1.6K members online now
1.6K members online now
Welcome to the Official Google AdWords Community
Find optimization tips and how-to guides and videos by the Google team, AdWords Experts and other industry experts
star_border
Top Contributor Alumni

Adwords Bidding Strategies Part 1

Hi
Welcome to Adwords community"Going once, going twice, sold!" at a normal auction either you would be ecstatic or disappointed hearing these words, depending on whether you were highest bidder or not. But with keyword auctions everyone can get piece of whatever they want at a cost which they can afford.

gavel.png

 

This is where AdWords bidding strategies come in to picture and choosing the most suitable bidding strategy for your business and for your budget is probably the most important part of any AdWords campaign.

 

What are bidding strategies?

Bidding strategy essentially is a strategy which lets you optimize your budgets to achieve your campaign objective/s.

 

How do you access bidding strategies on AdWords interface?

Navigate to:

Campaigns tab on top menu>> select campaign which you wish to optimize >> Settings >>

On this screen you will find a section called Bid strategy under All Settings

 

There are 4 main types of Bidding strategies

  • Focus on Clicks: This is most commonly used by AdWords users and as the name suggests this ensures maximum possible traffic for your budgets and Keywords.                                         
    •  
    • I'll manually set my bids for clicks: With this you can set your bids at AdGroup Level or Keyword Level, this method gives you more control over how you spend your budget but also increases your work to set bids at AdGroup level or keyword level.  This is for people who scream their bids at the top of their lugs at auction J, who are involved in account and want more control.

 When to use: When you have time to monitor your adgroups / keyword bids, avg cpc, avg position etc & and can take corrective measures based on the data.

manual-bidding.PNG

 

 

 AdWords will set my bids to help maximize clicks within my target budget (also known as automatic bidding): With this option you can set maximum you are willing to spend per click at campaign level and AdWords will set your bids to maximize clicks. With this you cannot set AdGroup Level bids or keyword level bids. This decreases your work considerably but also you have to let go of a little control over the way your budget is spent. This option is for people who just nod looking at the auctioneer to let them him know of their interest. Who are ready to let go of control to some extent.

 

When to use: When you know whats the maximum you can spend per click on a particular campaign and you don’t have time to monitor several campaigns and bids on daily basis this may be the best option for you.  This can also be used at the start of new campaign to test the CPCs if you are not sure about it.

autmatic-bidding.PNG

 

Enhanced CPC (ECPC): This is kind of option which tries to achieve best of both worlds between Focus on clicks and CPA bidding (explained below #2.1): This option can be used along with either  1.a or 1.b. If you select this option then AdWords calculates probability of conversion happening for a particular keyword and depending on the probability it may increase your Max CPC by up to 30% for high probability and lower your Max CPC even more than 30% for lower probability of conversion taking place. You can also define if you want ECPC to be based on one per click or many per click. This option is for people who most of the times just nod at auctioneer but once in a while like to scream their bids.

 

 

When to use: As described above this bidding strategy is kind of best of both worlds and can be effective where you have a mature campaign but you have a seasonal product where you might be required to increase and decrease bids depending on season.

ecpc.PNG

  • Focus on conversions (Conversion Optimizer) - use CPA bids : This option as the name suggests focuses on the AdWords conversions. In real world this is equivalent of people sending proxy to bid on their behalf with set amount of budget. This will control your cost per conversion to a large extent but in some cases may also drop the number of conversions because AdWords system will bid based on probability of conversions and low probability keywords may not get any clicks and thereof conversions.

     Target CPA: This is average amount you would like to spend on per conversion. You will get some            conversions above this bid and some below it which in all should ideally average out with your CPA bid.      But there is no guarantee that it will meet your bid as there are several factors in conversion which are      outside Googles control such as competition, landing page , etc.

     When to use: Use this when you have a strict mandate on cost per conversion but in worst case                 compromize a little on the number of conversions.

target-cpa.PNG

   

 

 

 

 

 

 

       Max CPA: This bidding option is going to retire in Jan 2014 so let’s not invest time in dwelling on it

      In next part we will cover rest of bidding strategies

 

  1. Focus on impressions
  2. Flexible bid strategy

Update: I had promised to write part 2 but I think @pankaj1782  has already covered it In his article

Really nice flowchart Pankaj.

about Nikhil Parachure

Digital Marketing / Web & App Analytics expert with experience ranging from small businesses to very large portals. Across varied verticals like banking, travel, ecommerce, insurance. Google Adwords top contributor since 2013 and currently working with a leading Indian ecommerce portal. Aspiring writer, wants to be lighter!

Comments
Mini-CM Community Manager
December 2013

Thanks for posting this Nik. Very informative. 

Doc F
December 2013

If I can find keywords that have low bid price for my low budget but has high impressions, low clicks and high rank is this a good strategy?

theniks Top Contributor Alumni
December 2013

Hi Doc F

I think in your case simplest way to go about it will be to go for "Maximize Clicks" under "Flexible Bidding strategy" I will be covering that part in detail in next article

Hope this helps

ScottyD Top Contributor
December 2013

Nice article Nik!

Rakesh Kumar Top Contributor
January 2014
Nice Article Nikhil, It is very informative.
Neha Gupta Top Contributor
February 2014

Nice informative Article Nik!

Curtis W
February 2014

Well written and informative. Good work Nikhil.

kumar11
February 2014

fine 

Rahul Gupta
February 2014

Thanks Nikhil. I'm new in to this so today i've learned a lot..

Darren_Franks
February 2014

Good stuff as always, Nik. TY!

Labels