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September 1, 2022

What's ROAS Bidding? vCPM? Do you want Enhanced CPC?

Victor explains the multitude of bidding strategies available with Google, and highlights their pros and cons.

With all the different Google Ads strategies available in 2022, and each of them promising an increase in performance, it’s hard to tell which one is right for your business goals! So we thought it’ll be a good idea to break them down along with some pros and cons.

Target CPA Bidding
This bidding strategy allows us to set the desired cost-per-acquisition (the cost of a conversion). The algorithm will try and get you conversions at the CPA that you have set.
PROS: This is an effective bidding strategy for driving conversions at a CPA that is considered profitable.
CONS: Using this bidding strategy requires existing conversion data so Google can define and optimise your performance. Google recommends a minimum of 15 conversions in the last 30 days, otherwise Google’s algorithm will struggle to meet your target.

Target ROAS Bidding
Target ROAS focuses on a return on ad spend. The average ROAS is again a figure that we set. The algorithm will then start to capture conversions that match the desired ROAS.
PROS: This is a good bidding strategy for eCommerce businesses that sell online to help scale their performance and attract more sales.
CONS: In order for Google’s algorithm to optimise properly, there needs to be consistent and accurate conversion volume. When setting your ROAS this has to be realistic, otherwise this can have a negative impact on your performance and see performance drop altogether! This bidding strategy will also give Google 100% control of your bids, which means you have no control over the average CPC.

Maximise Conversions
With this bidding strategy, we are essentially telling Google to take full control of bids and get as many conversions as possible out of the daily budget that we have set for the campaigns.
PROS: This can help increase the overall volume of conversions, as the algorithm can serve ads to users it believes are likely to convert based on search signals.
CONS: You have no control over the CPC that you’re paying, which could impact and increase your overall CPA.

Maximise Conversion Value
This bidding strategy works similar to Maximise Conversions where Google takes full control of your bids in order to get the most ‘revenue’ where possible based on search signals.
PROS: Google’s algorithm will optimise for high-value conversions
CONS: This bid strategy doesn’t work well with accounts that do not have value-based conversions.

Enhanced CPC Bidding
Enhanced CPC is a strategy that is essentially a tweak to the manual bidding that we all know. With this strategy, we can set a max CPC and allow the algorithm to adjust the CPC when it thinks it can capture a conversion.
PROS: Google will increase its bids in the likelihood of a click leading to a conversion.
CONS: Google can bid more than you’re willing to spend per click and may consume your daily budget faster.

Maximise Clicks
For maximise clicks, Google will try and get you as many clicks as possible with your daily budget. However, the downside to this is the quality of the visitors to the website may not be at a stage to reach out and convert.
PROS: You are able to set the maximum CPC that you’re willing to pay and Google will aim to drive as much traffic as possible within your daily budget, which is great for brand awareness.
CONS: The clicks that this bid strategy will drive may not always be relevant and users might also not be ready to reach out and convert.

Manual CPC Bidding
Manual CPC is the bidding strategy that gives the person managing the campaign the most control. With manual CPC you have full control of what you want to bid on each keyword, bid adjustments to devices, location targeting, demographic targeting and more!
PROS: Gives you a high level of control over your bids, bid adjustments and targeting. It’s a great way to start collecting data and get an idea of what performance you can achieve.
CONS: Manual optimisations need to be made and missing out on real-time changes depending on search trends and signals to help enhance performance that will be made when utilising automation.

Target Cost per Thousand Bidding
The previous strategies have focused on search ads, but tCPM bidding involves ads on the display network specifically. This bidding strategy is essentially the same as manual CPC but instead, you specify a figure you want to bid for every thousand impressions on the display network.
PROS: To help show your ads to the most unique audience to help enhance and raise brand awareness
CONS: You are paying per 1,000 impressions regardless of whether someone has closed or skipped your ad.

vCPM Bidding
vCPM is exactly the same as CPM bidding except for one thing: you only pay for viewable impressions. With CPM you pay for every served impression, but with vCPM you only pay when the impression is actually viewable by users.
PROS: Relatively cheaper as you pay per 1,000 viewable impressions when increasing brand awareness.
CONS: If you’re running ads to a small audience, you are then paying for the number of times your ads are shown to them, which can become overwhelming. It’s also well known that Google will show your ads on irrelevant websites to meet viewable impressions.

CPV Bidding
CPV bidding is specific to video ads only. Again, the same as manual CPC but for video ads where you pay every time the video is watched by a user.
PROS: Great way to reach more people on the display and YouTube network and ensure that you’re only paying for actual views.
CONS: Can be ineffective for conversion campaigns, more views don’t mean more conversions. So, this would be suitable for brand awareness.

 

At the end of the day, there is no perfect bid strategy for your Google Ads campaigns, and often times it is important to run tests with different bid strategies for different campaign goals, to figure out which one fits the goals of a business best.
At Direct Clicks our methodology has always been starting off with Manual CPC to take full control of all aspects of the campaign to not only gather as much data as possible, but also get a solid idea of what kind of performance we get. Once we’ve established good and consistent performance, we’ll work on optimising and taking performance to the next level. This can be done using the best and most appropriate bidding strategy which we believe can help with maximising conversions whilst keeping the cost per conversion low.
With all this in mind, no matter what bid strategy you choose, it will not work with a poorly structured account. So it is important to have the basics covered first! Such as having the right keywords in the campaigns, the right ad copy and the right targeting.
If there are any questions about how your campaigns can take advantage of Google’s bid strategies, please don’t hesitate to reach out to one of our digital marketing specialists!

 

Please feel free to contact the author if you have any questions about this process, or would like some advice on your Google Ads keyword selection.

Victor Madsen

SEM Executive

Having recently made the move from Europe to Australia, Victor is one of the newer additions to the Direct Clicks team. Fuelled by a passion for Search Engine Marketing, office snacks, and instant coffee, he takes pride in working closely with our clients to get their word out there and bring them closer to their potential customers.

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