Google Ads Bid Management 101: A Beginner’s Guide to Higher Conversions

Whether you’re looking to drive more traffic, raise brand awareness, or boost conversions using Google Ads, your bid management strategy can make or break your results.

Choosing the right bidding strategy and scaling it properly can make a huge difference in getting the best results from your campaigns.

However, with so many bidding strategies to choose from, constant updates, and the delicate balance between automation and manual tweaks, it’s easy to get overwhelmed.

In this article, we discuss the different bid strategies in Google ads and provide tips on choosing the best one for your business and scaling it for the best results.

A step-by-step guide to setting up bid strategies

We’re starting with a guide on how you can access and configure bid strategies in your Google Ads account. Feel free to skip ahead if you’re already familiar with the setup.

1. Sign in to your Google Ads Account.
2. Choose ‘Campaigns’ from the menu on the left.

3. Choose the campaign you want to modify, hover your mouse over the campaign name, and click on the gear icon. Alternatively, you can also click the campaign and access the settings at the top.

4. In the menu that opens up, click on ‘Bidding’.

5. Click on ‘Change Bidding Strategy’.

   

In the dropdown menu that appears, you’ll be able to choose between Maximize Conversions or Maximize Conversion Values.

6. There are also some hidden bidding strategies. To opt for these, click on ‘Select Bid Strategy Directly’.

7. Here you will be able to choose from Maximize Clicks, Target Impression Share, and Manual CPC.

To make the best out of your Google Ads budget, it’s always best to understand how these bidding strategies work for different campaign types. And that’s what we’ll cover below.

Examples of bidding strategies for different campaign types

Google offers various types of bidding strategies based on different campaign types and business goals. Choosing the right strategy is highly dependent on whether you want to increase brand awareness, maximize conversions, drive traffic, or achieve a specific ROAS (return on ad spend).

Here are some practical examples to illustrate this:

1. Search campaigns

A B2B SaaS company wants businesses to sign up for a free demo. Since each demo could be a potential customer, the company would want to bring in as many sign-ups as possible within a defined budget.

Opting for tCPA (target cost per acquisition) is telling Google to strive for a target CPA while getting as many conversions as possible. You get the most sign-ups without exceeding your cost per lead.

If your campaigns don’t have enough conversion data (~30 conversions in the past 30 days), our latest study on bidding strategies finds it effective to start with Maximize Clicks with a bid cap (so you don’t spend too much per click) to gather the initial conversion data. You can figure out what your traffic costs and if it fits within your budget.

When setting a bid cap, ensure it’s not more than 10% of your daily budget or you’ll risk not getting enough clicks. Also, since Maximize Clicks focuses more on volume of clicks, ensure you’re only running Google search, opting out of search partners and display expansion.

2. Shopping campaigns

An online ecommerce store selling gadgets has an inventory in which some products have higher profit margins than others. Their aim is to sell enough of the right products to maximize revenue without sacrificing profitability.

Setting a tROAS (target return on ad spend) translates to Google trying to bid higher for products or users that are likely to generate high-value transactions. Instead of simply prioritizing more sales, tROAS optimizes for more revenue.

3. Display campaigns

A company selling an online course on its website wants to retarget users who’ve started enrolling but did not complete it. Since these users have shown a high level of interest in the course, the company uses a display retargeting campaign for two reasons.

1. A user who has abandoned the enrollment is just a few steps away from converting. Visual ads with clear USPs might be more effective in nudging such users to complete their enrollment than text ads.
2. Display campaigns can re-engage qualified users and remind them to complete the enrollment by reaching them across websites, apps, and even YouTube even if they’re not searching

Since a successful enrollment counts as a conversion, the company calculates it can afford $100 per conversion. Based on this, they choose Target CPA bidding, allowing Google to optimize bids at $100 or lower for placements most likely to drive enrollments.

Ensure Google tracks the right conversions. In this case, completed enrollments would count as the primary goal, while actions like clicking “Enroll Now” or viewing the course page count as secondary conversions. This helps the algorithm optimize for actual enrollments and not other website interactions.

It is also important to secure user consent according to regulations like GDPR before using cookies and other tracking technologies for retargeting and other remarketing audience types such as video RLSA.

4. Video campaigns

A business just launched a new product and they use a video ad to create brand awareness. Since people are not aware of the product and not actively searching for it, the aim is to push the video ad to a large audience for maximum visibility.

Using tCPM (target cost per thousand impressions) maximizes the number of people who see your ad within the budget you’ve defined. It increases visibility and is good for brand recall but may not result in immediate clicks or engagement.

5. Performance Max campaigns

A custom home decor brand wants to maximize profitability by reaching potential customers across various Google platforms like Search, YouTube, and Display.

Since they want to maximize ad efficiency across these channels with minimum manual intervention, the seller considers running PMax campaigns to automate ad placements according to their revenue goals.

Opting for Maximize Conversion Value in this case allocates budgets across channels so as to prioritize high-value sales and increase revenue. Bids are optimized more aggressively on customers who are more likely to indulge in high-value purchases.

To enhance this strategy it is important to connect your CRM with Google Ads. This helps in tracking actual customer conversions and their revenue, allowing Google to optimize bids based on real sales value rather than low-value actions.

How to make the most of Google’s Smart Bidding strategies?

Smart bidding is a subset of automated bidding that focuses on conversions. Also known as auction-time bidding, it optimizes bids based on real-time auction insights.

Bids are optimized based on 60+ signals exclusive to Google’s smart bidding, including:

• Contextual signals like browser, operating system, language, and others in addition to device, location, and time of day.
• Search query-level data
• Predicted conversions
• Target budgets

Smart bidding uses these signals to adjust bids in real time to optimize ad spend. This means that the algorithm might increase bids if a user is more likely to convert. Conversely, it can also lower bids in cases where the likelihood of a conversion is low.

This is why advertisers switching from manual (where they have more control over individual bids) to smart bidding may see fluctuations in their CPC.

Now if you want some degree of control, smart bidding allows you to set bid floors and ceilings (min and max bid limits) through portfolio bidding so you avoid overspending without sacrificing profitability and visibility.

When to use smart bidding for maximum results

1. When you have enough conversion data
Since smart bidding utilizes machine learning and historical data, you need to have sufficient data to optimize conversions. Google recommends at least 15 conversions over a month or longer for every campaign for target ROAS. But, we found that most advertisers clear 50+ conversions in a 30-day period and see better performance compared to accounts with fewer conversions.

This is because smart bidding strategies need extensive historical data to identify the patterns and signals that correlate to conversions. Our study shows that campaigns with more conversion data and stable performance give better results with smart bidding.

If you don’t have enough conversions, start with simpler strategies like Maximize Clicks to collect initial conversion data and then switch.

2. When you have a relatively stable ad spend
Smart bidding strategies require something called a ‘learning period’ which is the time it takes for Google’s algorithm to adjust to changes in your campaign.

If your campaigns have predictable patterns in spends, it becomes easier for the algorithm to identify what works and adjust bids in response. This is especially important for Target ROAS or Target CPA where consistent spending is key to predicting the likelihood of conversions.

On the other hand, inconsistent ad spend results in longer learning periods, delaying bid optimizations.

Our studies indicate that the sweet spot for ad spend when it comes to smart bidding seems to be between $10K-$50K.

3. When you want to maximize revenue and not just conversions
If your primary business goal is to grow your revenue rather than simply increasing the volume of conversions, smart bidding is a good strategy since it can optimize for both conversion count and value.

Accurately tracking conversion values will give you a clear picture of the revenue generated by your ad campaigns. This is key to testing out different strategies to figure out how to strike a balance between profit and volume.

4. When you have clearly defined and properly valued conversion actions
Some advertisers think that smart bidding works only for higher ad spends. However, this is not entirely true. Smart bidding can be used effectively even if you have lower budgets if your conversion tracking is set up accurately.

For instance, you can consider including micro-conversions in your conversion tracking if you have limited data to work with. But each action needs to be assigned an appropriate value so Google allocates budgets to actions that matter most.

Practical advice on how to make smart bidding work for you

Bid smarter, not harder: Solutions to common bidding issues

Effective bid management can be a useful tool to maximize the ROI of your PPC campaigns. However, when bids are not optimized correctly, they can lead to wasted spend, missed opportunities, and poor campaign performance.

In such instances, you need to first identify your underperforming bids.

Signs your bids are underperforming

• Low impressions: A low search impression share indicates that your ads are not showing up too often in search results. This can happen if your bids are too low in comparison to your competitors.
• High CPCs: If you notice your cost-per-click keeps increasing without any improvement in conversions or ROAS, there’s a chance you’re overbidding.
• Low CTR: A declining click-through-rate despite stable search volume could mean your ads are appearing lower on the page if your bids are too low.
• Low conversion volume: If your conversion volume is low despite stable budgets, your ads are attracting less relevant people possibly due to lower bids.

Fixing overbidding and wasted ad spend

Overbidding your ads can deplete your budgets too quickly and reduce profit margins. It can even result in your ads showing up for loosely related searches, attracting low or mismatched-intent audiences. To fix this:

• Review your search terms and implement negative keywords as much as possible to avoid irrelevant searches from triggering your ads.
• Optimize bids for profitability using target CPA or target ROAS if you have enough conversion data.
• Instead of bidding higher through the entire day or week, consider increasing bids during high-converting periods. Optmyzr’s Hour of the Week Bidder allows you to identify the most profitable times and set bid adjustments for them. It helps set up your ad schedules so that you get the flexibility to show your ads on a particular day or time of the week.
• Improve ad copy and landing page relevance since it boosts your Quality Score and ad rank, allowing you to compete even with lower bids.
• If you’re using ROAS-oriented bidding strategies, consider implementing bid caps so you can control ad spend.
• Identify underperforming segments and lower bids on them

Solving underbidding and lost opportunities

Keeping your bids too low your ads may not show up at all or have reduced visibility in high-traffic areas. This results in lower CTR, reduced conversions, and put you at a disadvantage if your competitors are bidding higher for valuable ad placements.To counter this you can:

• Use Auction Insights in Google Ads to see how your bids stand relative to competitors. Consider gradual bid increases for valuable keywords.
• Identify high-value, high-intent keywords that are driving conversions and increase bids on them.
• Use ad extensions to improve the relevance and visibility of your ads. They make your ad more engaging and informative, improving the likelihood of conversions even if you’re working with low to moderate bids in comparison to your competitors.
• If you’re using smart bidding strategies, make sure to periodically review your settings so that they are aligned with your current business objectives. This ensures you’re not underbidding for the right kind of conversions. For example, an e-commerce seller previously prioritizing sales volume to establish their product line might want a higher ROAS in the upcoming months to increase profitability. In this case the seller may want to switch from Maximize Conversions to Target ROAS to avoid underbidding for profitability and efficiency.

When to use automated vs manual bidding in Google Ads?

As an advertiser, it’s easy to be confused between choosing automated or manual bidding for your campaigns. The key is to understand your goals and the type of campaign you want to run. Here’s a quick overview of both approaches to help you choose the right bid management strategy for your ads.

Automated bidding

Pros:

• Highly efficient and time-saving
• Adapts quickly to changes in factors like seasonality, competitor bids, etc.
• Optimizes bids for your campaign goals without requiring manual intervention

Cons:

• Heavily dependent on data
• Can lead to overbidding if goals are poorly defined or there’s not enough conversion data
• Advertisers do not have much control over individual bids

Manual bidding

Pros:

• Advertisers have full control over bids
• Budgets can be tweaked at a very granular level so costs can be managed
• Complete visibility into what’s happening with every keyword

Cons:

• Needs frequent monitoring and adjustments for optimal campaign performance
• Not very adaptive to changes in auction environment
• Higher chances of missing optimization opportunities

When to use automated or smart bidding for ads

• Automated bidding: Best when you have clear goals like maximizing revenue, sufficient conversion data, and a large enough budget. It improves efficiency and makes it easier to scale campaigns.
• Manual bidding: Ideal if you’re working with tighter budgets or targeting very specific keywords and need total control but limited conversion data (like in the case of a new campaign). It also gives room for experimentation since you can test out different bid amounts, keyword variations, and strategies.

Best practices for scaling bids based on campaign performance

Scaling bids too quickly can exhaust your budgets while doing it too slow can make it difficult to reach your campaign goals. The key is to make gradual, informed decisions that drive growth without overspending. Here’s how you can do it.

1. Leverage performance data

Identify strengths and weaknesses in your campaigns by tracking metrics like CTR, CPC, ROAS, and CPA. Regularly tracking these metrics can give you insights into trends or patterns that can inform bid adjustments.

If you individual campaigns don’t have enough data to make informed data, Optmyzr’s bid management capabilities allow you to pull up data for similar campaigns so you can study them. It puts data into easy-to-visualize formats like charts or graphs so its easier to understand and spot opportunities.

Tip: Segment performance data based on factors like device, audience, and location to identify where the highest value conversions occur and refine bid adjustments

2. Use incremental bid increases

Scaling your bids too fast can push you into expensive auctions and spike your costs. It’s always best to increase your bids gradually (e.g. 10-15%) and then monitor the impact of changes for a few days before adjusting it even further.

Optmyzr customers can use if-then statements in Rule Engine to automate bid increases. For instance, if a campaign achieves a 10% increase in ROAS, then raise bids by 10%.

Tip: Instead of making bid adjustments across several campaigns at once, try running tests on a subset of ad groups or keywords to minimize risks. It also gives you a glimpse into what works before you implement the changes at scale.

3. Prioritize high-converting segments

If you find that certain keywords or audience segments are giving you consistent conversions at a lower cost, you may want to consider increasing bids for these high-converting segments. Even a slight increase in bids can capture more clicks, conversions, and impressions and scale without losing profitability.

Tip: Use audience bid adjustments to increase or decrease bids based on conversion data. For instance, you can increase bids for users who have visited your site or fall into the demographic profile of high-converting audience segments.

4. A/B test bid adjustments

Run experiments to find out which bidding strategies are the most effective for you (e.g. manual vs smart bidding). For instance, you can target ROAS in smart bidding against manual bidding to see which one delivers better ROI.

Similarly, if you find that retargeting audiences are converting well, you might want to try increasing bids for them first before doing it for a broader segment.

Tip: For an effective A/B test, choose a campaign with consistent traffic and conversion volume—this ensures you use statistically meaningful results when comparing smart bidding vs manual bidding strategies.

Maximize your Google Ads performance with effective bid management

Effective bid management in Google Ads is a blend of strategic planning, continuous optimization, and leveraging automation where appropriate.

Whether you’re opting for manual, automated, or smart bidding, the key is to make careful, data-driven adjustments, balancing automation with manual control so your campaigns stay agile and you’re getting the most out of your ad spend.

Try Optmyzr’s bid management tools to streamline your Google Ads strategy. Sign up for a 14-day free trial today!

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