What Is The Best Google Ads Bidding Strategy For Conversions?
In this short article, I’ll share the best Google Ads bidding strategy to optimize your Google and YouTube ad campaigns for conversions.
Assuming the following:
- You have a defined “conversion” or goal. For instance, you want to optimize for webinar registrants or opt-ins on your landing page;
- You placed a tracking pixel (or tag) on your conversion confirmation page so that you can track people who opt in on your landing page.
Generally, the go-to campaign bidding strategy to optimize for those conversions would be Target CPA (target cost-per-action).
This bidding strategy optimizes your campaigns for the conversion action you specify while allowing you to control your bids so that you can generate conversions at a certain cost per conversion on average.
You can set a unique bid for each ad group within your campaigns.
However, your bids must be reasonable, or your ads will not be served. Start with low bids (say around $8-10) and gradually increase them. You’ll know your bids are high enough once your campaigns start spending close to your desired daily budget.
Costs significantly vary by industry and niche, so it’s good to know your benchmarks.
You can increase or decrease your Target CPA bids to control your daily spending, lead quality, and even the return on ad spend (ROAS) generated by your campaigns.
Another bidding strategy you may want to test is Maximize Conversions, which is essentially the same type of ad campaign but without a target CPA bid.
This bidding strategy optimizes for getting as many conversions as possible within your daily budget.
But here’s the thing, and this is crucial:
Campaigns that use the Maximize Conversions bidding strategy need to be run correctly, or your costs will go through the roof – your average cost per conversion will likely spike because your impressions and clicks will immediately be more expensive.
How To Use Maximize Conversions Bidding
If you use the Maximize Conversions bidding strategy, make sure to have just one ad group per campaign.
However, set the campaign’s daily budget very low; something in the range of getting one conversion a day out of that campaign. So, whatever the bid is that you would normally set for a Target CPA campaign, use that number as the daily budget (e.g., $20/ day).
This may sound a little weird and confusing, but the reason for doing so is that it will make your impressions, clicks, and conversions much more efficient than if you were to set a higher daily budget.
If you set the daily budget higher for Maximize Conversion bidding strategy campaigns, Google will spend your entire budget very quickly. Your impressions and clicks will be way too expensive, and you’ll just blow through the daily budget without necessarily even getting conversions (literally zero conversions).
However, if you keep the daily budget super low, Google will serve your ads more efficiently (or bid for cheaper ad placements in the ad auctions) and thus, give you cheaper impressions and clicks, which may result in cheaper conversions.
So, you may notice that these low-budget Maximize Conversions campaigns might actually produce a lower average cost per conversion than your Target CPA campaigns.
To increase your daily spending, increase the number of these low-budget campaigns (each with just one ad group).
Which Bidding Strategy Is the Best?
I recommend testing both of these bidding strategies – just make sure you implement them a bit differently.
Target CPA: Your campaigns can have multiple ad groups and much higher daily budgets, and you can control the daily budget (and daily spend) with your set target CPA bids.
Maximize Conversions: Make sure that your campaign’s daily budget is super low and that it has only one ad group per campaign so that you can drive efficient impressions, clicks, and conversions.
From my experience at our agency, Target CPA is generally the best option for achieving the best performance in terms of cost per conversion and return on ad spend (ROAS).
Target CPA gives us more control and allows us to maintain performance more effectively and consistently.
Both bidding strategies require sufficient data for optimal performance. Generate a minimum of 20 conversions per ad group prior to making any conclusions about its performance (this is on the extreme lower end, and it varies by industry).
Also, keep in mind that a lower-cost conversion can also mean a lower-quality lead.
The key in paid advertising is finding an appropriate balance between generating a higher volume of conversions while keeping the acquisition cost as low as possible and maintaining lead quality – not to mention maintaining your return on ad spend (ROAS).
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