion rates through smart bid adjustments
• Combines manual control with automated efficiency
• Adapts to conversion trends to optimize spend

Cons

• Fluctuating ad spend may challenge budget management
• Requires accurate conversion tracking to be effective
• Involves costs for clicks that may not always convert

When to use

You can use ‘Enhanced CPC’ in campaigns where you’re familiar with the conversion benchmarks and need to maximize efficiency without fully automating bid management.

This strategy is beneficial for businesses adjusting to market conditions or refining their focus on specific products or services that have different conversion success.

5. Target impression share

Target impression share shows your ad on the search page as often as possible within your budget. It helps you reach a specific percentage of times your ad is seen relative to the total available impressions it could get.

This is useful if your goal is to dominate search results for certain keywords (especially in competitive industries).

Pros

• Helps increase your ad’s visibility
• Good for maintaining a strong presence in search results
• Allows you to target the top of the page, the absolute top of the page, or anywhere on the results page

Cons

• Can become expensive because it prioritizes visibility
• May lead to higher spending with less focus on conversions
• Requires careful monitoring to prevent budget overruns

When to use

You can use this strategy when you want your ad to be seen as often as possible, such as for important campaigns where brand visibility is key.

It’s also useful if you are trying to outperform competitors for specific search terms.

Further reading: 7 Easy Ways to Improve Impression Share (+ Common Challenges)

6. Automated CPM

Automated CPM optimizes your bidding to maximize the number of impressions your ads get.

Google automatically adjusts the bid to ensure your ads are displayed as often as possible within your budget.

Within Automated CPM, there are specific variations that focus on different aspects of ad visibility:

• vCPM (viewable cost-per-thousand impressions): This variation ensures that you pay only for ads that are actually seen by users, not just served. A viewable impression counts when at least 50% of your ad appears on screen for one second or longer (for display ad) and two seconds or longer (for video ad).
• Target CPM: This allows you to set a target cost for 1,000 impressions and Google will optimize your bids to meet this target price while attempting to maximize the number of impressions.

Pros

• Enables broad exposure across campaigns
• Automated bid adjustments save time and effort in campaign management
• Variations like vCPM ensure you pay for viewable impressions only, enhancing ad effectiveness

Cons

• Might lead to higher costs without a corresponding increase in clicks or conversions
• Requires monitoring to ensure impressions are quality and contribute to campaign goals
• Less control over specific user interactions compared to more conversion-focused strategies

When to use

This strategy is suitable for campaigns where your primary goal is to build awareness at scale.

It works well for large-scale campaigns aiming to reach as many viewers as possible, such as new product launches or brand announcements.

7. Maximize conversions

Maximize conversions automatically adjusts your bids to get as many conversions as possible within your budget.

This strategy analyzes current data and past performance to place effective bids at each auction, aiming to turn more viewers into customers.

It’s useful for Google Ads campaigns focused on increasing actions like sales, sign-ups, or other desired outcomes.

Pros

• Increases the number of conversions by using effective bid strategies
• Saves time by managing bids automatically
• Works well with real-time data to capture more conversion opportunities

Cons

• Needs a good amount of historical data to function optimally
• Requires accurate setup of conversion tracking
• Could result in higher costs if not carefully watched

When to use

Maximize conversions is best for targeted campaigns like a sign-up drive for a new service or a limited-time offer on a product.

It’s effective when your priority is to increase specific user actions, such as completing purchases or registrations. It allows you to focus more on outcomes and less on managing bid details.

Further reading: What are Google Ads Enhanced Conversions? + Setup Guide & Expert Tips

8. Maximize conversion value

Maximize conversion value aims to generate the highest possible revenue from the conversions your ads receive.

It adjusts your bids to focus on getting sales or leads likely to bring in the most money.

This strategy evaluates each potential conversion’s value and targets those that offer the highest returns.

Pros

• Focuses on earning higher revenues per conversion
• Automatically adjusts bids for high-value opportunities
• Helps optimize your return on ad spend

Cons

• Might increase the average cost per conversion as it seeks more valuable leads
• Requires detailed input on the value of different conversions
• Needs well-set conversion tracking to be effective.

When to use

Maximize conversion value bidding is ideal for special promotions or sales events in an online store where you want to push high-margin products, such as luxury goods during a holiday sale.

It helps ensure that your advertising budget is focused on products that will yield the highest revenue per sale.

9. Target CPA

Target CPA bidding lets you decide how much you’re willing to pay for each conversion, such as a sale or a sign-up.

This strategy automatically adjusts your bids to help you get as many conversions as possible at your set price.

It’s different from just aiming for more conversions because it keeps your budget in check by focusing on the cost of each conversion.

Pro tip: Remember, the “A” in CPA here stands for Action and is different from cost per acquisition. It includes a broader range of actions beyond just acquisitions.
Pros

• Helps control the cost of each conversion
• Optimizes bids to achieve a consistent cost per conversion
• Useful for budget management and predictable spending

Cons

• May reduce exposure if the set CPA is too low
• Requires historical conversion data to set a realistic CPA
• Could limit the volume of conversions if CPA targets are very aggressive

When to use

Target CPA is great if you know how much you want to spend on each conversion.

For example, if you can afford to spend $10 for each new subscriber, use this strategy to keep costs within your budget while trying to gain as many subscribers as possible.

10. Target ROAS

Target ROAS (return on ad spend) is a smart bidding strategy that lets you set a goal for the revenue you want to get (target return) for every dollar you spend on ads.

It tweaks your bids to maximize revenue based on your specified return target.

This is useful for ensuring that your online advertising campaigns lead to measurable financial results.

Pros

• Aims to maximize revenue relative to ad spend
• Bids adjust to achieve specific revenue goals
• Connects ad spending to business outcomes

Cons

• Requires detailed setup and precise revenue tracking
• May overlook smaller, yet profitable conversions
• Needs extensive data to optimize effectively

When to use

Target ROAS bidding works well for online stores that understand their product margins and need to ensure that ad spend translates into profitable sales.

Use this strategy when you want your ad spend to directly contribute to revenue goals, such as ensuring that each $1 spent on ads brings in at least $5 in sales.

Other bidding strategies

Other different bidding strategies can tailor your ad campaigns to meet specific financial or marketing goals:

11. Portfolio bid strategies

Portfolio bid strategies are useful when you want consistent results and metrics across multiple campaigns, whether they are search campaigns, display campaigns, or even video campaigns focused on driving video views.

These allow you to group several campaigns under a single bid strategy, which Google uses to optimize your objectives across all involved campaigns.

They can help you meet your overall performance targets more efficiently.

12. Shared budgets

If you manage multiple campaigns, shared budgets let you distribute your daily budget flexibly across them based on their performance.

This is helpful if you’re unsure which campaigns will perform best. And you want to ensure no opportunity is missed due to budget constraints.

Or when you’re running campaigns with different bidding strategies, such as manual CPC bidding for your branded keywords and Target CPA for your generic keywords.

How to determine which strategy is right for you

This depends on your campaign goals, budget, and the time you can dedicate to managing your ads.

If you’re setting up a new campaign, consider these questions to choose the right bidding strategy:

• What is my primary goal for this campaign? If it’s maximizing clicks on the Google search results page, consider Maximize Clicks. Want to control cost per conversion? Look at Target CPA. If you’re focusing on video campaigns and want to optimize for cost-per-view, CPV bidding might be the right choice.
• How much am I willing to spend for a conversion? If you have a specific cost in mind, Target CPA might be right for you.
• Do I need to maximize the return on each dollar spent? If yes, then Target ROAS could be the ideal strategy.
• Am I trying to gain visibility or drive specific actions? CPM or Target Impression Share strategies are suitable for visibility. For actions, look at Maximize Conversions or Enhanced CPC.
• How much time can I commit to managing bids? If you prefer a set-it-and-forget-it approach, automated strategies like Maximize Conversions or Maximize Clicks may be better.

“While automated bidding strategies rely on machine learning, our team focuses on strategically understanding when to apply different bidding strategies,” says Corak.

“It’s also crucial to refine and optimize these strategies over time. This can mean adjusting ROAS or CPA targets, or even changing bidding strategies altogether when the campaigns have acquired enough data to enhance further.”

Choosing the best bidding strategy can be tricky since more than one might fit your exact use case.

For example, if you’re running display ads across multiple placements, you might want to use a combination of manual CPC bidding for your top-performing placements and an automated strategy like Target CPA for the rest.

To drive better ROI, you need the right tools and expert guidance. Consider partnering with specialists to boost your advertising results.

Further reading: PPC Bid Management: A Complete Guide (+ 8 Proven Strategies)

Hire HawkSEM for effective bidding and campaign management

HawkSEM is a trusted digital marketing agency that works with brands like Microsoft, Nike, Honda, and Verizon.

With a multidisciplinary team of ad specialists, we offer comprehensive online advertising services, covering all search and social media platforms.

Our approach emphasizes continuous, hands-on management of every ad campaign. We adjust campaigns based on real-time data, ensuring campaigns are responsive and never set to auto-pilot.

Close oversight by dedicated experts and proactive optimization help us deliver consistently improved results for our clients.

For instance, 686, a leading apparel brand, saw an increase in its conversion rate by 186.56% and a reduction in cost per conversion by 67.01%. We also boosted their ROAS by 303%.

So, if you need help setting up and managing your ad campaign — and want better ROAS — get in touch with the HawkSEM team today.

The takeaways

The right bidding strategy can help you get the most return from every dollar spent.

But what if your campaign itself is not well-planned? What if you’re targeting the wrong keywords? Or the ad copy isn’t up to par?

Running a successful ad campaign requires an integrated approach. And not look at things in silos.

You need a team of specialists who work together to take care of campaign planning, keyword research, copywriting, bidding, analytics, optimization, and everything in between.

The HawkSEM team offers end-to-end ad solutions. Contact us today and let’s discuss how we can help you. No strings attached.