PPC Keyword Bidding Strategies

Win The Google Ads Auction


We have been teasing this blog for two weeks, and even took a week off the POSHcast to prepare it. Today, we are taking a deep dive into the process of keyword bidding. First we will discuss the general process and how it works. Then, we will take a look at the different keyword bidding strategies that exist. Finally, we will talk about the strategy we find most effective and how it has helped clients optimize their ads.


So what is keyword bidding? If you have dipped your toe into PPC advertising on Google or Bing, then you may have some familiarity with the term, and may even have a general understanding of how it works. However, we want to frame this discussion for the newbies out there.


When someone enters a query, such as “detroit google marketing”, any ads that are eligible to be served up on the SERP are placed into an auction for the term. The ads that are displayed are determined by 3 main factors: Your bid, the quality of your ads, and the expected result from your ad extensions and other ad formats. We will discuss ad quality in the next POSHcast, but for now, let’s keep the discussion with bids.


When you set your bid, you are telling Google “this is the maximum amount I want to spend on a click.” While you may have a bid set at $1.00, you may end up spending less. For example, on a term like “marketing company plymouth mi” we may set a bid of $3.00. If the highest competing bid in the auction is $2.50, then we will only pay $2.51.


This may naturally lead you to ask “well, should I just bid extremely high on every keyword?” No. The reason is fairly simple: EVERY industry has companies with huge advertising budgets. Let’s say you are an independent mortgage broker, and you decide to bid $100.00 on “buy a home”, you are competing with thousands of advertisers, including companies like Quicken Loans. Quicken Loans can foot a bill for $100.00 per click, with their $400 million ad budget. Unless you have hundreds of thousands to spend on ads, this is not a winning strategy.





Speaking of strategies, let’s discuss the different types of bidding strategies, how they work, and when to use them when running your Google Ads or Bing Ads.

The first major strategy, and the oldest, is manual cost per click (manual cpc). This is exactly what it sounds like; you manually set your maximum bid for each keyword. Often, when using this strategy, you will find yourself resetting bids frequently, as your ability to be on the first page will cost more or less from day-to-day. This gives you the most control over your costs, and is a good strategy for companies with smaller budgets. You can enable a feature called enhanced cpc if you know that more people tend to engage with your ad around dinner time than, say, in the morning.


If you’re short on time, then utilizing the maximize clicks strategy might be a good fit for you. This will automatically bid in a way that enables your ad to receive the most clicks possible. While a “click” in and of itself may not be the desired result, getting more visitors to your site is usually a good thing.


If you are attempting to have visitors take a specific action (such as watch a video, complete a form, or make a purchase) then you would want to use the smart bidding options. There are several of these, and we will discuss them all.


Target cost per action (CPA) will assist you in increasing conversions while you can set a maximum cost for the conversion. Let’s say you sell shoes, and your net profit on a pair of loafers is $20, but on sneakers it is $40. Setting a CPA at about $2.00 may make sense for your loafer ads, but you may be willing to spend up to $5.00 for sneaker sales.


Target return on ad spend (ROAS) is a lot like it sounds. You can target a specific return on your total ad spend. Let’s say you run an ecommerce store with several different items, all at different profit margins. You may want to target one overall value rather than setting individual values for each product, like you would in CPA.


If you just want to spend your budget and get conversions, then maximize conversions might be your best bet. This would be the go-to strategy for industries like legal, medical, real estate, mortgage and dental. Essentially, industries with high price points that won’t be making the sale in an online setting, but where generating qualified leads is essential.


Essentially combining enhanced cpc with target cpa is maximize conversion value. This strategy utilizes the enhanced auto bidding of the enhanced cpc with the goal being to keep your most lucrative conversions in mind. This is a good blanket strategy for high profit online stores.


So, after reading all of this, you’re probably wondering if there is a “best” strategy. We tend to use manual enhanced cpc at POSH. Our certified Google Ads specialists manage accounts manually, to provide cost control and also to drive results for our clients.


If you have a small business and you are confused by the bidding strategy on PPC ads, contact POSH Digital Media today. We know what makes you click, and we know what clicks convert.

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