Paid Search Bidding Strategies

Paid search bidding strategies are one of the foundations of profitable paid search campaigns. 

Sure, you need great ads and a great landing page. But if you don’t choose a suitable bidding strategy — one that aligns with your goals — you risk wasting money or leaving untapped ROI on the table. 

I’m here to fix that for you. 

In this article, I’ll explain how paid bidding strategies work and best practices for building a PPC bid strategy. 

I’ll even show you real-life examples of how the NP Digital team used several bidding strategies to boost our clients’ revenue, increase conversions, and decrease their cost per acquisition. 

Key Takeaways

• A paid search bidding strategy is the process of setting bids to achieve a specific objective. You can optimize your bidding strategy for clicks, conversions, a share of impressions, or dozens of other goals.
• At its core, paid bidding is about matching the right strategy with your specific goals, be it maximizing conversions or controlling ad spend.
• There are three types of bidding strategy: manual, automated, and smart. 
• There is no one-size-fits-all in paid search bidding. The optimal strategy hinges on your campaign objectives, from manual bidding for granular control to automated strategies for efficiency and smart bidding for precise, AI-driven optimizations.
• NP Digital’s expertise has led to dramatic improvements in lead generation, revenue boost, cost efficiency, and overall campaign performance.
  • Simplifying complex campaign structures and focusing on more valuable metrics led to a 44% increase in total lead growth and a 39% decrease in cost per lead for one client. 
  • Another client saw an 87% increase in year-over-year revenue and a 45% decrease in cost-per-acquisition after restructuring their paid account with precise audience subgroups and customer match blacklists. 
  • A third client experienced a 59% increase in Google conversions and a 53% increase in Meta conversions by restructuring campaigns and improving paid social strategies. 
• Ensure your conversion tracking is impeccable, align your bidding strategy with realistic goals, and embrace A/B testing to fine-tune your approach. These practices aren’t optional; they’re essential for maximizing ROI.
• The landscape of paid search is dynamic. Regularly revisiting and adjusting your strategies based on performance data and new insights will keep your campaigns competitive and profitable.

Table of Contents

• Key Takeaways
• How Paid Bidding Strategies Work and Why They’re Important
  • Know Your Bidding Types
• Best Practices for Paid Bidding Strategies
  • Making sure conversion tracking is correct
  • Keeping your bidding in alignment with your goals
  • A/B testing
  • Don’t change things too often
• NP Digital Paid Bidding Strategies In Action
  • Overall Bid Strategy Adjustments In Action
  • Automated Bidding Strategies in Action
  • Smart Bidding in Action
  • Portfolio Bidding in Action
• FAQs
• Conclusion

How Paid Bidding Strategies Work and Why They’re Important

If you want to improve your paid search marketing, you need to understand how bidding works. 

Let me explain.

In paid search, a bid is the amount you’re willing to spend for someone to click your ad. 

How much you bid — along with other factors — will determine your Ad Rank, a measure Google uses to determine where your ads appear on the page. These other factors include:

• The Quality Score of your ad and landing page. Google scores this on a scale from 1-10 using your ad’s expected clickthrough rate, relevance, and landing page experience. You can use my free Ads Grader tool to understand your ad’s performance. 
• Search context, including the user’s device and location
• Auction competitiveness
• The other ads and search results
• The presence of additional assets like phone numbers

A higher placement means more clicks and more chances to convert. So you should bid as much as possible, right?

Not necessarily. 

An expensive bid can drain your weekly budget in hours, leading to a high cost per acquisition, among other problems. Paying $5 per click isn’t great if your average order value is $15. You’ll need an unfeasible conversion rate to become profitable. 

It won’t work if you want to raise brand awareness, either. Luckily, there’s more than one way to bid for an ad.

A bidding strategy sets bids to meet your objectives, whether that’s more sales, brand awareness, or a desired cost per click (CPC). Google has over a dozen bidding strategies to choose from, but every ad network is different. 

Know Your Bidding Types

Google has three core types of bidding strategies: manual bidding, automated bidding, and smart bidding.

Manual bidding gives you complete control of your paid search campaign. You manually set bids for individual keywords, adjusting them for other factors like location, time, and device. 

Manual bidding demands constant attention. It can be effective if you have a small budget or a lot of experience managing paid search campaigns. But it’s basically a full-time job — which is why Google encourages you to choose a different strategy. 

Automated bidding strategies use machine learning to update keyword and ad group bids to meet pre-set goals like maximizing clicks or meeting a target impression share. 

Google and other paid search networks do a lot of the heavy lifting with automated bidding strategies. You’ll still need to set up the campaign, but they’ll optimize individual bids to meet your goals. 

Fewer things can go wrong with automated bidding, and you’ll have more time to focus on other marketing tasks. But you do relinquish quite a lot of control — something experienced search marketers might not be happy about. 

Smart bidding (also known as auction-time bidding) is a subset of automated bidding that uses Google’s machine learning algorithms to optimize the delivery of ads for conversion quantity or quality. In other words, it will tweak the bid for every single query to increase your sales or profit. 

Smart bidding strategies include Enhanced CPC (where Google adjusts manual bids for clicks that are more likely to convert), Target CPA (where Google meets a set cost per acquisition), and Target ROAS (where Google meets your target return on ad spend). 

This strategy simplifies the entire process, allowing anyone to create profitable PPC campaigns without prior experience. 

Best Practices for Paid Bidding Strategies

Before I show you how my team uses the PPC bidding strategies above, let me cover four best practices I recommend you implement regardless of your strategy.  

Making sure conversion tracking is correct

You can have the perfect bidding strategy for your goals, but it won’t do jack if your ad account has a fundamental problem. You know, like not tracking conversions correctly. 

Setting up conversion tracking for your site isn’t straightforward, so it’s no surprise that this happens. But it’s easy to check in Google Ads. Navigate to the Goals tab in the sidebar and click Summary under Conversions.

You should see your conversions listed, along with one of the following tracking statuses:

• Unverified: Google hasn’t been able to verify your tag yet.
• No recent conversions: Your tracking is verified, but Google hasn’t recorded any in the last seven days.
• Recording conversions: Google has recorded conversions in the last seven days.
• Tag inactive: Google can no longer find your tag. 
• Removed: The conversion action has been removed. 

Google can help you troubleshoot issues if your conversions aren’t tracking properly. Just click the blue Troubleshoot button to see instructions like the ones below:

Keeping your bidding in alignment with your goals

Your bidding strategy has to match your goals. There’s no point using a target CPA smart bidding strategy if you want to convert as many searchers as possible. You’re optimizing for the wrong thing and throwing your daily budget away. 

But your goals also need to be realistic. You won’t get any conversions if your target ROAS is so high that Google can’t meet it. It’s okay to want to improve your ad performance, but don’t try to double your conversions without changing anything else. 

A/B testing

You might not know which bidding strategy is best. That’s fine. Sometimes, my team doesn’t know which approach will be most effective, either. 

The trick is to test them out. Run one bidding strategy for several months without touching anything, then run another with a different goal.  Continue to test and optimize from there. 

Once you’ve got a bidding strategy you like, you can start to A/B test ads, too. 

Don’t change things too often

Evaluating and tweaking your campaigns is important to maximize conversions or ROI. But don’t change things too often. Google needs time to optimize your campaigns and bids, especially if you’re using automated or smart bidding strategies. 

NP Digital Paid Bidding Strategies In Action

You know how bidding strategies work, and you’ve understood best practices. Now, let’s look at how my team has succeeded with various bidding strategies.

Overall Bid Strategy Adjustments In Action

Sometimes, campaigns benefit from a complete shift in strategy. This was the case for a medical device manufacturer struggling to displace legacy competitors in the SERPs. 

Everything about their account setup was complicated. They had too many ad groups and campaigns targeting a mix of conversion goals. 

We decided to simplify everything, consolidating campaigns, leaning into broad match keywords, and optimizing conversions for more valuable online form completions rather than phone calls. 

Results came fast. We saw a 44 percent increase in patient leads from all paid media channels, a 66 percent increase in total lead volume, and a 39 percent decrease in the cost per lead. 

Simplifying campaigns isn’t always the right strategy, however. A recent manufacturing client benefited from a more personalized and precise bidding strategy as they looked to replace organic traffic lost in a site migration. 

This was another shift in strategy that saw us build out specific audience subgroups, and create ad group-specific copy and landing pages to maximize overall return. We also integrated customer match blacklists for 30, 60, and 90-day periods to avoid targeting existing customers. 

Our adjustments resulted in higher revenue and lower costs. Year-on-year revenue increased 87 percent, CPAs decreased 45 percent, conversion value increased 68.4 percent, and CPCs decreased 22 percent. Better still, we could show a 29x return on ad spend within three weeks.

Automated Bidding Strategies in Action

Strategic use of automation in PPC bidding can help you increase efficiencies and maximize performance. That’s exactly what was needed in the case of our e-commerce client that wanted to improve their ad performance and reach more customers.  

Switching to automated bidding strategies across Google, Facebook, and Bing was the first thing we did. This allowed us to simplify the client’s existing campaigns and make sure the basics were executed well. 

Because automated bidding strategies handled a lot of the heavy lifting, our team was able to focus their efforts on creating batch after batch of new ad creatives to combat ad fatigue, give the brand a fresh front, and target different customer pain points.

Automated bidding increased conversions across the board, including a 59 percent increase in Google conversions and a 153 percent increase in Facebook conversions. The Facebook conversion rate increased by a staggering 300 percent.   

Want help driving support for your paid campaigns? Learn more about NP Digital’s paid offerings here.

Smart Bidding in Action

Smart bidding strategies are often the best approach when you need results as quickly as possible. That’s why we employed them for a cloud hosting provider that challenged my team to increase their conversion rates during the client onboarding process — and with a lower paid search spend. 

A simple approach was essential to see results this fast, so we consolidated the company’s existing campaigns from 14 to five and combined broad keywords with auction-timed smart bidding. 

Like the previous client, this bidding strategy gave our team time to create custom ad copy targeting unique value propositions to increase clickthrough rate and relevance.

The results were as big and fast as the client’s expectations. There was a 274 percent increase in conversion across all paid media. Search campaigns, in particular, saw a 59 percent increase in clickthrough rates, a 31 percent decrease in costs per acquisition, and an 8 percent increase in conversion rate. Most impressive of all, our campaigns had the highest leads at the lowest historical cost. 

Portfolio Bidding in Action

Portfolio bidding is an AI-powered smart bidding strategy that Google optimizes for performance goals across multiple campaigns, ad groups, and keywords. 

Rather than give a budget or target to each campaign individually, you use a single strategy across all of them. It’s a great way to save time and make your campaigns more manageable.

When a cloud-based software provider came to us complaining of declining PPC leads and increasing costs, we knew a combination of portfolio and smart bidding strategies was the answer. 

By taking a portfolio approach, we could apply Google’s Target CPA bidding strategy across all of their shared budget campaigns in one swoop, while keeping the client’s segmentation efforts in place.

Our smart bidding portfolio strategies led to optimized budget allocation across 132 campaigns and a 72 percent increase in leads from Google Ads. There was also a 60 percent increase in conversion rates and a 38 percent decrease in cost-per-lead.

FAQs

What is the difference between paid search and PPC?

Paid search is the broad term for the search-based advertising model. It encompasses all of the ads you can place in search engines like Google and Bing, as well as other platforms like Amazon and YouTube.

PPC, or pay-per-click, is a type of paid search advertising where you only pay when someone clicks on your ad.

What is the difference between maximizing clicks and maximizing conversions for bidding?

When you maximize clicks, you tell Google (or another ad network) to optimize your daily budget to get as many people as possible to click on your ad. 

Maximizing conversions, on the other hand, encourages Google to optimize your PPC spend so that as many people as possible convert. This usually means that Google will show your ad to fewer searchers, but these searchers will be more likely to convert.

When should I use manual bidding vs. automated bidding strategies?

Automated bidding strategies will be a better choice, especially if you’re new to search marketing, don’t have time to tweak campaigns, or want to achieve a standard goal like maximizing clicks or conversion values.

But manual bidding can be a great choice if you’re an experienced paid search marketer who wants greater control over your PPC budget and is happy to devote time to optimizing your campaigns.

Conclusion

You can use paid search to achieve a range of goals, from increasing e-commerce sales to raising brand awareness. All it takes is the correct PPC bidding strategy. 

There’s no best strategy, only the best one for your goals. As the examples from NP Digital clients show, you can get excellent results from a variety of different bidding strategies. 
So go ahead and start testing different bidding strategies today. Alternatively, contact my agency to learn how we can generate these kinds of results for your business.