Introduction
In this article, we'll look at the bidding strategies available for use in Google Ads campaigns. As well as examples and tips for choosing the best strategy for your company's objective with that campaign.
And in order to optimize them correctly, it's important to understand the definition of Conversion Action and how to select them in campaigns. So that they can be optimized for the real desired objective.
If you're an advertiser, it's essential to be clear about the expected results. The most common objectives are to generate quote requests, software demonstrations, product sales, cart additions, brand awareness and application downloads.
For each of these objectives, we must have an ideal campaign plan. The entire configuration, goals and website must be designed to meet this objective. Check out more about goals and types of campaigns in this other blog article.
Conversion Actions
A conversion action consists of an action taken by the user on your site (or via a link) after having interacted with your Google ads (whether by clicking on a text ad, display ad, shopping ad, discovery ad or watching a YouTube video).
This conversion action should be defined according to what is considered valuable to your company. Some examples of conversion actions are: buying a product, submitting a form (Lead), chatting on the website, time spent on the website, calling your company via an advertisement, among others.
Tracking conversion actions allows you to analyze the performance of your campaigns, keywords and ads and is fundamental to any optimization process and to the use of Google's Smart Bid Strategies. Such as Maximize Conversions, Desired CPA and Desired ROAS, which automatically optimize campaigns according to your business goals.
Conversion Tracking
Here we follow one of the maxims of management: "What can't be measured can't be managed". Therefore, especially when it comes to Digital Marketing, it is mandatory that every conversion on your site is monitored and computed.
In order for these relevant events to be configured in your Google Ads account, you need to set up Tracking Tags on your website, App or activate the Calls report for calls via ads.
To track conversions, you need to ccreate these actions via Google Ads and then install the code snippet in the site's source code, making sure that they are triggered at the right time.
For example, if you want to monitor sales, you need to activate the Purchase Tag after the Purchase process has been completed, once it has been confirmed. Remember that this tag should contain the Revenue value, so that you can analyze Conversion Value and ROAs.
The same goes for a Lead Form, where the conversion action tag must be triggered after the form has been submitted. As with a thank-you page after sending it.
To carry out this screening process, Pareto has the Tracking Monitorwhich takes care of all the tracking configuration necessary for this process. It also constantly monitors the tags installed.
If you want to set it up yourself, ask the developer of your site or app to follow through with installing the code snippet.
Assignment Model
When it comes to Conversion Action and Tracking for Google Ads, a fundamental point to understand is the Attribution Model to be selected for it.
With users becoming more and more connected, conversion paths are expected to become increasingly complex and interconnected. How do you know when the decision to buy (or register) was made? And on which platform, on which device, using which keyword?
So, the attribution model is the rule that determines how conversion credit is distributed to the different user interactions along the path to conversion.
In other words, the consumer's entire buying journey is analyzed, from the first contact to completion. And finally, different weights are given to each of these stages.
There are 6 attribution models for conversion actions in Google Ads:
- Last Click Model
- First Click Model
- Time Reduction Model
- Linear Model
- Position Based Model
- Data-Driven Model (not available for all accounts)
To check out each of the attribution models available in Google Ads for your conversion actions, just go to this article.
As a suggestion for use, the Position Based Model is highly recommended, since it attributes 40% of conversion to the first click and 40% to the last click, with the remaining 20% attributed to other interactions in the medium.
With this model, we hope to encompass and fairly attribute every type of user interaction with your campaigns until they reach a decision.
Selecting the Conversion Action
For overall tracking of your account, we recommend including more intermediate conversion actions, such as: Add to Cart, Content View, Page Time, among others.
However, we don't want these intermediate actions to be used for direct optimization of our campaigns, but only for analysis purposes. For this reason, it is possible to create conversion actions that are not "included in conversion, just uncheck this option when creating them:
But what if you want to create a campaign that aims to generate one of these secondary conversions?
When creating a campaign, you can choose to optimize it even for conversion actions that are not the "account standard".
Simply go to the campaign settings and click on Advanced. Then, in the "Conversions" option, check the "Choose conversion actions for this campaign" box and select the ones you want.
If you're going to follow the account's conversion pattern, simply leave the option to use the "Include in Conversions" setting at the account level.
Conversion Action Sets
Another interesting option for optimizing your campaigns is to create Conversion Action Sets. Basically, this is the grouping of two or more conversion actions for which you want to optimize a given campaign.
This set will be saved and can be used in more than one campaign. Remember that these actions do not the "Include in Conversions" option in the general account settings.
With this set applied to a campaign, you are saying that these actions are relevant to the campaign objective and that you want to optimize for these events. You can then use them with the ideal bidding strategy (such as Maximize Conversions, Desired CPA, Desired ROAS, which we'll see below).
For example, imagine that a real estate agency provides the following services Property and also selling of properties. These are different objectives and each can be done via a form on the website, by telephone or online chat. So it would be interesting to combine the conversion actions corresponding to "Registration" in one set of conversion actions and "Sale" in another.
To create a conversion action set, simply go to the "Conversions" tab and click on the "Conversion Action Sets" tab. Then select the desired actions and name the set.
Types of Bidding Strategies
Google Ads offers various bidding strategies adapted to different types of campaign:
Manual CPC bidding - Different objectives
Maximize Clicks - Focus on Website Traffic
Desired Share of Impressions - Focus on visibility
CPM, tCPM and vCPM - Focus on visibility
CPV - Focus on visibility
Maximize Conversions - Focus on Conversions
Desired cost per action (CPA) - Focus on conversions
Desired return on advertising spend (ROAS) - Focus on conversions
Choosing the ideal strategy for your company depends on the networks targeted for the campaign (search, display, discovery, shopping, video and app) and the objective: clicks, impressions, conversions or views.
As we saw above, we already understand the need to have conversion tracking set up in the account in order to optimize campaigns for such events and choose the ideal bidding strategies.
By using manual CPC bids, the campaign operator will have total control and visibility of their actions and performance. However, there is a lot of work involved in controlling these bids manually.
With automatic bidding, you don't have to set the bids for each keyword, ad group or product. Google's algorithm will take care of setting them based on the strategy you select.
Pareto has an algorithm that can be applied both to manual CPC campaigns, automating this control of bids according to the goal, and to campaigns that use automatic bids.
Below, we'll explain each of these bidding strategies, but we'll focus on those that have the generating Conversions.
Manual CPC bid
Using this strategy, you can manage the maximum CPC bids yourself. Set different bids for each keyword or ad group.
You need to analyze their performance so that you can make bid changes to match their performance. Increasing the bid of the most advantageous ones and reducing those with low performance will help you control the cost and volume of clicks on your ads.
This strategy can be applied to any type of campaign.
Manual CPC bidding may be a good option for you if these statements make sense to you:
- I want to closely monitor the bids for each word or group of ads.
- I want to have more visibility of the bids applied.
- I constantly monitor my campaign so that I can continually make bid adjustments. Or, if I'm a Pareto customer, I have automation connected to my campaign to automatically adjust bids according to performance.
If you don't know where to start when it comes to setting CPC bids or if you want automated control over them, we recommend using smart bidding strategies.
Focus on Traffic
Maximize clicks - Automatic bidding
The Maximize Clicks strategy automatically sets your bids to get as many clicks as possible with the available budget.
This is a simpler way of bidding to generate clicks. Simply set an average daily budget for the campaign, and the Google Ads algorithm will manage your bids automatically.
You can set a maximum CPC limit for the campaign, so that no bids can be placed above that value. It is recommended to add this limit, since campaigns with a strategy of maximizing clicks can tend to raise the CPC a lot, in order to win the auctions and enable more traffic to the site.
Focus on Visibility
Desired Share of Impressions - Automatic bidding
The bidding strategy Desired Impression Share defines the objective of trying to display your ad in the first position, at the top or in any position on the first page of results.
Google will then automatically set the bids for this objective. For example, I want my ad to appear on the first page of results 90% of the time.
In the case of a Brand campaign, for example, the desired impression share will be as close to 100% as possible most of the time.
Remember, this strategy doesn't guarantee first-place impressions. What's more, it's possible that with the daily budget set, it won't be possible to reach the target.
You can also set a maximum CPC bid limit, so that you don't pay more than a certain amount for a click. But this limit can also reduce your impression share.
CPM, tCPM and vCPM - Manual bidding
These are bidding strategies based on the Cost Per Thousand Impressions (CPM). They are available for campaigns on the Display network or YouTube (Video) and focus on the volume of views received by the ad.
- CPM: With this bidding strategy, you will be charged based on the number of impressions (number of ad views) you receive on YouTube or the Google Display Network.
- tCPM: With the Target CPM (tCPM), you define the average amount you would like to pay for every thousand impressions. Google will optimize the bids to maximize the unique reach of your campaign. This way, you can keep the average CPM of your campaign within the value you set, although the cost of the impressions may vary.
- vCPM: With it, you can set the highest amount you would like to pay for every thousand ad impressions visible on the Google Display Network.You can use this manual bidding strategy You can use this manual bidding strategy for ads created with the aim of increasing brand awareness, but not necessarily generating clicks or traffic.
CPV - Manual bidding
This is an exclusive strategy for TrrueView video ads (YouTube campaigns). With this type of bid, you will be charged for video views and other interactions made by users, such as clicks on call-to-action (CTA) overlays, cards and complementary banners.
To set it up, simply enter the highest amount you would like to pay for a video view (or interaction) when creating the TrueView video campaign.
Focus on Conversions
All the conversion-focused bidding strategies presented below use the so-called Google Ads Smart Bids.
In other words, based on the data collected by the campaign itself and advanced machine learning (artificial intelligence), it is possible for Google's algorithm to intelligently define bids in order to obtain the desired result.
To do this, the signals emitted by each user are taken into account for learning. This includes the device used, the location, demographic information, time of day, etc.
Therefore, as this strategy requires learning, you need to wait for your campaign to leave the learning phase to get the best possible optimization. The time it takes to exit the learning phase depends on the volume of data collected.
In this way, avoid making changes to the structure of campaigns and aggressive budget increases (over 20% on the day), as this will cause the start of a new learning phase.
Maximize Conversions - Automatic bidding
The Maximize Conversions strategy sets the bids automatically to generate the highest number of conversions for the campaign within the established budget.
By using the information from the campaign history and evaluating the indicators at the time of the auction, the "Maximize conversions" bidding strategy will automatically set an optimal bid for your ad whenever it is eligible for display.
It's a very suitable strategy to use when you want to maximize sales of a product, or increase the volume of leads. It can be the first choice for this objective, even without the campaign having a history, since it doesn't depend on setting a CPA or ROAS target.
Keep an eye on the daily budget as this could limit the display of your campaign. Or, conversely, if you have too high a daily budget, Google's algorithm will end up bidding more than it needs to in order to try to use it all up, and this could raise your CPA or lower your ROAS.
If your campaign already has a history before the change to the Maximize Conversions strategy, you should analyze the average amount consumed each day.
Now, if you have a ROAS or CPA target for your campaign, you might want to consider switching to a desired CPA or desired ROAS bidding strategy, which also work with automatic bidding. However, their goal is to achieve the desired average CPA or ROAS that you have specified, rather than using the entire budget to maximize conversions.
Before making the change, make sure that your campaign already has a history of data that allows you to set CPA or ROAS targets. Or, define the ideal value for these metrics beforehand and observe the need to change it (as this could limit the results).
Maximize Conversion Value- Automatic bidding
The focus of this bidding strategy is on maximizing revenue generated by the campaign. So Google's algorithm will seek to maximize the total conversion value of your campaign within the specified budget.
The way it works is similar to the Maximize Conversions strategy, but now the algorithm's intelligence will identify the signals that are most likely to generate a higher value conversion. And thus automatically set the bids in the auction.
The same tips apply to this strategy: set your daily budget correctly and keep an eye on ROAS and CPA targets (checking whether you need to change to another bidding strategy).
Desired cost per action (CPA) - Automatic bidding
The desired CPA strategy automatically sets the bids for search or display campaigns to generate as many conversions as possible without exceeding the desired cost per action (CPA) you have set.
Therefore, as this is the average value, the cost of some conversions may cost more than your desired CPA, and others may cost less. However, in general, Google Ads will try to maintain the desired CPA.
For example, if you set a desired CPA of R$50.00, Google will automatically adjust the CPC bids to try to generate as many conversions as possible with R$50.00 on average.
It is important to note that, using this strategy, it is not possible to directly set a limit of cost per click (maximum CPC). This can lead to very high spending on a given keyword or ad group. To solve this problem, Pareto has developed an automation capable of controlling CPC bids within campaigns using the Desired CPA strategy. Find out more in this article.
This is a bidding strategy that is very suitable for advertisers who want to generate leads. It is a very useful option because it allows you to maximize leads while controlling the cost of each one.
Important tip: Be aware that by adding a CPA that is too low, your campaign may fail to print, as Google may not find users capable of converting within that target set. So be realistic when setting your campaign's CPA target.
Desired return on advertising spend (ROAS) - Automatic bidding
The desired ROAS strategy allows you to automatically define the bids for your campaign in order to obtain the highest possible conversion value with the defined ROAS.
As with the desired CPA, some conversions may have a higher or lower return than the desired value. But on average, Google will aim to achieve the ROAS value set for your campaign.
This is a bidding strategy that requires a certain history of data in your campaign. It is therefore not possible to create a new campaign with this bidding strategy already selected!
To use the desired ROAS, most campaign types need to have at least 20 conversions in the last 45 days. With the exception of search campaigns, which need at least 15 conversions in the last 30 days.
However, in order to maximize results and generate enough data for artificial intelligence algorithms to define bids more accurately, we recommend that the campaign has at least 50 conversions in the last 30 days.
If you have made changes to conversion actionsactions, such as their value capture, wait for them to accumulate enough data to be used. Google recommends waiting up to 6 weeks after changes to conversion value tracking.
Remember to be consistent in setting the ROAS target, as failing to set an adequate desired ROAS can harm overall performance.
Conclusion
In this article, we present the different Bid Strategies available in Google Ads, tips on how to use them and when to change from one to another. Remember that what defines these choices will be your company's goal with the campaign.
We went through a more in-depth explanation of conversion actions and the importance of correct tracking so that campaigns can be optimized correctly.
Many bidding strategies use intelligent bids, which make account management easier, but which require monitoring and the correct definition of the desired targets.
Finally, it's worth noting that many of the bidding strategies, even though they are automated, allow you to make manual bid adjustments, such as for devices, gender, age, among others. To check out the bid adjustments available for each type of bidding strategy, check out this specific article.
If you already work with Paid Media and want to optimize your campaigns with just one click, check out our Pareto.io software.
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