- Adwords PPC

What is flexible bidding strategy

and is it right for your business?

Pay per click advertising (PPC) is a complex, but vital part of digital marketing. It can also be one of the most expensive. That’s why having a sound PPC strategy in place is so important to eCommerce businesses.

Done well, PPC can see you reaping big profits very quickly, but get it wrong and you’re going to be in trouble. The question is: which strategy is best for your business? This is where flexible bidding strategies can help.

Flexible (also known as Automatic) Bidding Strategies allow you to assign Google a Goal from which it will automatically optimize bids on your keywords.

These strategies use machine learning to optimize your entire account faster and to a finer degree than a human can. As you can imagine, this saves your PPC specialists a great deal of time, allowing them to spend more time considering the big picture and generating more revenue. Google’s machine learning does most of the heavy lifting for you, but it’s up to you to decide which goals you want to focus on.


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Types of Flexible Bidding Strategy

The available goals range from maximizing clicks on your ads to targeting a certain position on the SERPs (search engine results pages).

  • Target CPA
  • Target ROAS
  • Maximise for clicks
  • Maximise for conversions
  • Target Search Page Position
  • Target Outranking Share

Depending on your business objectives, time and budget, your goals will vary. We will break down the best use cases for each of these bidding strategies to help you decide which flexible bidding strategy is right for you.

 Before You Design, Before You Build, Before You Spend… Design Sprint 

Remember The Golden Rules For Implementing Flexible Bidding Strategies

Build Data First

In the case of strategies that optimize for conversions, it is vital that you build data prior to turning them on. The more data the strategy has before being enabled, the better it will perform. So, on conversion led strategies consider waiting until you have at least 50 conversions in 30 days.

Experiment!

Before you jump the ship and fully automate your account, test your bidding strategies using AdWords Drafts and Experiments feature. AdWords Drafts allow you to experiment and test new ideas and directions you might like to take your campaign without messing up your existing ads. Thanks to Drafts and Experiments you get a safe space to accurately test new campaigns and CTAs against your own data.

Track Conversions

Most of the bidding strategies on this list require conversion tracking to function. So, if you want to incorporate these strategies into your PPC, get conversion tracking is in place to get a truly representative result.

Give It Time

For flexible bidding strategies to optimize efficiently they need at least 2 weeks of consistent use. If you pull the experiment or strategy before this point you are not giving the machine learning a chance to really work its magic.

Which Flexible Bidding Strategy Is Best For You?

Target Cost Per Acquisition (CPA)

As the name suggests, CPA is designed to help you return conversions at a set cost. Just set your budget and you can run your campaign safe in the knowledge that you won’t overspend.

Target CPA bidding can effectively reduce CPA given enough time and enough data input. It uses machine learning in conjunction with the target you have set to optimize your bids to ensure you are returning leads at a rate that is profitable for your business.

Before enabling Target CPA, Google requires you to have conversion tracking implemented and recommends you to have received at least 15 conversions in the last 30 days. Without at least this amount of data Google can’t optimize the strategy effectively.

When setting your target CPA it’s important to be realistic. Setting it too low will just make the account extremely conservative in its bids resulting in no clicks coming through. Setting target CPA too high will result in your account not being profitable.

Best for…

…when your goal is to return conversions within a set cost and you have the necessary data available. It can be of great use in medium to large accounts where maximizing profitability is the core concern.

Target Return On Ad Spend (ROAS)

Target ROAS behaves similarly and has the exact same conditions as Target CPA. The only difference is the algorithm.

Target ROAS algorithm is more complex than Target CPA as it looks to generate the maximum amount of revenue from your spend rather than just acquiring leads/sales at a predetermined cost.

To do this effectively, Google requires a reliable value for each conversion to be able to optimize effectively. This means you don’t have to structure your budget around potential conversions.

Best for…

… shorter buying cycles such as e-commerce led transactions. This is because it’s easier to show the value of a sale. When implemented, ROAS is presented as a percentage figure which allows you to see the return on your ad spend.

Maximise Clicks

As the name suggests, this automated strategy will seek to return as many clicks within your available budget. While it may seem reasonable that traffic only is not worth investing in, there are exceptions.

For example, if you have a semi-large account and want to build click data as quickly as possible with limited concern for immediate return, Maximise Clicks could be the way to go. Or, if you are running a limited time only offer and simply want to push traffic to a select area of your site.

In any event, when implementing this strategy make sure you have a comprehensive negative keyword list in place and are pro-actively managing your keyword match types.

At the Campaign and Bid levels, maximize clicks gives you the opportunity to cap the number of bids, giving you more control and autonomy at the same time.

Best for…

…ecommerce businesses. Maximise Clicks is useful for attracting people’s attention to time-sensitive deals.

Maximise Conversions

Maximise Conversions automatically adjusts campaign bidding for one single goal. That goal is to get as many conversions as possible, however, it can, within your budget. Different to Target CPA bidding, Maximise Conversions is not concerned with your cost per acquisition and will simply spend your budget and try to acquire as many conversions a possible.

But prepare your wallet for a serious pounding. This automation is aggressive and will relentlessly pursue conversions come hell or high water. So if you need leads and hang the expense, this strategy is a good idea.

To enable Maximise Conversions you must have conversion tracking in place. Fortunately, this strategy is set at the campaign level, so it won’t affect any parallel campaigns in terms of rinsing your budget.

Best for…

…most cases, but suffers from similar issues to Target CPA bidding when reacting to seasonal fluctuations. During rush periods, you could see your bidding get extremely aggressive, so be mindful of this. Maximise Conversion strategy is most effective if you want to maximize conversions and your core KPI is conversion volume, not CPA.

Target Search Page Position

This might be a good option for someone who is interested in branding and wants to remain in the top positions for a highly competitive keyword.

Google uses data from the last 7 days to determine the best CPC in order to achieve a top of page ad position. The system will also lower your bids in order to keep you in the top position.

Best for…

…scenarios in which specific keywords need to dominate the top positions. Again, this is an option for when money is no option and defending your position in the market is of vital importance. When using this strategy, you will likely have a number of highly specialized campaigns, each one focused on a specific keyword or set of keywords.

If you have tight budgets or are being benchmarked on tight CPA goals, this strategy is not great for you.

Target Outranking Share

The Target Outranking Share option automatically sets bids to outrank a particular domain.

This strategy helps you attack your competition toe to toe. It will aggressively bid for keywords that your rival has and proactively bid in areas where your rival isn’t bidding. The goal is to ultimately appear on top wherever they appear.

Keep in mind this does not guarantee your ad will always appear above the targeted domain. All this does is respond to other bids with a higher one to stay one rung above the competition in order to improve the ad ranking. However, in this way, it does limit your scope. Because it only focuses on your existing auctions, you won’t see opportunities in other places. But you can’t just throw money at a problem. Your Quality Score is defined by so much more.

Plus, it can also be expensive to raise bids on keywords your competitors are bidding on. Some of them could be bad quality keywords that you’d be better off avoiding. This is why you need to experiment. You can’t always rely on what the majority is doing.

Best for…

… highly competitive markets where brand names and domains are well established. Choose this strategy if your goal is to outrank a specific domain and you aren’t too worried about cost.

Hopefully, you should have a better grasp of the options available to you through AdWords. Flexible bidding strategies are a great tool, allowing you to easily and cost-effectively navigate the complexities of PPC. Google’s automation is there to help you compete on a level playing field, so make the most of it!


Written by Adam Blackford-Mills

Adam Blackford-Mills is Head of Digital at MRS Digital and has over 10 years of experience in sales and digital marketing. Adam works tirelessly to develop digital solutions that expand online marketing potential for businesses and delivers results. Using innovative and actionable thinking, Adam crafts a unique digital experience for every business. 

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