Your bidding strategy determines how Google spends your budget. Choose wrong, and you'll either overpay for clicks or miss valuable conversions. Let's make sure you choose right.
Understanding Google Ads Bidding Strategies
Google Ads bidding strategies fall into two categories: manual and automated. Manual bidding gives you direct control over bids. Automated bidding (including Smart Bidding) uses Google's algorithms to optimize bids in real-time.
Manual vs. Automated at a Glance
Manual Bidding
- Full control over each keyword bid
- Time-intensive to manage
- Best for learning or limited budgets
- No machine learning optimization
Automated/Smart Bidding
- Google sets bids automatically
- Uses conversion data + signals
- Requires conversion tracking
- Needs sufficient data volume
Smart Bidding strategies (Maximize Conversions, Target CPA, Maximize Conversion Value, Target ROAS) use machine learning to predict which auctions will lead to conversions. They analyze signals like device, location, time of day, remarketing lists, and more—far more than any human could process manually.
Manual CPC
You set the maximum bid for each keyword or ad group. Google won't bid higher than your max, though it may bid lower.
✓ When to Use
- New accounts without conversion data
- Small budgets needing tight control
- Testing new campaigns
- High-stakes keywords requiring precision
✗ When to Avoid
- Large accounts with many keywords
- When you have strong conversion data
- Limited time for account management
- Complex campaigns with many variables
Enhanced CPC (ECPC)
A hybrid option: you set base bids, but Google can adjust them up or down based on conversion likelihood. It's the stepping stone between manual and fully automated bidding.
ECPC is being phased out in some campaign types as Google pushes toward full Smart Bidding. If available, it's a reasonable middle ground when you're not ready for full automation.
Maximize Clicks
Google automatically sets bids to get you the most clicks within your budget. Simple and straightforward—but focused on traffic, not conversions.
✓ When to Use
- Building initial traffic and data
- Brand awareness campaigns
- No conversion tracking yet
- Launching new campaigns
✗ When to Avoid
- Performance/ROI focused campaigns
- When you have conversion data
- Limited budgets with strict CPA goals
- E-commerce with revenue tracking
Pro tip: Set a maximum CPC bid limit when using Maximize Clicks. Without it, Google might pay $20 for a click that's worth $2 to you.
Maximize Conversions
Google automatically sets bids to get you the most conversions within your budget. The algorithm learns from your conversion data and optimizes accordingly.
✓ When to Use
- Conversion tracking is set up
- Goal is maximum lead/sale volume
- Flexible on cost per conversion
- Budget is the primary constraint
✗ When to Avoid
- Strict CPA requirements
- Low conversion volume (<30/month)
- When ROAS matters more than volume
- New accounts without data
Key insight: Maximize Conversions will spend your entire budget to get conversions. If your cost per conversion creeps up, the algorithm won't automatically slow down—it prioritizes volume over efficiency.
Target CPA (Cost Per Acquisition)
You set your target cost per conversion, and Google optimizes bids to achieve that target. It's Maximize Conversions with an efficiency constraint.
✓ When to Use
- Known target CPA from historical data
- Consistent conversion values
- Need predictable acquisition costs
- 50+ conversions/month minimum
✗ When to Avoid
- Insufficient conversion history
- Variable conversion values
- Aggressive growth phase
- Target CPA is unrealistic
Setting Your Target CPA
Don't guess your target CPA. Set it based on:
- Historical average: Start with your actual average CPA from the past 30-90 days
- Unit economics: Work backwards from your customer value and margin
- Conservative start: Set slightly higher than your goal initially, then tighten
Warning: Setting an unrealistically low Target CPA will starve your campaigns of impressions. Google won't bid if it doesn't think it can hit your target.
Maximize Conversion Value
Google optimizes for total conversion value (revenue) rather than conversion count. Ideal when some conversions are worth more than others.
✓ When to Use
- E-commerce with revenue tracking
- Variable transaction values
- Revenue matters more than volume
- Sufficient conversion data
✗ When to Avoid
- All conversions have equal value
- Lead gen without value assignment
- Low conversion volume
- Strict ROAS requirements
Prerequisite: You must track conversion values (transaction revenue) for this strategy to work. Without values, Google can't optimize for value.
Target ROAS (Return on Ad Spend)
You set a target return percentage, and Google optimizes bids to achieve that ROAS. For example, a 400% ROAS target means you want $4 in revenue for every $1 spent.
✓ When to Use
- Clear profitability targets
- E-commerce with revenue tracking
- Stable, predictable margins
- 100+ conversions/month ideally
✗ When to Avoid
- Lead gen without clear values
- New campaigns without data
- Aggressive scaling phase
- Unrealistic ROAS targets
Calculating Your Target ROAS
Formula: Target ROAS = (Revenue Goal / Ad Spend) × 100
Example: You want $4,000 revenue from $1,000 ad spend
Target ROAS = ($4,000 / $1,000) × 100 = 400%
Start with your break-even ROAS (based on margins), then add your profit target. If your margin is 50%, you break even at 200% ROAS—so target 300-400% for profitability.
Impression-Based Strategies
These strategies focus on visibility rather than clicks or conversions:
Target Impression Share
Google bids to show your ads a certain percentage of the time (e.g., 80% impression share at the top of the page).
- Use for: Brand terms, competitive keywords where presence matters
- Avoid for: Performance campaigns, limited budgets
CPM Bidding (Display/Video)
Pay per thousand impressions. Used primarily for awareness campaigns where reach matters more than engagement.
- Viewable CPM (vCPM): Pay only when ads are actually viewable
- Target CPM: Set your target cost per thousand impressions
Choosing the Right Bidding Strategy
Use this decision framework based on your situation:
| Your Situation | Recommended Strategy | Why |
|---|---|---|
| New account, no data | Maximize Clicks or Manual CPC | Build traffic data first |
| Have conversions, need volume | Maximize Conversions | Optimizes for conversion count |
| Need predictable CPA | Target CPA | Controls acquisition costs |
| E-commerce, revenue varies | Maximize Conversion Value | Prioritizes high-value sales |
| E-commerce, need profitability | Target ROAS | Maintains return targets |
| Brand visibility priority | Target Impression Share | Maximizes ad presence |
Data Requirements for Smart Bidding
Smart Bidding algorithms need data to work. Google's minimums and practical minimums differ:
- Target CPA: 30 conversions/month minimum (50+ recommended)
- Target ROAS: 50 conversions/month minimum (100+ recommended)
- Maximize Conversions: 15 conversions/month minimum (30+ recommended)
Switching Bidding Strategies
Changing strategies requires patience and proper execution:
Before Switching
- Document current performance (CPA, ROAS, conversion volume)
- Ensure conversion tracking is accurate
- Have realistic targets based on historical data
- Plan for a 2-4 week learning period
During the Learning Period
- Avoid major campaign changes (they reset learning)
- Don't panic over short-term fluctuations
- Monitor daily spend but evaluate weekly
- Keep budget consistent
Common Switching Paths
- Manual CPC → Maximize Clicks: When you want to save time but don't have conversion data yet
- Maximize Clicks → Maximize Conversions: When you have enough conversion data (30+/month)
- Maximize Conversions → Target CPA: When you need cost control
- Maximize Conversion Value → Target ROAS: When you need profitability control
Frequently Asked Questions
What is the best Google Ads bidding strategy for beginners?
For beginners, start with Maximize Clicks if you need traffic data, or Maximize Conversions if you have conversion tracking set up. These strategies are simple to manage and let Google's algorithm handle bid optimization while you learn the platform.
When should I switch from manual to automated bidding?
Switch to automated bidding once you have at least 30-50 conversions per month per campaign. Google's algorithms need conversion data to optimize effectively. With insufficient data, automated strategies may underperform compared to well-managed manual bidding.
What's the difference between Maximize Conversions and Target CPA?
Maximize Conversions spends your entire budget to get the most conversions possible, regardless of cost per conversion. Target CPA tries to get conversions at or below a specific cost, which may mean not spending your full budget if it can't find conversions at that price.
How long should I wait before changing bidding strategies?
Give any bidding strategy at least 2-4 weeks to stabilize before making changes. Google's algorithms need time to learn from data. Switching too quickly prevents the system from optimizing properly and makes it harder to evaluate true performance.
Should I use Target ROAS or Maximize Conversion Value?
Use Target ROAS when you have a specific return target (like 400% ROAS) and want to scale profitably. Use Maximize Conversion Value when you want to prioritize revenue and are willing to accept variable ROAS. Target ROAS is more conservative; Maximize Conversion Value is more aggressive.
Related Resources
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