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Google Adwords Bid Types: Which is Best and When to Change for Maximum ROI

Google Adwords Bid Types: Which is Best and When to Change for Maximum ROI

When it comes to Google Ads, which bid types are best?

This is a question we see quite a lot actually, and the reality is while Google Adwords started off a very simple infrastructure or advertising platform, over time it’s become more and more complex and more and more AI and ML, which means artificial intelligence and machine learning based. So it really comes down to how much do you let Google’s artificial intelligence run your Adwords campaigns for you and how much control do you take?

There’s a whole bunch to this as far as different campaigns options ect. But if we look at specifically bid types, there’s:

4 Main Bidding Types

1. CPC ‘cost per click’, meaning we’re going to pay a certain amount per click on the ad, for example,  $1.61 per click.

2. ECPC ‘enhanced cost per click’. The way this differs from CPC is this: say we set a default bit of $1.61, but if Google knows this person has a good track record of converting, then bid more for that person because there are a greater chance of getting a conversion from them.

3. CPA ‘cost per acquisition’. With CPA we can say we want to target $1 leads or we want to target $12 sales as an example. Basically, we set whatever the conversion is counted as and then whatever it is we want to pay for that conversion.

4. ROAS  ‘return on ad spend’. For this one, it’s essentially telling Google to configure the campaign to give you an ROI for a figure you choose, that’s relevant to your business. For example, your campaign budget is $100 and if we set it to have a 400% ROI for example, the campaign is essentially set to churn out $4 for every $1 you put in.

There’s a whole bunch of options there as you can see and this only touches on what they can do.

So then, which way it is? Where do you start? And then, what do you tune it to over time? It really depends on the types of campaigns you’re choosing as well. And I’ll cover this in more depth at our upcoming Digital Marketing Evolution event.

So if you haven’t done that, please secure your spots now while it’s still available. 

Here’s What You Can Do Right Now

In the short term, what we find is often starting with controlling the cost of the click is a great way to go. We never use the CPC option, in a campaign just paying for clicks. We generally start with Enhanced CPC meaning enhanced cost per click, so we’re still setting the campaign on a cost per click basis, but we’re saying to Google, if you know someone’s a good converter, then we’re happy for you to pay more for that. Generally, that works pretty well and there’s a lot of campaigns where that’s actually the main bidding type that we use.

Enhanced CPC can get on a winner and once it’s got a lot of conversions (30-100), then that’s when you may want to switch the bidding type to a target CPA. Say for example, if you were acquiring truckloads of leads, then you may want to test target CPA because now you’ll actually be able to tell Google, we are getting $12 leads at the moment, so let’s set it to $12 or we can set it to $14 then $12, then $10, and you can just try and keep adjusting the ratchet to get better and better cost per lead. So that can be a great way to go, but we never start with CPA. Your campaigns need conversions first, to be able to bid using this strategy effectively.

When it comes to Google shopping or other similar campaigns, after you’ve got enhanced CPC working, you may want to target ROAS. By doing this, you’ll be able to see what return on Adspend you’re already getting and then set it for something maybe a little bit higher than that. If Google can achieve it, then turn it up again. And then if Google can achieve that, turn it up again.

So as you can see, there is very much an art and also a science to how to tame Google’s AI machine learning base. Hopefully this helps you to have a look at your campaigns and see whether you have those things set, if in doubt, choose enhanced CPC. That’s the safe option.

And if you want to see this with screenshots and what to use when, then come along to our upcoming Digital Marketing Evolution Traffic & Conversion Event as I’m going to go into this in much more depth and also which campaign types to use where you really can maximize your income from this. Because our best performers, for every dollar we put in, they spit out $26 on day one. So you can get some crazy results if you know what settings to tweak and test.