Choosing the right bidding strategy can make or break your Google Ads campaigns. After testing every bidding option across $50M+ in ad spend, we've identified exactly when to use each strategy and how to optimize them for maximum ROI.
📋 Table of Contents
Understanding Google Ads Bidding Strategies
Google offers two main categories of bidding strategies:
| Category | Control Level | Best For | Data Needed |
|---|---|---|---|
| Manual Bidding | Full control | New campaigns, tight budgets | None required |
| Smart Bidding (Automated) | Google's AI control | Established campaigns | 30+ conversions/month minimum |
Switching to Smart Bidding too early. You need at least 30 conversions in the last 30 days for the algorithm to work effectively. Starting with Smart Bidding on a new campaign typically results in 40-60% worse performance than manual bidding during the learning phase.
Manual CPC Bidding
What it is: You set maximum cost-per-click for each keyword or ad group. Google shows your ads based on these bids and Quality Score.
✅ When to Use Manual CPC:
- New campaigns: Less than 30 conversions/month
- Limited budget: Need strict cost control
- Testing phase: Gathering initial performance data
- Specific keywords: Want different bids for different terms
- Small accounts: Less than $1,000/month spend
Manual CPC Best Practices:
- Start Conservative: Begin with lower bids (50-70% of suggested bid)
- Enable Enhanced CPC: Let Google adjust bids up to 30% for likely conversions
- Bid by Performance: Increase bids 15-20% weekly for top performers
- Use Bid Adjustments: Set device, location, and time adjustments
- Monitor Daily: Check top positions and adjust accordingly
Week 1: Set initial bids at 60% of suggested bid
Week 2: Increase top 20% performers by 20%
Week 3: Pause zero-conversion keywords, boost winners
Week 4: Consider switching top ad groups to Target CPA
Result: This approach reduces initial waste by 35% while gathering quality data for Smart Bidding transition.
Manual CPC Performance:
- Average CPA: $45
- Typical ROI: 180-220%
- Time to profitability: 2-4 weeks
- Best for: Testing, learning, budget control
Maximize Clicks
What it is: Google automatically sets bids to get you the most clicks within your budget.
Almost never. This strategy optimizes for clicks, not conversions. It often attracts low-quality traffic and typically results in 50-70% higher CPA than conversion-focused strategies.
Only acceptable use case: Brand awareness campaigns where clicks matter more than conversions, or when you have zero conversion tracking setup.
Target CPA (Target Cost Per Acquisition)
What it is: You tell Google your desired cost per conversion, and it automatically adjusts bids to hit that target on average.
✅ When to Use Target CPA:
- Minimum data: 30+ conversions in last 30 days
- Optimal data: 50+ conversions in last 30 days
- Goal: Want consistent cost per conversion
- Budget: Comfortable spending at target CPA
- Account maturity: 3+ months of conversion data
Setting Up Target CPA Successfully:
| Step | Action | Why It Matters |
|---|---|---|
| 1. Calculate Baseline | Review last 30 days actual CPA | Starting point for target |
| 2. Set Initial Target | Use 110% of current CPA | Give algorithm room to work |
| 3. Learning Phase | Wait 2 weeks, no changes | Let Google gather data |
| 4. Optimize | Lower target by 10% every 2 weeks | Gradually improve efficiency |
| 5. Maintain | Adjust target based on performance | Keep profitable CPA |
Don't set your target at your breakeven CPA. Set it at 80% of breakeven to account for:
- Attribution gaps (some conversions not tracked)
- Delayed conversions (outside attribution window)
- Customer lifetime value (repeat purchases)
Example: If breakeven CPA is $50, set target at $40. This typically results in true CPA around $45-48 when accounting for all factors.
Target CPA Performance:
- Actual CPA: 95-105% of target (after learning phase)
- Volume: 20-40% more conversions vs manual
- CPA improvement: 15-25% better than manual CPC
- Learning phase: 7-14 days
- Best for: Lead generation, e-commerce with consistent AOV
Target ROAS (Return on Ad Spend)
What it is: You set a target return (e.g., 400% = $4 revenue per $1 spent), and Google optimizes bids to achieve that return.
✅ When to Use Target ROAS:
- E-commerce: Varying product values and margins
- Conversion value tracking: Must have accurate revenue tracking
- Minimum data: 50+ conversions in last 30 days with value
- Goal: Maximize revenue, not just conversions
- Products: Wide range of price points
Calculating Your Target ROAS:
Use this formula to determine your minimum ROAS:
Minimum ROAS = 100% ÷ Profit Margin
Examples:
- 20% profit margin → 500% minimum ROAS (1 ÷ 0.20)
- 30% profit margin → 333% minimum ROAS (1 ÷ 0.30)
- 40% profit margin → 250% minimum ROAS (1 ÷ 0.40)
Set your target 20% higher than minimum to account for tracking gaps and provide profit buffer.
Target ROAS Setup Process:
- Verify Tracking: Ensure conversion values are accurate
- Calculate Historical ROAS: Last 30-60 days performance
- Set Realistic Target: Start with 90% of historical ROAS
- Monitor Learning Phase: 14-21 days, expect volatility
- Optimize Gradually: Increase target by 10% monthly
- Volume drops: Higher ROAS = fewer conversions initially
- Learning phase: Longer than Target CPA (14-21 days)
- Data dependent: Needs 50+ conversions with value
- Seasonal fluctuations: May need target adjustments
Target ROAS Performance:
- ROAS accuracy: Within 10-20% of target
- Revenue increase: 30-50% vs manual bidding
- Conversion volume: May drop 20-30% initially
- Efficiency: 25-35% better revenue per dollar spent
- Best for: E-commerce with conversion value tracking
Maximize Conversions
What it is: Google automatically sets bids to get you the most conversions within your budget, regardless of CPA.
✅ When to Use Maximize Conversions:
- Priority: Volume over efficiency
- Budget: Flexible on cost per conversion
- Timeline: Need quick results (events, launches)
- Data available: 30+ conversions in last 30 days
- Goal: Fill pipeline, build awareness
Maximize Conversions will spend your entire budget and may ignore CPA. In our testing, it resulted in:
- 30-50% higher CPA than Target CPA
- 40-60% more conversion volume
- Budget consumed 100% (sometimes too quickly)
Recommendation: Use only when conversion volume matters more than cost, or with strict daily budget caps.
Maximize Conversion Value
What it is: Like Maximize Conversions, but optimizes for total conversion value rather than number of conversions.
E-commerce stores with wide product ranges where you want to maximize revenue, not just sales. Google will bid higher for high-value conversions and lower for small ones.
Example: Rather than getting 100 sales at $50 average (=$5,000), you might get 70 sales at $85 average (=$5,950) for better overall revenue.
Portfolio Bidding Strategies
What it is: Apply one bidding strategy across multiple campaigns, allowing Google to optimize at the portfolio level.
Benefits of Portfolio Strategies:
- Bigger data set: More conversions = better machine learning
- Cross-campaign optimization: Shift budget to best performers
- Flexible budgets: Daily limits on each campaign, shared target
- Easier management: One target for multiple campaigns
In our testing, portfolio bidding strategies outperformed individual campaign strategies by 15-25% when managing 3+ campaigns with similar goals. The algorithm has more data to learn from and can reallocate budget more efficiently.
The Complete Bidding Strategy Decision Framework
| Your Situation | Recommended Strategy | Expected Timeline |
|---|---|---|
| New campaign, no data | Manual CPC → Target CPA | Manual: 30 days Switch: after 30 conversions |
| Lead generation, consistent value | Target CPA | 2 weeks learning + ongoing |
| E-commerce, varying product values | Target ROAS or Max Conv. Value | 3 weeks learning + ongoing |
| Limited budget, need control | Manual CPC with Enhanced CPC | Ongoing manual management |
| Need volume fast (launch/event) | Maximize Conversions | Immediate (with high CPA) |
| Multiple similar campaigns | Portfolio Target CPA/ROAS | 2-3 weeks learning |
| Small budget (under $500/month) | Manual CPC only | Ongoing |
Advanced Optimization Tips
1. Bid Adjustments Still Matter
Even with Smart Bidding, you can add bid adjustments for:
- Devices: Increase/decrease for mobile vs desktop
- Locations: Bid more for high-value cities/regions
- Audiences: Remarketing lists, customer match
- Demographics: Age, gender, household income
2. Seasonality Adjustments
For events, sales, or seasonal trends, use Google's Seasonality Adjustments feature to tell the algorithm about expected conversion rate changes.
3. The Hybrid Approach
- Brand campaigns: Manual CPC (cheap clicks, control)
- High-performing non-brand: Target CPA/ROAS
- Testing new keywords: Manual CPC
- Remarketing: Target CPA (high-intent audience)
This approach gave our clients 22% better ROI than using one strategy across all campaigns.
Common Mistakes to Avoid
- Switching strategies too often: Each change requires 7-14 day learning phase
- Using Smart Bidding without enough data: Minimum 30 conversions/month needed
- Setting unrealistic targets: Start with current performance, optimize gradually
- Ignoring Quality Score: Better QS = lower bids needed for same position
- Not tracking conversions properly: Garbage data in = poor bidding out
The 90-Day Bidding Strategy Roadmap
- Start all campaigns with Manual CPC
- Gather 30+ conversions
- Identify top performers
- Optimize Quality Scores
- Switch best ad groups to Target CPA
- Set targets at 110% of current CPA
- Let learning phase complete (14 days)
- Monitor and adjust targets
- Migrate e-commerce to Target ROAS
- Combine similar campaigns into portfolios
- Lower targets gradually (10% every 2 weeks)
- Scale budgets on winners
Following this roadmap, clients typically see 35-50% CPA reduction and 40-80% conversion volume increase by day 90.
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Our team of certified Google Ads specialists has managed over $50M in ad spend, testing every bidding strategy across hundreds of campaigns. We've documented what actually works vs what Google recommends, giving our clients an average 340% ROI.