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Ad bidding is a critical part of what drives Google’s Ad engine forward.
The bidding type you select will tell Google what objectives you’re looking to accomplish, so it can go out of its way to help turn those goals into fruition; and here at Linx Digital, we do not mean it lightly when we say:
Selecting the right bidding strategy for your account could truly mean the difference between crushing your business goals, or flushing money down the drain horrendously—
There are 4 main bidding types that make up for most of Google's functionalities—and in this short article, we'll discuss each one in full, so you can get a better idea of what is the perfect use case scenario for either of them.
But like everything else, it all starts by determining your own goals first. So…
Is it views you’re after? Brand awareness? Increasing the visits to your YouTube channel? Or even converting as many people into your brand as possible?
All of these things are up for grasp and well within your reach inside of Google AdWords.
Since each bid strategy is tailored to different types of campaigns and advertising objectives, it’s well within your interest you first lay out what is your primary goal with your advertising efforts.
So sit down, grab pen and paper, and really define what you’re trying to achieve here. When you're done, you can use this…
Target CPM stands for target cost per mille (or target cost per one thousand impressions.) Which basically means that you're paying Google to give you as many impressions as possible on a specific budget.
Now, the keyword here is “impressions”.
In Google’s eyes, a lot of things can count as an impression. For instance, an “impression” could be someone who started watching your Ad and then skipped immediately, or someone who watched all the way. There is no clear criteria. If anyone just happened to stumble upon your Ad… it counts as an impression. (Not as a view though — Google only counts a view if somebody watches at least 30 seconds of your Ad or clicks on it.)
Regardless of whether this person is part of your target audience or not.
And that’s pretty much the entire scope of this bidding type. It pays Google to start off an auction, serve your Ads out there, and get you as many cheap impressions as possible. Nothing more, nothing less.
And this makes it one of the most basic and limited bidding options available for business owners. You’re basically paying Google for that initial impression. AKA, no optimization is going on in Google’s end. The algorithm cannot possibly be working super hard in your favor since anything can count as an impression for Google really.
And oh, there’s a caveat: since Google’s essentially running an auction to try & get you impressions for your budget, if you set the price too low… it won’t even spend.
Yeah, talk about a headache!
But either way, it is still a good strategy to drive brand awareness and build out a brand with more a long-term focus. BIG brands you’ve probably heard of use it a lot.
So if we talk about good use case in which we would leverage this bidding option… it would be on very specific situations. And we would generally suggest to use it with caution.
Because see, with this option you’re not leveraging Google’s algorithm or tactics in your favor, so these campaigns can turn out expensive if you’re not 100% what you’re doing. Truth be told, the ONLY time we use them, is when we’re trying to get to get impressions on very specific placements. I.e. an individual keyword, a couple of videos. And we will only do this if we know the audience we are targeting very well and are sure they will convert.
So the key here (more than the impressions itself), is the targeting.
Keep it ultra specific: ideally one or two audiences, a singular channel, or a singular keyword.
Here's another one to consider:
For the second bidding option we have Target CPV, which stands for target cost per view, and it's very similar to the target CPM, but with one little difference: this time Google is only charging you by views.
And that’s the best part, actually. Since Google only considers it a “view” when an individual user watches your ad by more than 30 seconds. If it's shorter than that, Google will restrict the spending and ensure you never pay for a view from a person who's not interested in your product.
And this precisely why, in our view, Target CPV is a slightly better option than target CPM since now Google is actually working in your favor to get you people that not only watch your impression… but view your ad.
However, there is one area in which both bidding options are close to identical, and that’s the auction aspect. Similar to Target CPM, Target CPV will tell Google to get you as many impressions as it can under a specific budget.
Which you happen to set, of course. And that can be the issue.
If you don’t know what pricing to set, you might fall under the trap of bidding too low. Google is not going over what you’re by ANY stretch. So if you choose to bid a maximum of $0.50/view, you can put your money on the fact that all of the views that come in through the campaign are going to cost $0.50 or less.
This can be a headache if you don’t know what you’re doing. Which makes this bidding option fairly limited as well.
Here at Linx Digital, we barely use it—but there some cases where it can definitely work wonders for you. Like remarketing, for instance.
You can use it with specific placements, but since Google is optimizing for views, it allows you to go slightly broader with your placements. You can use it to target entire channels, your own YouTube channel, your own audience for remarketing, multiple videos/keywords, etc.
So if your goal is to get views (and nothing else) from a predetermined audience, Target CPV might just be what the doctor ordered.
Here we are starting to enter into the two bidding strategies that we use most often here in Linx Digital, and will directly improve your bottom line when use accordingly.
As its name suggests, maximize conversions is a bidding option that tells Google to go out there in the pursue of one main objective: get you as many conversions as it can on your budget.
Unlike the two prior bidding types, this strategy focuses strictly on conversions, not views nor impressions. And a good thing to mention here is when you use this option for your campaigns, Google will not pay much attention to how much a specific conversion costs.
All its trying to do is jam pack as many conversions as it can into its desired budget. If you place a bid of $1,000, Google will maximize those $1,000 to the best of its ability.
Now, in universe of Google AdWords, the word “conversions” could be defined as a lot of things. From top of mind, they can consist as a:
This is of course, defined by you inside of the dashboard like any other bidding type. And this plethora of options at the time of choosing what metric actually accounts as a conversion really gives you a lot of flexibility to match this bidding option to your goals.
Here in Linx Digital, we use max conversions. A LOT—but with one caveat: only on brand new accounts.
Now, why is that?
See… if your account is brand new, one of your primary goals should be to get as many conversions as quickly as possible to give Google some data to optimize for.
In the beginning you can fall in the trap of having trouble spending because you don’t know what to bid/where to set your targets. Applying max conversions will guarantee you’ll spend no matter what… come hell or high water.
And the cool thing is that… once you reach your first 100 conversions applying this strategy, you can switch over to the last bidding type on our list.
This bidding option is a heaven sent. And its not so astonishingly, the one we find ourselves using the most at Linx Digital.
Target CPA stands for target cost per action, and similar to max conversions, it will work in favor of landing you as many conversions as it can, but with one difference:
Unlike max conversions, this option actually tells Google a set number you feel comfortable spending to get a conversion. And Google will stick to this number. If you only want to pay $10 for a lead conversion, that’s what you will spend. $300 for add to cart? You got it.
Think of this as an evolved version of max conversions. It will go on a quest to get you as many conversions as possible… but under a specific number you set. Google will NOT, by any means, burn your entire budget trying to go over the limit. That’s the main difference it holds from max conversions.
And the long term benefit of using target CPA is clear. It gives you control of the main metric that matters — conversions. But perhaps more importantly, it gives that level of control even while you are scaling up your campaigns (which is HUGE.)
What’s more, if you set a specific budget with target CPA, you can rest assured knowing Google won’t go crazy spending more than it should. In other words, cost per conversion stays the same as ad spend goes up.
Talk about a breath of fresh air!
Now, there is one thing to leave crystal clear:
This type of bidding also charges you per 1000 impressions. And like the other bidding options, if you set the price too low, and Google doesn’t think that pricing is enough to get you conversions, your campaigns simply won’t spend.
And that’s the primary thing that scares most advertisers from using Target CPA. But honestly, that doesn’t have to be your case.
If you leverage target CPA IN TANDEM with Max conversions, you will be able to 1) get enough data for Google to figure out how much budget is required to land conversions, and 2) claim control over your bidding process and scale to the moon.
We made another article detailing how to better utilize both of these strategies together. So if you’re at all interested in putting them to work for your business, be sure to read it here.
If you’re having a hard time selecting the right bidding strategy for your account…
You might be looking for a more hands-on approach to get Ad account off the ground. So if you’d like to find out more about what we could do to help grow your business with YouTube Ads, jump on a free strategy call with us to discover how we can help you out!
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