Flexible Bidding Strategies â Could They Be Helping You? | DMA

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Flexible Bidding Strategies â Could They Be Helping You?


Read on for a rapid recapitulation of the six strategies – what they are, when to use them, their requirements and which layers they can be applied to.

* CT = conversion tracking

** Requires an absolute minimum of 15 conversions in the last 30 days at the level the bidding strategy is applied to. The more data you allow AdWords to work with, the more accurate automated bidding should be.

Here are the main points of each strategy for your perusal:

Maximise Clicks

- AdWords adjusts bids to increase the number of clicks

- Adheres to the daily budget or a target spend that you specify

- Target spend is the amount you are willing to spend each day across all campaigns, ad groups and keywords which are using the strategy

- Setting a target spend is particularly useful if you are planning to use the strategy across multiple campaigns, each with different daily budgets

- You can set a maximum CPC bid limit which lets you control the maximum amount you’re willing to pay for each click

- Bear in mind that this strategy does not take into account the quality of clicks generated, merely the volume

Enhanced CPC

- Looks at historical data to ascertain if certain search terms or keyword combinations are more or less likely to result in conversions

- Raises or lowers your max. CPC bid depending on the probability that a particular auction will lead to a conversion

- Bids can be increased by up to 30% - bear in mind that this is on top of existing bid adjustments

- Bids can be lowered down to a maximum of 100% if a particular auction is unlikely to result in a conversion

- Leaves part of your traffic alone, compares eCPC results against the control and adjusts accordingly

- Can be used in conjunction with 3rd party bid management and with any existing audience bid adjustments

For one client here at Periscopix, we applied Enhanced CPC to both Search and Display campaigns. The impact on Display campaigns was apparent within a week – cost of sale had halved! For Search, although conversion rate stayed at a similar level, Enhanced CPC brought in significantly more traffic while the revenue stayed consistent with the quantity of traffic coming through.

Target Outranking Share

- Allows you to outbid a single competitor so that you appear higher than them on the SERP

- You select a percentage of auctions in which you want to rank higher than your competitor – but the higher the percentage, the higher the cost

- Adheres to a maximum bid limit specified by you

- It’s not guaranteed that you will always rank above your competitor because ad rank also takes Quality Score and other auction factors into account

- Outranking share data is updated once a day, and so are bids

- If two companies are competing against each other using Target Outranking Share, then bids will be elevated until one of them reaches the maximum bid limit. Then, the participant with the best bid and quality score will earn the higher ad rank

Target ROAS

- A target ROAS is the average conversion value you want to achieve for each £1 you spend on advertising, e.g. you may want to achieve £7 of sales for every pound spent on ads, so this would be a target ROAS of 700%

- Predicts future conversions and their values, then sets bids to maximise this conversion value while trying to achieve a target ROAS that you specify

- An unrealistically high target ROAS may severely limit ad traffic

- AdWords will try and achieve the ROAS overall – some items may return a much higher or lower ROAS

- Target ROAS also automatically adjusts bids if a user is on one of your remarketing lists

- Existing bid adjustments won’t be used – except when you have set a 100% decrease for mobile

- You can set bid limits for this strategy although Google doesn’t recommend it because it may restrict optimisation

The strategy was applied at ad group level for one of our clients here at Periscopix. A different target ROAS was assigned to each ad group based on performance. The table below shows the target ROAS for the five top-converting ad groups, the ROAS in the four months prior to the strategy being applied, the ROAS in the four months after the strategy was applied and the total conversion value change:

Target ROAS - before & after

In 3 out of 5 ad groups, ROAS has increased after the bid strategy was applied. In Ad Groups B and E, the target ROAS was set lower than the existing ROAS and so ROAS has also fallen, albeit more than expected in Ad Group E. In all but one ad group, the total conversion value change was positive, with increases up to almost 75%. In Ad Group B, the existing ROAS was much higher than the target ROAS, leading to a decrease in total conversion value; consider not applying this strategy to ad groups exceeding your target ROAS already. It’s probably worth giving Target ROAS a whirl if you want to increase your current ROAS to a specific figure and maximise total conversion value.

Target Search Page Location

- Adjusts bids to show in a position chosen by you – either at the top of the SERP or on the first page of results

- Uses data from the last 7 days to determine the bids it sets to reach these positions

- You can set a maximum CPC to avoid overspending

- However, placement is not guaranteed! This is because there are other factors apart from bids that influence your ad rank e.g. Quality Score.

- You can either allow Google to match top of page or first page bids and not set manual bids, or you can set bids yourself but allow Google to raise bids automatically when they drop below the estimate.

Google SERP Top and Other Postiions

Target CPA

- Optimises for conversions at a CPA you specify

- Optimises bids based on real-time data and takes into account whether someone is on your remarketing lists

- Existing bid adjustments are not used, apart from -100% bid decreases for mobile

- Google does not recommend setting maximum CPC limits because it can restrict optimisation – however, if you feel you would like added control, then consider using one

Target CPA has been used successfully with several of our clients here at Periscopix, as you can see from the example below:

Target CPA chart

Target CPA automated bidding was applied on 11th January (shown by the orange line on the graph). Initially, conversions decreased dramatically but quickly started to pick up again and have been rising ever since.

Next Steps

Have a good ponder over whether any of these bidding strategies might match your advertising goals and help to drive search performance – some of them have been used with success here at Periscopix. How about trialling one for 30 days and analysing the impact it has? Happy bidding!

To view this blog written by Charlotte Silveston on Periscopix's website, please click here.

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