One Key to AdWords: Choose the Right Bidding Method

by May 13, 2016Featured Posts

za-bidding_strategiesThese are the basic bid strategies in AdWords:

  • Automatic CPC bidding
  • Manual CPC bidding
  • CPM bidding,
  • CPA bidding

The bid strategy you choose should depend on your advertising goals. Let’s look at each of these strategies.

Automatic CPC bidding

With automatic CPC bidding, you’ll pay whenever someone clicks on your ad. CPC stands for “cost per click.” The “automatic” part means that AdWords will decide what your bids are. This can be a good option in the following cases:

  • You have an advertising budget that you’d like to reach consistently.
  • You don’t want to spend the time it takes to manage your own bids.
  • You’re mostly interested in increasing website traffic.

With this option, you will not have control over what you pay per click, EXCEPT you will be able to set a maximum CPC bid for your entire campaign. So, basically that means you can set a cap on your spending for individual clicks.

Manual CPC bidding

 With manual CPC bidding, you can easily set the bids for various elements in your campaigns. This can be a good option in the following cases:

  • You’d like to have separate control for your maximum CPC bids for individual ad groups, keywords, or placements.
  • Or, you do not need to reach a target budget every month.

CPM bidding

CPM means “cost per 1000 impressions.” Although most people think of AdWords as a strictly a pay per click platform, CPM bidding is an alternative that allows you to pay per 1000 impressions. Keep in mind, though, this is only available for display network advertising, not search.

CPM bidding is best for campaigns where the goal is branding, as opposed to direct response. If you simply want a certain audience to see an ad on a regular basis for brand awareness, CPM bidding is a good strategy to choose.

CPA bidding

CPA bidding, or “cost per acquisition” bidding, is an advanced option that lets you bid directly for conversions. In a nutshell, this how it works:

  1. You start a campaign running with another bidding strategy, such as automatic or manual CPC. (You have conversion tracking enabled, and can track conversions that happen through your ads.)
  2. Once you build up some history in the campaign, you can hand over control of click bidding to AdWords for the future. You simply set a CPA bid for the amount you’d like to pay for a conversion.
  3. AdWords will then try to set your click bids based on the perceived likelihood of a conversion.

To use CPA bidding, your campaign must have received at least 15 conversions in the past 30 days.

CPA bidding is recommended when you want to maximize the number of conversions received.

ECPC bidding

Enhanced cost per click is a bidding feature that gives AdWords a degree of flexibility in the ad auctions. Namely, it allows Google to raise your bid if it determines that a conversion is more likely. Enhanced cost per click allows Google to raise your maximum CPC bid up to 30%. (Keep in mind, that is AFTER applying any bid adjustments you might have set.)

Flexible bid strategies

The engineers at Google who develop AdWords are constantly busy, looking for ways to give advertisers more options. This is generally great, because it gives us a better system and more control. No doubt, though, it also leads to some confusion. Flexible bid strategies are a perfect example of this, so I’ll try to explain this feature clearly.

When you create a new campaign in AdWords, you select a method of bidding. For example, you might choose an automatic bid setting–such as one that tells AdWords to get as many clicks as possible for your budget. Or you might choose manual bidding, which allows you to set the exact bid yourself. Or perhaps you choose CPA—or, “cost per acquisition” bidding for that campaign. The bid method you choose will affect all ad groups and keywords in the campaign. This is the way it has always been–and still is.

Flexible bid strategies, however, give you a way to override this traditional structure. You simply create a “bidding strategy” by choosing several options at the account level–and then apply them with flexibility to whichever campaign, ad group, or keyword that you’d like. This allows you to apply automated bidding exactly where you want it, without being constrained by the individual campaign structure. It also allows you to use certain bid strategies that are otherwise unavailable.

The types available:

These are the different flexible bid strategies that are available. Remember that they are set in the shared library of your AdWords account. You simply create one or more strategies, and then apply them to campaigns, ad groups, or perhaps keywords in your account.

  1. Maximize Clicks–this is to help you get the most clicks within the target budget amount.
  1. Target Search Page Location–this strategy automatically adjusts your bids to help get your ads to the top of the search results page, or (AS ANOTHER OPTION) on the first page of Google search results.
  1. Target Outranking Share–this strategy sets your bids to help outrank another domain’s ad in search results, like for when you want to outrank certain competitor.
  1. Target Cost Per Acquisition–this automatically sets bids to help you get as many conversions as possible, While reaching your average CPA goal. (This is the flexible version of Conversion Optimizer)
  1. Enhanced Cost Per Click–this allows AdWords to increase your bid up to 30% based on the perceived likelihood of a conversion.
  1. Target Return On Ad Spend— this strategy automatically sets your bids to maximize your conversion value while trying to reach an average return on ad spend

 

Barry--BW Profile Photo--qual. 80%Hello. My name is Barry, and I love Google AdWords! Would you like to connect with me? If so, send me an email at this address:
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