Smart Strategies with Google Ads
Pay-per-click advertising – this is how you could’ve described Google contextual advertising described 5 years ago. The system’s algorithms are continuously being improved as they learn more about their clients and their customers, analyze huge volumes of data, and allow you to create advertising that is effective for businesses.
Modern contextual advertising is pay per click, which is most likely to bring the target lead to the advertiser, and in some cases lead to conversion.
The bidding strategy is the setting that determines how you pay and what you pay for. When creating the first advertising campaign, the system offers to choose the strategy for you.
Don’t be too quick to manually set prices and override Google’s smart learning. Depending on your goals, whether it’s to increase sales, popularize a brand, or attract a new audience, you can choose a strategy that will save your advertising budget and help you achieve your goal faster.
To make the right choice, it’s worth it to understand which algorithm lies at the base of each strategy.
Target Cost per Conversion
Best suited for: advertisers who know how much they are ready to spend on attracting a single client, have good statistics in Google Ads and set their own cost per click, but who also want to maximize the number of conversions without raising the price.
Features: the strategy is based on machine learning, which means that the system needs information about who performs targeted actions on your site, from what kind of devices, at what time of day, and from which part of the world. To do this, your campaign must have Conversion Tracking set up. After getting data for even just 30 conversions, Google will be able to predict how promising this or that click is, and whether your bid will affect the completion of a target action.
Result: If the conversion rate is high, Google will raise your bid and the position of your ad. For clicks with less certainty, the price will be lower. The average target price will not change and the number of conversions will increase.
Target return on Advertising Investment
Best Suited for: online stores with a large number of products, where advertising costs for each product must be paid off by their sales. This includes things like hotels with an online booking service, where the ROI for each guest attracted through advertising is established.
Features: Like the previous strategy, this one is based on machine learning. Based on the analyzed information, the system determines what the probability of a purchase being made is and whether it’s worth showing the ad in the first place, raising the bid. The advertiser is required to designate target profitability (for example, the ratio of the cost of the product to the cost of attracting a buyer) and set up Conversion Tracking.
A whole range of contextual signals (more than 2000) is available to machine learning, which is difficult to take into account when manually setting rates. Google takes into account what operating system, what browsers and applications your client uses, how interested they are in your offer and what search queries they use. The purpose of this analysis is to show the user what they’re interested in.
Result: after 2-3 months of tracking conversions and working with the strategy, the advertiser has the opportunity to increase the advertising budget without losing any profitability. In this case, raising the budget is more likely to generate more sales than manual bidding.
Maximum Number of Clicks
Best Suited for: companies that want to attract more visitors to the site and stay within a limited budget, as well as advertisers who don’t focus on the cost of their key phrases and don’t track them.
Features: Many people are familiar with this strategy of “Automatic Bidding”. When setting up, it’s sufficient for the user to provide information about how much they’re ready to spend per day. If the user is focused on bids in their theme, you can set a maximum CPC (cost per click) limit.
After applying it, the strategy will enter a learning phase, i.e. it will collect statistics for the campaign. This learning period takes about a week. It’s recommended that you don’t make any changes during this time.
Result: After analyzing your queries, Google Ads optimizes ad delivery so that you get the maximum possible number of clicks to the site without overspending your monthly budget for the set advertising budget. However, daily budgets can sometimes exceed the set amounts if the system sees that this will generate more clicks.
Best Suited for: since the strategy’s basic operations are similar to the previous ones, it means that it’s a good choice for companies that want to get the most out of the existing budget. In this case, we are talking about the maximum number of completed target actions.
Features: by analyzing user actions, Google sets out an ad where the likelihood of a targeted action is high (calling, making a purchase, filling out a form on the site, etc.).
Result: the advertising budget remains the same, but the number of conversions increases. Accordingly, the cost of conversions goes down. It’s recommended that you set up goal tracking so that you have a clear idea about how fitting this strategy is for your business.
Target Position on a Search Page
Best Suited for: companies that care about brand recognition and promotion, as well as those who need to quickly launch a promotion, sale, and/or invite an audience to an event. This advertising works quickly for this kind of goal.
Features: according to the settings, you can secure the top position on the first page of the search results or appear on any position on the first page. In this case, the system may use an average cost per click higher than the maximum. You can leave everything to the system and choose automatic bidding or you can leave manual bidding on with manual raising (doing it yourself). The strategy is only available for the search network.
The main advantage of this kind of strategy is its efficiency. The system doesn’t need to collect data on your visitors, and bids will change within a few minutes after the strategy is enabled.
Result: quickly attracting visitors to the site, visibility for your brand on the first page of search. When choosing this kind of strategy, it makes sense to spend money on impressions above search results. Specifically, the first three positions are the hottest and most viewed by internet users.
Target Percent of Gains
Best Suited for: those competing for the first place, companies that choose this strategy still end up in the search results after their main competitor. The strategy takes place when you know exactly who you will be competing with.
Features: This interesting and also rarely used strategy is effective for companies that don’t have a daily budget limit. In the strategy settings, you need to specify a competing domain, the percentage of auctions that you want to win, and the maximum bid limit. The higher the indicators, the larger the amount that may be required to compete.
It’s likely that your competitor has the same strategy set up. In this case, bids will rise until the set limit is reached by one of the bidders. But even in this case, when deciding whose ad will be higher, Google will evaluate not only the bids but also the quality of the ads. Therefore, before putting money into this strategy, check the relevance of the ad and the page as a whole, the presence of a good mobile version of the site, compare its download speed with competitors’, and the presence of HTTPS protocol. If your audience finds a competitor’s site better, it will be difficult for Google to convince even with the highest bid limit.
Result: brand recognition due to high positions in searches ahead of competitors. The strategy brings in the first results in 7 days.
Cost per conversion Optimizer
Best Suited for: online stores that want to achieve an increase in conversions, while saving time and automating the advertising campaign. Good for companies that are already receiving a large number of conversions through Google Ads. If the chance of conversion is low, the bid will be reduced.
Features: the system’s main task as part of this strategy is to raise the bid to show the ad to users who are more likely to take the targeted action. At the same time, the cost per click can increase by no more than 30% of the established maximum bid. For full analysis and operation, the system needs at least 15 conversions per month. You can make conclusions about whether the strategy is justified or not about three weeks after its launch. Therefore, it’s worth it to prepare for sizeable expenses during the test period.
Result: a significant increase in conversions while reducing the cost of each of them, but with an increase in the advertising budget.
Which Strategy Should you Choose?
The decision to choose a strategy should be balanced and take into account multiple factors: from the company’s goals to how competitors act. The chart below can provide some insight.
If your goal is for visibility, then the ‘Target Position on a Search Page’ or the ‘Target Percentage of Gains’ strategies will be more useful. For those who want to attract more people to the site, the best strategy is the ‘Maximum Number of Clicks.’ All of the other more complex algorithms will work well for those who are chasing conversions.
Remember that a strategy can be changed at any time, however, getting any result (whether it’s positive or negative) will take time, from one to three weeks.
Track the results of a campaign and let your advertising goals be achieved at minimal cost!
If you don’t want to deal with the intricacies of advertising accounts and settings, consider delegating this work to certified professionals like the Internet marketing agency Web-Sci.