Google Ads Bidding Strategies & Pricing

Since the initial launch of Google Ads nearly 22 years ago, the platform has gone through a ton of changes in both the way it looks and the way advertisers use the self-serving platform to promote their businesses. If you are new to the Google Ads platform, you may be surprised to learn that most of the various different bidding strategies that Google Ads allow you to choose from were not readily available for many years. Advertisers that would use the platform were just limited to the manual CPC bidding for the first 10 years of the platform’s inception, it wasn’t until 2010 that the first automated bidding strategy was rolled out, that bidding strategy was enhanced CPC bidding. As the platform rolled out new bidding strategies over the years, it played a considerable role in assigning Google Ads budget to campaigns as each bidding strategy affected the Google Ads costs for companies.

Different Types of Google Bidding Strategies (Manual and Smart Bidding)

What is Manual CPC Bidding?

The manual CPC (cost per click) bidding strategy was the very first option available to advertisers since the launch of the ads platform back in 2000. Manual CPC allows advertisers full control over their campaigns and thus full control of Google advertising costs. This strategy allows users to set the maximum bid they are willing to pay each time a search results ends in a click on their ad with each keyword having its own max cost per click. But with great control comes great responsibility, manual cost per click requires advertisers to constantly monitor performance of campaigns, and adjust keyword bids accordingly, as you don’t have the added benefit of Google optimising keyword bids based on machine learning. But manual CPC does give you full control over the cost of your Google Ads clicks.

What is Enhanced CPC?

The enhanced CPC (ECPC) strategy isn’t entirely a smart bidding strategy but rather a hybrid of manual and automated bidding. It remains similar to manual CPC as advertisers have the option of setting a max CPC on each keyword but where it differs is that it allows Google to amend bids based on the likelihood of a search resulting in a desired conversion action such as a sale or lead capture. This strategy very slightly lowers the control you have over your Google Ads costs due to Google increasing and decreasing your bids. 

What is Target CPA?

The target CPA (tCPA) strategy is the first completely automated bidding strategy we will discuss in this post. Target CPA is a strategy based on optimizing conversions for an amount that you set during the set-up of the campaign and change at any point in time. Target CPA differs from the aforementioned bidding strategies as you do not have the option to set a max CPC for each keyword, rather Google will set the bid during auction based on achieving the CPA you chose. This smart bidding strategy is a great way to control your cost per conversion, whilst letting Google take control of the individual keyword bidding.

What is Target ROAS (Return on Ad Spend)?

If you have a certain return on your ad spend that you would like to achieve then the target ROAS strategy will likely be your first choice for a bidding strategy. This is a bidding strategy in which Google will set your bids in order to return maximum conversion value. If you have a target ROI of £12, that would mean for every £1 you would spend, you’d want a return of £12 in return making your target ROAS 1200%. In order to use this strategy, each conversion action must be given a value. 

What is Maximise Conversions?

Maximise conversions is the optimal choice if you’re looking to drive as many conversions and sales as possible while spending your entire budget fairly quickly. With this strategy, Google is prioritising conversions over any other metric, regardless of how much the cost per conversion may be,  meaning that your Google Ads budget can be drained fairly quickly as clicks and conversions can become costly. Similar to other smart bidding strategies, Google will set your bids during the auction based on getting the maximum number of conversions for your budget. If you do select max conversions ensure that your Google ads budget is set to a level you are willing to spend.

What is Maximise Conversion Value?

This smart bidding strategy is in essence similar to the target ROAS strategy as it instructs Google to maximise the return on your ad spend but without setting a ROAS target. Google uses a number of different factors such as age, location and demographics in order to set an appropriate bid that will return the maximum value for each conversion.

What is Maximise Clicks?

Maximise clicks is another smart bidding strategy that will instruct Google to spend your entire budget in order to drive traffic. Google will bid aggressively in order to drive clicks without taking too much consideration into relevance and quality of traffic without actively targeting conversions.  

What is Target Search Impression Share?

The target search impression share automated bidding strategy is an excellent method of building brand awareness and ensuring you dominate the top of the search engine results page. Unlike other automated bidding strategies, Target search impression share allows you to set a maximum cost per click in order to stop overspending and increasing your Google advertising costs. It is vital to set a maximum CPC, if you don’t then you may notice that your Google cost per clicks are unusually high as bidding can be very aggressive and your google ads budget will drain very quickly.

How Much does Google Ads Cost? 

If you’re new to the paid advertising landscape then you’re probably thinking “How much does Google Ads Cost?”. It can be a difficult question to answer because there are a range of different factors that can affect your Google Ads cost such as competitors, seasonality, bidding strategies amongst many other factors that can either drive the cost up or bring your ad spend down.

A good way to get indication on how much you’re likely to spend on your Google Ads budget is to view data by industry. Each industry varies greatly, Insurance for example is by far one of the most competitive industries on Google ads and you can pay upwards of £15 per click whereas other more niche industries may have an average CPC of £0.90p. There is a vast amount of data available on each industry and how competitive it would be to bid on the same keywords. 

Any PPC professional worth his/her salt would tell you that one of the best ways to drive down Google ads costs is through proper account management. Account management is a combination of various tasks that help increase the performance of your advertising campaigns, it can vary from the way your account is structured to creating a negative keywords list to remove any irrelevant traffic. It’s important to regularly check your account performance and make data driven decisions in order to optimise your really get the most out of your google ads budget.

If you would like to find out more about how different bidding strategies work and when to use them, or if you have any other questions about Google Ads, feel free to get in touch with us. 

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