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Transcript – How to Pick the RIGHT Bidding Strategy
When you start a campaign, you should set clear campaign objectives, so you should know what the outcomes of that campaign should be, and part of that is really understanding, which bidding strategy to use for your PPC campaigns. Do you go with a target return on advertising spend, do you look at target CPA, or do you just look at something more of a vanity metric like maximizing clicks, for example?
Well, in this video I’m going to break down exactly how you can pick the right bidding strategy for your PPC campaigns. It’s a very complex and comprehensive subject, and I’m going to cover all of it in this video coming up.
Hey guys, Darren Taylor of the bigmarketer.com and my job is to make you a better marketer. Now, if you’re new to the channel, I focus massively on search engine optimization and pay-per-click advertising tips, tutorials and insight that you can implement today if you would like to. If that sounds up your street, you should consider subscribing to the channel and in this video we are looking at what the best bidding strategy is for your PPC campaigns and of course that will depend on the overall objectives of your campaign.
Now I’ve done a ton of videos on bidding strategy in the past, so I’ve linked those up in the description below for you, but if you’ve watched those videos before you even think about putting a bidding strategy in place, you need to understand the strategy of your campaigns. We don’t know that. How are you going to choose a bidding strategy to fit your objectives? For example, if you are a plumber, you might have a PPC campaign for boiler and water heater installation, but you might also have another PPC campaign where it’s just brand protection bidding on your brand keywords.
Now those two campaigns will have very different goals and outcomes and therefore, the bidding strategy of those two campaigns will more than likely be different. How do you go about deciding which strategy to use for your bidding? But before I continue, hit the like button if you like what you’re hearing so far and you’re really excited to get the right bidding strategy for your campaigns. Let me know in the comments if that is you as well.
On the screen now you’re going to see two distinct types of bidding strategy, they fit into two categories. On the left hand side you’ll see the ROI based, really money focused and kind of return on advertising investment bidding strategies. The ones that will really focus on growing your revenues via paid search, and conversely on the other side, what you’re going to see is vanity bidding strategies, so bidding strategies that aren’t tied to revenue and bottom line or leads or sales for your business, but more around vanity metrics.
Your usual suspects are there your target CPA, target return and advertising spend and others like that, which are really focused on your revenue, and of course on the non revenue focus side, the vanity side, it’s all about visibility and maximizing your traffic, not necessarily meaning it’s going to lead to sales. These are two distinct strategies and overarching both of those sides is our faithful manual CPC, because ultimately manual CPC can span both areas.
You can set your campaign up with manual CPC and manually optimize your bids yourself, for a performance campaign where you want to make money and grow your revenue, but conversely you could also leverage manual CPC in order to[unintelligible 00:03:19] with vanity. You’re going to be showing for terms you want to make sure you get maximum impression shares for or maximizing clicks for as well, so it spans both areas.
By the way, when I say vanity bidding I don’t necessarily mean that as a bad thing, it could fit perfectly your ultimate strategy for your PPC campaigns, and I’ll go into some specific examples further on in the video so you want to stick around for that so don’t rule out vanity building constantly, it might be something you might need to do. Naturally, we’ll start off with how you go about selecting a performance or ROI focused bidding strategy. Maybe you want to generate leads and sales for your business directly, whether it’s someone buying something from your website or you maybe- someone fills out a contact form or makes a phone call to you.
These are the campaigns where they’re focused on lead generation and sales and what I guess Google Ads is all about. I mentioned that there are two different types of ROI performance based campaign. One generating leads, and one generating sales online. Let’s start off with focusing on lead generation, so maybe you’re- going back to the plumbing example.
You’re a plumber, and you want your phone to ring with customers making an inquiry, or maybe completing a contact form on your website, so that to me is a very much a lead generation focused campaign. So if that’s your business, what strategy should you be using? Well, that leaves you with three strategies you can pick from, which is target CPA, maximize conversions and of course old faithful, manual CPC as well.
I’ve done a video previously on why smart bidding might not work so you should check that video out in the description as well, but ultimately, if your campaign is very low volume, you’re not generating much traffic, you’re not generating a huge number of conversions- maybe less than two conversions a day, and you’re budget restricted, then that rules out smart bidding being an effective strategy for you, because Google needs data in order to make good decisions with optimizing and automating your campaigns. If you don’t have enough data in your campaigns, Google can’t make good decisions.
For you guys, you’ve got to fall back on manual CPC, at least for a while until things pick up or maybe maximize your budgets, but ultimately, that’s where you should start if this is you. What if you’re getting a good number of conversions, high volumes, you’re not budget restricted. Which of the two remaining bidding strategies should you be using? Well, if you want to keep your cost per conversion strictly within a particular limit, then you go with a target CPA strategy.
It gives you more comfort. Volume might be a bit lower than the maximize conversion strategy, but if you know you need to hit a certain mark in terms of how much you’re willing to pay for a lead based on your sales conversion rates, then this is a strategy for you to use, because it gives you much more control and flexibility in order to make sure your leads come in at a certain cost, which can be really important, but– Say for example you’re a business like a call center, where you need the phones to ring otherwise you just have a room of call center staff with no phones to answer, then maximize conversions could be better for you because you’re going to maximize the number of conversions you get.
Sometimes you’ll pay a little bit more for those conversions, but essentially, Google is going to find the most conversions for your budget, and if you have an open budget as I said, it could make it more expensive for those conversions but your overall conversion volume should be higher by doing that. Now that we’ve covered lead generation we’re going to move on to direct sales. So somebody transact on your website, and you’re measuring the revenue generated in your conversions, then what strategies are available to you?
Well, you’ve got target ROAS, maximize conversion value and again manual CPC is another option you could potentially use. I won’t go into why you would use manual CPC again because by now you should definitely know that you should use manual CPC if you’ve got low volumes, you’re massively budget restricted and Google can’t get the data it needs to optimize. That leaves you with target ROAS and maximize conversions as your two strategies to choose from. Which one do you pick?
Again, similar to target CPA versus maximize conversions, target ROAS versus maximize conversion value is a similar argument. Well, if your budget is fixed and you want to ensure you spend a certain amount in order to get a specific return on advertising spend in terms of the percentage, then this is the strategy for you to use. If you know you can’t go outside of that, you maybe have business costs and overheads and you know you can’t have anything less than a certain level of performance in your campaigns, then you should use target ROAS.
It makes it a lot easier to give yourself more control for your campaigns, and allows you to set things at a particular level, and I’d say this is the best strategy if this is you. But maximize conversion value can be really successful as well because ultimately if you’ve got enough data in your account and you give Google free rein to get as many transactions at the right value as possible, it can turn out to be really successful for your business.
It’s a balancing act, really. Maybe what you should be doing is starting off with a fixed target return on advertising spend, and then testing and experimenting, changing your strategy to see how much Google could get for you in the first instance because you might be pleasantly surprised at how well Google can do this, especially when it’s got great data, and it can know how much revenue is being generated for particular conversion points.
Again, it really makes sense to start with a target ROAS strategy, and then move over across to maximize conversion value, because that will give you some options to see what Google can do for your business. Now, finally we are going to look at the vanity bidding strategies, and as I said earlier in the video vanity doesn’t necessarily mean it’s a bad thing. Sometimes you need to do some vanity bidding strategy. These are the vanity bidding strategies you need to be aware of and that leaves you pretty much with target impression share, maximize clicks and of course manual CPC.
Now we mentioned at the beginning of the potential of having a brand bidding campaign. Manual CPC can achieve this goal as well, but if you wanted to ensure a certain number of impressions and maximizing your impression share and hitting that target of having a high impression share for your brand’s terms, regardless of fluctuations of competitive bidding, this is a great strategy to use because Google at auction time will adjust your bids appropriately in order to make sure you are visible on the search results page for your target impression share.
That could be something that can be quite useful for you for brand bidding, for example. Another example of vanity building could be a new development or some big breaking news within your niche where you want to capitalize on people looking for that story. You want to bid on this particular term of that developing breaking story, you want to maximize the traffic you’re generating, because it can be seen as potentially a branding activity, so when people are ready to transact with you in the future what you’re doing is you’re generating really cheap click costs.
Maybe have a soft conversion point like a content download or a free demo or something like that, and that will really help you in the future when those customers are starting to look for that solution for that breaking thing in your industry. There’s an example again of when vanity bidding can be useful, but my advice to you is focus on ROI first and then if you need to do vanity bidding, then the option is always there for you as well.
There you have it, all the bidding strategies on Google Ads, in a nutshell, make sure you choose the right one for your business. Let me know in the comments if you need help choosing a bidding strategy I’ll be more than happy to help you there, because I reply to pretty much every single comment I get. Don’t forget to like this video if you did like it, don’t forget to subscribe to the channel and I’ll see you guys on my next video.