Bidding Strategy

A bidding strategy is the method you use to determine the maximum amount you’ll bid for a click, impression or conversion in Google Ads. You can choose between manual or automated strategies, depending on your campaign objective: traffic, visibility, leads or revenue. Google uses your bidding strategy to determine in real time whether and how much you pay for an ad position. For small and medium-sized companies, choosing a bidding strategy is crucial, as it directly affects your advertising budget and return on investment.

How a bidding strategy works in Google Ads

Every time someone searches for a keyword you’re advertising on, an auction takes place. Google assesses your bid, your ad quality and the expected impact of ad extensions. This determines your Ad Rank, which decides whether your advert appears and in which position. Your bidding strategy determines your maximum bid. With manual bidding, you set a maximum amount yourself for each ad group or keyword. With automated strategies, you let Google bid within your budget based on your campaign objective, such as conversions or clicks. Smart bidding strategies use machine learning and historical data to optimise in real time. This works well if you have sufficient conversion data, but can be unstable during the learning phase.

Why bidding strategies emerged and why they are even more important now

In the past, you would bid manually on each keyword, which was labour-intensive and required a great deal of expertise. Google introduced automated bidding strategies to help advertisers scale up more quickly and achieve better results without constant attention. Smart bidding strategies such as Target CPA and Maximize Conversions are now the standard for many campaigns. They respond more quickly to changes in search behaviour, device, location and time of day than a human can. For small and medium-sized companies without a full-time advertising specialist, they offer a way to remain competitive, provided your conversion tracking is set up correctly. Without reliable data, however, automation actually delivers poorer results.

What a bidding strategy delivers for your online adverts

With the right bidding strategy, you can get more out of the same budget. You only pay for clicks or conversions that align with your objective. A strategy such as Target ROAS helps you maximise revenue per pound spent on advertising, whilst Maximize Clicks is suitable if you primarily want to build brand awareness. In practice, we see with SME clients that a poorly chosen strategy quickly leads to wasted budget: for example, using Maximize Clicks when you actually want leads, or setting Target CPA without sufficient conversion data. A well-thought-out SEO strategy and clear objectives form the foundation. You can then choose a bidding strategy that fits these objectives and monitor it via analytics to make adjustments where necessary.

Which bidding strategy you choose depends on your stage, budget and campaign objective. A start-up online shop with limited data has different priorities to an established service provider with hundreds of conversions per month. Below you can see the main applications and when they are appropriate.

Lead generation with Target CPA or Maximize Conversions

If your aim is to generate as many leads as possible within an acceptable cost range, choose Target CPA or Maximize Conversions. Target CPA is based on an average cost-per-acquisition that you set yourself, for example 25 pounds per completed contact form. Google then attempts to generate as many conversions as possible for that amount. Maximise Conversions aims for the maximum number of conversions within your daily budget, with no cost limit per conversion. This strategy works well for B2B service providers looking to fill their pipeline, provided your conversion tracking is set up correctly and you have at least 30 conversions per month. Without sufficient data, the algorithm will veer off in all directions. In practice, we see that small and medium-sized companies often switch to Target CPA too quickly, whilst manual bidding during the start-up phase provides greater control and insight.

E-commerce with Target ROAS for profit maximisation

Online shops with clear margins and transaction values often opt for Target ROAS (return on ad spend). You set the minimum turnover in pounds you wish to achieve per pound spent on advertising, for example 400 per cent. Google then optimises for transactions that deliver that return. This strategy works extremely well if your product feed is well structured, you pass on your conversion values to Google Ads and you have sufficient volume. For an online shop with 500 products and 50 to 100 transactions per month, Target ROAS is a logical choice. Please note: Google focuses on high-return products and may skew your product range. If you also want to promote new products or build brand awareness, combine Target ROAS with a separate campaign using ‘Maximise Clicks’ or manual bidding. You can find out more about online shop optimisation on our page about having an online shop built.

Brand awareness with Maximize Clicks or Target Impression Share

If you’re primarily looking for visibility and traffic, choose ‘Maximise Clicks’ or ‘Target Impression Share’. ‘Maximise Clicks’ generates as many clicks as possible within your budget, which is useful for content marketing or awareness campaigns. Target Impression Share focuses on the percentage of times your advert appears at the top of the search results, for example, an 80% impression share for your brand name. This is relevant if you want to prevent competitors from advertising on your brand name, or if you want to become visible quickly in a new market. For a small to medium-sized company with a new brand or product, this can be a smart first step, but conversions are not yet the primary goal. Once you have sufficient data, you should switch to a conversion-focused strategy.

When a bidding strategy is the right choice and when it isn’t

Automated bidding strategies work well if you have at least 30 conversions per month per campaign, your conversion tracking is reliable and your objective is clear. They save time and optimise faster than manual bidding. However, if you’re just starting out, have a limited budget or are experimenting with new keywords, manual bidding is often better. This way, you retain control and learn more quickly what works and what doesn’t. Similarly, with highly seasonal offers or short-term campaigns, the algorithm doesn’t have enough time to learn. In such cases, opt for manual CPC bidding with bid adjustments by device, location and time. A common mistake is setting Target CPA based on a budget that’s too low or insufficient data, which leaves Google with no scope to optimise and causes your campaign to stall.