What are PPC bidding strategies?

Written by Phil Birss: Group CEO.
· 4 minute read

So you have PPC set up on Google Ads, maybe a digital marketing agency is managing it for you or maybe you’re doing it yourself; either way, knowing there are several different PPC bidding strategies might make you wonder if you need to be a mathematical wizkid just to understand it all. Okay it can help – but it’s not vital.

Understanding the business goals, and the effects certain bids can have on your keywords and targeting is key to deciding what the best PPC bidding strategy should be.

Google Ads for example, offers a number of different bidding strategies, and each have their own advantages and weaknesses. So, let’s walk through them now.

Manual Cost Per Click (CPC)

This is the default bidding strategy. This gives you total control over the maximum you want to spend per keyword, adgroup or campaign depending on your settings.

Benefits of Manual CPC:

  • Total control over the cost you are willing to pay.

Weakness of Manual CPC:

  • Being able to understand how and where to change can be very time consuming.
  • Can take too long to learn what success looks like in an account.

Maximise clicks

This is the simplest way to bid on keywords; you set a budget and Google Ads does the rest to get the most clicks out of the budget.

Benefits of Maximise Clicks:

  • Hardly any management time is needed.

Weakness of Maximise Clicks:

  • No real control.
  • Quality of traffic can be poor, as the account is not optimising towards converting customers.

Enhanced CPC (ECPC)

This bidding strategy is designed to drive additional clicks and conversions through automatic adjustments to the default bids. If a PPC platform like Google Ads sees that a keyword can potentially drive better performance by altering CPC bids higher or lower, it will do. Originally it was thought Google could increase the CPC by up to 30%. It’s now believed it can be more than this in individual circumstances, but Google would work towards making sure the average CPC will be close to the set bid.

Benefits of enhanced CPC:

  • Reduction in manual work required in changing bids.
  • Easier to manage larger accounts.

Weakness of enhanced CPC:

  • Device bidding is not considered – these need to be set separately.
  • Still need to monitor some CPCs to ensure they don’t become to expensive.

Target Cost Per Action (CPA)

Throughout most PPC accounts, like Google Ads, there will be a desired cost per conversion, which the account is aiming towards. Well why not automatically target this amount? Target CPA utilises machine learning, historical performance data and real time bidding in order to adjust bids to obtain conversions at the target CPA that’s been set.

Benefits of target CPA:

  • If the CPA is understood then this is a no-brainer and makes everything simpler.

Weakness of target CPA:

  • Won’t always work well on smaller accounts.
  • If the market changes all of a sudden CPA might not work. Keywords could be more expensive and so the desired CPA will be higher than the set amount.

Maximise Conversions

As the name suggest, the aim is to get the most conversions out of the desired budget. This uses Machine Learning to recognise opportunities and adjust bids, in order to achieve as many conversions as it can. If this works, it’s one of the quickest ways to find the right bids to get the most out of the budget.

Benefits of Maximise Conversions:

  • For small accounts, this allows learnings to be done quickly

Weakness of Maximise Conversions:

  • Campaigns with shared budgets won’t work
  • If a campaign spends under budget this strategy will not work well.

Target ROAS (Return on Ad Spend)

This is another automated strategy, ROAS is mainly for ecommerce clients, but can be used on other accounts as long as a value is assigned to conversions. The idea is you would instruct how much return you want to make per conversion as a percentage. For example, you sell a product for £5.00 and it cost you £1.00 to obtain the sale. ROAS would be worked out like this.

£5 in sales ÷ £1 in ad spend x 100% = 500% target ROAS

Benefits of Target ROAS:

  • Allows more flexibility if you have different product prices but we need them all to make a profit.

Weakness of Target ROAS:

  • Need to understand business costing to make sure the ROAS target is the right one.
  • Finding the sweet spot can take time.

Portfolio Bidding Strategy

If A Google Ads PPC account becomes fairly big, in terms of either spend or physical size of campaigns, manually keeping on top of bids can be difficult. This includes smart bidding strategies like Target CPA, Target ROAS and Enhanced CPC. Basically you create a portfolio and decide which campaigns/adgroups or keywords this refers to. Allowing multiple things to be managed in one place. Essentially allowing some organisation towards a bidding strategy.

Benefits of portfolio bidding:

  • Larger accounts become easier to manage.
  • Uses real time data to adjust bids.

Weakness of portfolio bidding:

  • Being careful to use the right portfolio strategy, 1 campaign might be far more profitable than the other, so having the same CPA might not work.
  • Without proper organisation this can waste money as a result, by being aggressive on the wrong keywords.

So now the question is which bidding strategy to use?

Unfortunately there is no simple answer to that question, they all have there own benefits and weaknesses. The best idea is to understand the business goals and objectives and try to marry them to a bidding strategy.

If you’re unsure whether you’re using the correct bidding strategy, or you’re not getting the most out of PPC – then get in touch.