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

PPC bid management allows advertisers to set the maximum amount they’re willing to spend on ads according to their unique goals. But there’s so much more to bid management than budget.

In most auctions, the goal is simple: outbid everyone else to come out on top.

So if you’re aiming for that prime spot with your pay-per-click (PPC) ads, all you have to do is set a bid no one will try to match, right?

Aside from the other factors that impact your chances of getting the top spot (like relevance and Quality Score), your return on investment (ROI) matters.

So, it’s not just a matter of winning the auction — you have to be smart about PPC bid management to maximize ad placement without using up your advertising spending and losing out on potential conversions.

In this guide, we’ll explain the top bid management strategies and mistakes to avoid so you can earn a higher ROI on your marketing campaigns, with expert insights from HawkSEM search engine marketing manager Ian Dawson.

Your bids determine how much you pay for every click your ads get. (Image: Adobe Stock)

What is PPC bid management?

PPC bid management is the process of strategically lowering or increasing your keyword bids to control how much you spend while bidding for placement on search engine results pages (SERPs).

Keyword bids are bids placed in the PPC auction to help secure ad placement on Google’s SERPs.“All Google Ads campaigns require a bidding strategy. But other than being a requirement, they are an important part of the digital marketing strategy,” says Dawson.

“Bid strategies help to maximize the chances for a campaign’s favorable actions.”

How it works

In the PPC auction system, the higher you bid for a specific keyword, the higher your placement will likely be.

And because nearly half of clicks go to the top three paid ads on the search results page, securing a higher spot is a big deal.

However, it’s also important to remember that your bids determine how much you pay for every click your ads get.

This isn’t always the most efficient method because a higher cost per click (CPC) also leads to a higher cost per acquisition (CPA).

This is where strategic bid management comes into play.

The keyword here is strategic. It recognizes that although it feels good to see your ads securing pole position, it doesn’t always lead to a good ROI.

By being strategic with your bids, you can achieve a solid CPC value while getting a good volume of clicks and conversions, all while conserving your budget to gain more conversion opportunities.

Top 8 Google Ads bidding strategies

Below is a breakdown of the top PPC bid strategies to help you choose the right one for your campaign:

1. Target cost per acquisition (CPA)
2. Target return on ad spend (ROAS)
3. Maximize conversions
4. Maximize conversion value
5. Manual cost per click (CPC)
6. Enhanced cost per click (ECPC)
7. Maximize clicks
8. Target impression share

1. Target cost per acquisition (CPA)

If driving conversions is your campaign’s primary goal, Target CPA bidding is the best strategy to use.

With tCPA, Google Ads automatically sets and adjusts your bids according to the maximum amount of money you are willing to spend to acquire a customer.

Although some conversions may cost more, others will cost less to even out and align with your acquisition costs. Of course, this requires you to understand your current acquisition costs.

Further reading: What is Target CPA? How to Use It to Increase ROI

2. Target return on ad spend (ROAS)

Target ROAS bidding is an automated strategy where Google makes bid adjustments based on the returns you want from your ad spend.

This is a helpful strategy to adopt if you’re launching an ad campaign for an ecommerce store.

Every time a user conducts a search, Google analyzes and predicts the conversion value of products being advertised using machine learning. Based on these predictions, Google adjusts your bids to maximize your returns.

For example, if the Google algorithm determines that a search is likely to generate a high-value conversion, Google will bid higher on that search. Otherwise, it bids low.

But before you can use this strategy, you’ll have to determine a realistic number to set as your target. This is crucial, considering the bids being placed will depend on this value.

If you’re not sure what value to set, navigate to previous campaigns and modify your columns to add the “Conv. value/cost” metric and use that to inform your strategy.

3. Maximize conversions

Maximize Conversions is one of the simplest bid management strategies you can leverage in your PPC campaigns.

This is a pretty straightforward strategy that only requires you to set a maximum daily budget. Once set, Google takes care of bidding, spending your budget wisely on searches that get you the most conversions.

If the Google algorithm deems that the cost of a single conversion is too high, Google will not bid on it for you.

4. Maximize conversion value

Maximize conversion value uses machine learning to optimize bids and maximize the value of conversions, not just the total amount of conversions.

5. Manual CPC bidding

Just as the name indicates, manual CPC bidding gives you complete freedom over your campaigns, from the campaign budget to spending on the keyword level.

For PPC marketing experts, manual CPC bidding could mean spending more time monitoring campaign performance and making adjustments if necessary.

However, it also offers a higher level of control over decisions that impact the success of each campaign.

But there’s a caveat: Manual bidding requires extra work and extensive knowledge to pull off. Otherwise, you may end up bidding for extra clicks that aren’t likely to convert.

So, only use this strategy if you’ve had considerable experience working with Google Ads.

6. Enhanced cost per click (ECPC)

ECPC can be described as a mix of manual and smart bidding strategies, as you get to set the basic CPC on the ad and keyword level.

Once the basic stuff is set, the Google algorithm will then work to optimize each campaign. It will adjust bids based on the likelihood of generating a sale.

For instance, if a keyword is too competitive, it will lower your bids to avoid overspending. But it will increase your bids if it determines that the CPC is reasonable and the search is winnable.

Pro tip: To further optimize a campaign, you can choose whether to enhance bids after a specified number of conversions or optimize based on the value of conversions. However, this will only work when different conversion values or dynamic conversion events have been set.

7. Maximize clicks

In this strategy, Google optimizes your bids to get the highest possible click-through rate (CTR) for your ads without considering the quality or relevance of the traffic generated.

In that regard, this is seen as only a means to get the most traffic possible on a limited budget or when a keyword has a limited search volume.

8. Target impression share

In late 2018, Google introduced a bidding strategy called target impression share aimed at getting the most reach possible for your ad.

There are three options available for this strategy, depending on where you want your ads displayed on search results:

• The absolute top of the page
• Near the top of the page
• Anywhere on the SERPs

Based on which option you choose and your percentage share targets, Google will automatically optimize each bid to reach your target as much as possible.

Say you chose an impression share target of 100% on the absolute top of the page. Google will maximize your bids to ensure your ads reach prime ad space 100% of the total possible number of times.

However, take note that the percentage impression share is not just a function of your bids but also the Quality Score of each individual ad and ad group.

So, regardless of the target score you set (in this case, 100%), your ads will unlikely reach that score without overbidding for clicks and views.

This strategy is best used if you want to improve brand awareness and reach as many people as possible through branded search campaigns.

Your bidding strategy is like a treasure map that tells you what to do and where to go to find the treasure. (Image: Adobe Stock)

More bidding strategies

Aside from the eight strategies mentioned above, Google offers three other bid strategies reserved for only the Display Network and YouTube Ads. But we’ll go over them quickly below:

• Cost per thousand impressions (CPM) – A strategy that involves bidding on impressions. The cost is determined based on every 1,000 impressions your ad gets.
• Cost per thousand visible impressions (vCPM) – A variation of CPM bidding where bids can be placed based on 1,000 potential viewable impressions. According to Google, an ad is considered viewable when 50 percent shows on-screen for one second or longer. This is a tactic used in manual bidding to generate brand awareness.
• Cost per view (CPV) – Bids are placed to get the most views or interactions on video ads placed on the Display Network and YouTube. Interactions can be clicks on calls-to-action (CTAs) or overlays, cards, or companion banners. Meanwhile, a view is counted when someone watches at least 30 seconds of your ad, the entire duration of the ad if it’s below 30 seconds, or when they engage with your ad.

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

Common PPC bid management mistakes to avoid

We know the human touch is crucial to campaign success — luckily, marketers are humans (AI bots notwithstanding). That also means mistakes sometimes happen.

We’ll do our part to help you avoid these costly mistakes by sharing the common pitfalls you want to avoid.

Adopting the wrong bidding strategy

If your main goal is to maximize ROAS, then a bidding strategy that focuses on getting maximum click-throughs is not the way to go.

Start by defining your goals.

Generally, there are four types of goals you can target with an aim to increase when running Google Ads:

• Site traffic by maximizing CTR while minimizing CPC
• Branding by maximizing impressions while minimizing CPM
• Leads by maximizing conversions while minimizing CPA
• Sales by generating conversions while maximizing ROAS

Understanding what you want out of your campaigns will help you identify the proper strategy to use in order to reach that goal.

Mismatching your bid and budget

And when we say mismatch, we mean you’re setting too high or low of a budget without accounting for max CPC bids.

For example, if you set your daily budget at $50, but you’re bidding $25 per click, then, of course, you’ll be reaching your limit at just two clicks.

That won’t get you far.

Meanwhile, it also wouldn’t help if you’re shortchanging your bids if your budget is more than adequate. Cheap bids can negatively impact your ad rank and, subsequently, your impression share.

A good budget should allow for about 10 to 20 clicks to get ample opportunities to generate conversions. It should also be sufficient to account for a bid amount based on historical conversion data.

Using automated bidding without setting a cap

A bid cap is the maximum amount of money you’re willing to pay for a bid.

It’s a useful yet frequently overlooked feature in Google and social media ads that can spell the difference between a lucrative campaign and a disaster.

But also keep note that the cap you set is absolute. If you cap your bids at $5.00, then Google will no longer pursue bid opportunities beyond that, even if it’s just $5.01.

To get an idea of how much you should be targeting, you can use SEO and PPC keyword research tools like Ahrefs.

Search for the specific keyword or keyphrase you’re targeting and look for its average CPC. This will give you a ballpark figure on how much to set as your ceiling and floor values.

Using smart bidding without historical data

Smart bidding gives your campaigns more of a focus than manual bidding. However, using smart bidding too soon can actually hurt your campaigns.

Smart bidding strategies rely on historical data to inform bid performance and maximize returns.

In the absence of available data, Google will make assumptions about your campaign and do everything in its power to set bids according to your settings.

But this will all be inefficient without data to back it up.

“Sometimes, automated bidding lacks the proper signals, which can cause spending without results. We often recommend starting a new campaign with manual CPC bidding for the strategy,” explains Dawson.

“As part of a plan to build on positive performance, we recommend avoiding automated bidding until you are satisfied with the quality of user and search queries and ad placements.”

Failing to consider other conversion factors

While your bidding strategy can significantly impact your returns, it’s helpful to remember that other factors can also impact the overall success of your campaign, namely:

• Landing page quality
• Quality Score
• Your definition of a conversion
• Search intent
• Conversion timeline
• Seasonality

Top PPC bid management tips to maximize returns

Now that you’ve learned what bidding strategies to use and what mistakes to avoid, it’s time to learn about how to maximize the returns on your campaigns.

The following are some tips you can follow to optimize your bids and generate maximum ROI.

1. Don’t be afraid to test different bid strategies to choose the right one

When your campaigns aren’t doing well with your current strategy, don’t be afraid to pivot. And don’t stick to one strategy just because it fits the definition.

If your goal is to increase conversions, there may be value in optimizing your bids for maximum clicks. The point here is to test out different strategies to find what works.

2. Don’t exclusively aim for the top spot

The absolute top of search results is prime real estate in SEO and PPC.

Advertisers, marketers, and business owners will often aim to reach the top because it offers the highest likelihood of landing a conversion. Theoretically, this makes it the most profitable spot.

But that isn’t always the case.

In fact, the top spot isn’t always the most profitable position. You can only win it when you set the highest bid value, which increases CPC and, in turn, CPA.

A campaign that generates the most profit isn’t one that’s always shooting for the top. It’s the one that manages to find the sweet spot between cost and high-quality traffic volume.

In many cases, finding the sweet spot between affordable ad spend and conversions can offer the most ROI.

3. Don’t bid more than you can afford

Unless your goal is anything other than to make a profit, it won’t make sense to bid an amount that exceeds the value you get from a conversion.

For instance, if your product is worth $50, bidding $50 or just below that can make your profits negligible, and bidding over that would lead to a loss.

Always place bids that would make sense from a business standpoint to make your campaigns more worthwhile.

4. Understand the limitations of your PPC bid management tools

Bid management tools like Acquisio and Optmyzr can help you with bid optimization by offering insights that can help you save time and make the most of your advertising budget.

If you’re planning to use any PPC bid management system or tool, make sure you understand everything about it: its strengths, how it works, and its limitations.

5. Monitor automated bids more closely and make tweaks when necessary

“The best way to maximize your ad spend is to prove value and scale based on those results. Proving value will come with constant testing in your ad account, especially with bidding strategies,” says Dawson.

Even if you’re using automated bidding strategies for your campaign, they still require a level of manual control and monitoring.

You can’t just set the initial parameters of the campaign and forget about them because you want to make sure they are working to help you reach your goals.

At some point, you may find that your settings are too aggressive or not aggressive enough and require tweaking.

Throughout the lifetime of your campaign, make sure to revisit your campaign settings periodically.

“By monitoring performance, you can decide to adjust your maximum conversions/target CPA to ensure more conversions or monitor your historical CPC to adjust your manual bidding to pay less for clicks,” says Dawson.

“With any testing, strive for statistical significance and ensure that you are collecting enough data to inform your decisions.”

Take a look at available data and glean what information you can in the context of your goals. If these settings aren’t helping you achieve your goals, you can adjust your automation strategy as needed.

The takeaway

By understanding the fundamental components that make up effective bid management, you can be well on your way to managing campaigns that meet your goals and generate the most value.

Need more help with PPC bid management or running paid search campaigns on Google or Microsoft Advertising? Look no further. Get in touch with us today to learn more about how we can help you get to the next level and continue to thrive.

This article has been updated and was originally published in January 2024.