How Bidding Strategies in Google Ads Work

Nov 07, 2023

In this article, we'll delve into the intricate world of Google Ads bidding strategies. 

👉 Google Ads Bidding Strategies Current Best Practices

👉 Google Ads Bidding Strategies EXPLAINED for 2023

Understanding the ins and outs of these strategies is crucial, as setting them incorrectly can act as a roadblock, hindering your ad campaign's growth and profitability.

In this guide, we'll emphasize the significance of aligning your bidding strategies with your current campaign performance rather than lofty aspirations. Let's ensure your Google Ads investments are optimized for success.

Setting Realistic Goals: One of the most common pitfalls in Google Ads is setting unrealistic Target ROAS (tROAS) or Target Cost Per Acquisition (tCPA) values.

It's essential to base these targets on your campaign's historical performance, rather than wishful thinking.

For instance, if your campaign has consistently achieved a Return on Ad Spend (ROAS) of 350% over the past three months, setting a tROAS of 700% is unrealistic.

When you set a ROAS or CPA target, you're essentially telling Google that it can allocate your daily budget as long as it aids in reaching your campaign's objectives.

Guidelines for Implementing tROAS and tCPA: Here are some essential guidelines to follow when implementing tROAS and tCPA bidding strategies:

  • Patience is Key: Don't rush to add a bidding strategy to your campaigns. As a general rule, it's wise to wait at least three months when dealing with new campaigns. This allows you to gather sufficient data to make informed decisions.
  • Stability is Paramount: Before setting your tROAS or tCPA targets, ensure that you've observed stable ROAS or Cost per Conversion (Cost/Conv) results for at least four weeks. If these metrics are still fluctuating, hold off on implementing a target, as consistency is key to making accurate predictions.
  • Set Goals Based on Current Performance: Rather than aiming for unrealistic leaps in performance, set your tROAS slightly below your current ROAS and tCPA slightly above your current cost per conversion. For example, if your ROAS stands at 500%, consider setting your tROAS at around 450%. Similarly, if your cost per conversion is $50, aim for a tCPA range of $55 to $60.
  • Monitor Clicks and Impressions: Once you've set your new targets, closely monitor the performance of your campaign. Be cautious of any rapid decreases in the number of clicks or impressions, as this could signal an issue with your bidding strategy.

Mastering Google Ads bidding strategies is a pivotal step toward ensuring the success of your advertising campaigns.

By adhering to these guidelines and setting realistic tROAS and tCPA targets based on your campaign's current performance, you can optimize your ad spend, boost your revenue, and accelerate your path to success. Remember, patience and data-driven decisions are your best allies in the world of Google Ads bidding