Which Factors Should an Advertiser Consider When Deciding a Bid Strategy for Effective Ad ROI?

The Ad ROI (return on investment) is a crucial metric for an online advertiser to consider. Paid advertisement can yield ROI based on how perfectly you configure and optimize your campaign. A good starting point is to struggle for a 200% ROI.

However, many advertisers are often confused by the various bid strategy options available in the market. Optimizing ad effectiveness aims to maximize return on investment. Such optimization can be achieved by selecting the most appropriate bid strategy.

What is the best campaign bid strategy?

There is no one-size-fits-all answer to this question, as the best bid strategy for your campaign will vary depending on your goals and the specifics of your campaign.

Choosing the right bid strategy is an important part of running a successful online campaign, and it is important to tailor the bid strategy to the specific goals and objectives of the campaign. Manual bidding vs. automated bidding will be question in your head but first focus on your goal and then decide from it which one you should go.

How do you choose a bidding strategy?

Choosing a bidding strategy should be done by first understanding the advertiser’s goals, limitations, and constraints.

Here is a breakdown of how to choose a bidding strategy:

Determine your campaign goals

What are you trying to achieve with your campaign? Are you looking to drive website traffic, generate leads, or sell products/services?

Identify your target audience

Who are you trying to reach with your campaign?

Create a budget

How much are you willing to spend on your campaign?

Which factors should an advertiser consider when deciding on a bidding strategy?

When it comes to choosing a bidding strategy, there are a few things that advertisers should take into account:

Campaign goals /objectives

The first thing to consider is the goal of your campaign. For example, are you looking to increase website traffic, generate leads, or sell products/services?

If you’re trying to drive website traffic, then an enhanced CPC bidding strategy may be more suitable. If your goal is to generate leads, then manual CPC bidding strategies may be more suitable. If you’re trying to sell products/services, then ROAS or CPA bidding strategies may be more suitable.

If an advertiser is looking to increase brand awareness, they may want to use a strategy that targets a wide audience. If the advertiser is looking to generate leads or sales, they may want to use a bidding strategy that targets a specific audience.

Target audience

Who are you trying to reach with your campaign? Based on the answer to this question, you’ll be able to identify the right ad strategy.

For example: if an advertiser is looking for a very targeted approach and wants to reach out only to qualified leads who have an interest in finance, then a CPA bidding strategy may be a good option.

If the advertiser is trying to reach a very specific audience, like people in a certain city, they may want to use a bidding strategy that targets those people specifically.

If the advertiser is trying to reach a more general audience, they may want to use a bidding strategy that targets all of the people who are searching for the product or service.

Competition

An advertiser should also consider the competition. If there is a lot of competition for a certain keyword, the advertiser may want to use a bidding strategy that allows them to bid more aggressively.

Competition for keywords also varies by industry. For some verticals, there might not be a lot of competition therefore an advertiser may want to bid more aggressively.

Budget

The budget is an important factor to consider when choosing a bidding strategy. Your budget will determine which ad strategy is right for your campaign. Some ad strategies will cost more than others. If an advertiser is on a very limited budget, they may want to choose an ad strategy that is cheaper.

They may also want to use a bidding strategy that targets a specific audience or keywords. This way they can be more targeted in their ad placements, and they won’t have to bid as high.

If the advertiser has a larger budget, they may want to use a bidding strategy that targets all of the people who are searching for the product or service. This way they can bid higher, and get more google ads impressions.

Ad strategy best aligned with goals and target audience

Advertisers should consider the ad strategy that best aligns with their goals and target audience.

This is very important because if an advertiser is looking to generate high-quality leads, it may not be a good idea to use a bidding strategy that targets everyone who is searching for your product or service.

How to ensure your bid strategy works for you?

Choose the bid strategy that best aligns with your goals and target audience.

Test some different strategies before choosing one

When it comes to ad bidding, advertisers should test different strategies before choosing one. You can start with a low budget and test some different ad strategies to see which one gets the most conversions for your campaign.

Don’t rely on just 1 strategy

Advertisers shouldn’t rely on just 1 bidding strategy. Instead, they should test and use multiple strategies. For example, they could use a manual CPC bidding strategy for search ads and target the display network with a CPD bidding strategy.

This way, if one ad strategy starts to perform poorly, the advertiser has other strategies to fall back on.

Use bid tools to help

Another option is using a bidding tool or automated system that will help with the ad bidding.

This way you don’t have to worry about bidding manually or setting up different strategies, instead, it is all done for you automatically with the click of a button.

Consider competitive data

Competitive data allows advertisers to see how other similar accounts are performing. If an advertiser sees that their competitors are outperforming them, they may want to consider switching up their ad strategy.

For example: if an advertiser is using a CPA bidding strategy and sees that the industry average CPA for ads in the same sector is $20, then they may want to switch to a bidding strategy that targets all of the people who are searching for the product or service.

Various bid strategies available for Google Ads

There are a variety of bid strategies available for Google Ads. They can be classified in two broad categories:

Manual bidding

This is where you set your own bids for each keyword. You’ll need to keep track of your bids and make changes as needed to remain competitive.

Automatic bidding

With automated bidding, Google will set your bids for you based on your budget, goals, and other settings.

The most common bid strategies available for Google Ads are:

Target CPA bidding

This bidding strategy sets your target cost-per-acquisition (CPA), which is the amount you’re willing to pay for each conversion. Google will then set your bids to help achieve that goal.

Target  ROAS bidding

This bidding strategy sets your target return on ad spend (ROAS), which is the amount of revenue you want to generate for each dollar you spend on ads. Google will then set your bids to help achieve that goal.

This smart bidding strategy analyses and effectively forecasts the value of a potential conversion when a user searches for products or services you’re advertising.

Maximize clicks bidding

With this bidding strategy, Google will set your bids to help get the most clicks possible within your budget.

Target impression share bidding

This bidding strategy sets your target impression share, which is the percentage of times your ad is shown compared to the total number of times your ad could be shown. Google will then set your bids to help achieve that goal.

This strategy is particularly significant in raising brand awareness.

Enhanced CPC

This bidding strategy that raises bids to maximize the likelihood of achieving the advertiser’s target CPA or ROAS. For example, if an advertiser wants to get 1,000 conversions at $80 each, they can calculate their maximum bid using enhanced cost-per-click (ECPC) bidding. They would then use enhanced CPC as their primary bidding strategy.

Since this is a manual CPC bidding strategy, you can’t set your bids automatically through automated bidding methods like target return on ad spend (ROAS) or Target impression share bidding.

Which strategy should you use for your online business?

While there are many bid strategies available in Google Ads, advertisers should always ensure that they are choosing bidding strategies that are compliant with their campaign goals.

Advertisers can choose either fixed CPA bid strategies, which let the advertiser set the target cost per acquisition or they can go for a percentage of sales or automated bid strategies.

The key is to ensure that your bidding strategy works effectively with the ad goals which you have set at the beginning of the campaign.

Wrap up

Once you have considered all of these factors, you can start to formulate a bidding strategy that is right for your business. There are a variety of different bidding strategies to choose from, so it’s important to find one that aligns with your business goals and budget.

By following these tips, you can choose the right bidding strategy for your business and see better results in no time.