Google Ads Bidding Strategies

What Bidding Strategy Actually Does

At its core, bidding strategy tells Google: "This is what I want you to optimize for."

Everything else in your campaign—keywords, ads, targeting, budget—is secondary to this fundamental instruction.

How Google Uses Your Bidding Strategy

When you select "Maximize Conversion Value":

• Analyzes which users are most likely to make high-value conversions
• Determines optimal times to show ads to these users
• Calculates how many impressions each user needs before converting
• Adjusts bids in real-time based on conversion probability and value
• Learns and refines targeting based on what actually drives value

When you select "Maximize Clicks":

• Finds users most likely to click (regardless of conversion potential)
• Optimizes for maximum click volume
• Ignores whether those users actually buy or become leads
• Result: Wasted budget on "clicky" but non-converting traffic

The difference is night and day.

The AI Optimization Era

2024+: Google's AI manages bids automatically, chooses optimal placements, and refines targeting continuously. Your job is to tell the AI what to optimize FOR.

Your bidding strategy is now your primary control lever.

Conversion-Based Strategies (Recommended)

Maximize Conversions

• Automatically sets bids to get the most conversions within your budget
• No target CPA required initially
• Uses machine learning to predict conversion probability

When to Use: New campaigns without conversion history, building initial data

When to Avoid: After you have enough data for target CPA, or when conversion values differ significantly

Maximize Conversion Value

• Automatically sets bids to get the highest total conversion value within your budget
• Requires conversion value tracking
• Prioritizes high-value conversions over low-value ones
• Willing to pay more for higher-value customers

When to Use: When customer values differ significantly (recommended for 95% of advertisers)

Target-Based Strategies (Add After Baseline)

Target CPA (Cost Per Acquisition)

• Sets bids to get conversions at or below your target cost
• Some conversions cost more, some less—average approaches target over time

Scenario	What Happens
Target too aggressive ($30 when $60 is realistic)	Campaign won't spend
Target at current performance ($60)	Optimal - maintains efficiency
Target too conservative ($100)	Google lowers quality standards

Target ROAS (Return on Ad Spend)

• Sets bids to maximize conversion value while achieving your target return
• Higher-value customers get higher bids
• Optimizes for return, not just volume

Other Bidding Strategies (Limited Use Cases)

Maximize Clicks - Usually fails because Google finds "clicky people" who don't convert

Target Impression Share - Pays for visibility regardless of conversions

Manual CPC - Outdated. Google's AI considers thousands of signals in real-time that you can't match

The Critical Choice

Most advertisers instinctively choose "Conversions" thinking more = better. This is wrong for almost all businesses.

Why "Conversions" Can Hurt You

"Conversions" treats all conversions as equal.

Lead Generation Example:

• Lead A: $1,000 service inquiry
• Lead B: $10,000 service inquiry

With "Conversions" bidding: Both = 1 conversion. Google may spend more on low-value leads.

Why "Conversion Value" Is Superior

With "Conversion Value" bidding:

• Lead A: Google sees $1,000 value
• Lead B: Google sees $10,000 value
• Google recognizes B is 10x more valuable
• Willing to bid MORE for high-value customers
• Optimizes for total revenue

Implementing Conversion Value for Lead Generation

Method 1: Service-Based Values

Service Type	Average Value	Conversion Value
Basic service lead	$500	$500
Premium service lead	$2,500	$2,500
Large project lead	$10,000	$10,000

Method 2: CRM Integration (Advanced)

Import offline conversions to track which leads actually close:

Lead Type	Close Rate	Avg Deal	Value to Assign
Type A	10%	$1,000	$100
Type B	40%	$2,000	$800

Google learns to prioritize Type B (8x more valuable).

Performance Impact

Typical improvement from switching to Conversion Value: 30-40% better ROAS

The Critical Timing Question

Setting targets too early or too late both cause problems.

Too Early = Disaster

• You don't know what's realistic
• Unrealistic targets prevent spending
• Campaign fails before it starts

Too Late = Missed Optimization

• Google overspends without constraints
• Efficiency opportunities missed

The Minimum Waiting Period

Business Type	Minimum Wait	Ideal Wait
High volume (100+ conversions/week)	2-3 weeks	4 weeks
Medium volume (10-100/week)	4 weeks	6-8 weeks
Low volume (<10/week)	8 weeks	10-12 weeks

What Happens During Waiting Period

Week 1-2: Learning phase (performance unstable). Don't panic—this is normal.

Week 3-4: Performance stabilizing, patterns emerging, still some volatility.

Week 5-8: Consistent performance, reliable data. Safe to set targets.

The Stability Requirement

Don't just wait for time—wait for stability.

Unstable (Don't Set Target Yet): Monday: 500% ROAS, Wednesday: 150% ROAS, Friday: 400% ROAS

Stable (Ready for Target): Week 1: 280%, Week 2: 310%, Week 3: 295%, Week 4: 305%

Setting Your Initial Target

The Rule: Set your target at (or slightly below) current stable performance.

Example:

• Current Performance: 300% ROAS (stable over 4 weeks)
• Initial Target: 300% (or 280% conservative)

DO NOT:

• Set at 600% because "that's what I want" — Campaign stops spending
• Set at 150% because "let's be safe" — Google lowers quality standards

The First Adjustment Period

After setting initial target, leave it alone for 2-4 weeks.

• Week 1: Performance often dips temporarily. Don't panic—this is normal.
• Week 2-3: Performance recovers, may stabilize at or near target.
• Week 4: Assess results, decide next steps.

Scaling Targets Over Time

1. Improve Campaign: Better ad creative, improved landing pages, new offers
2. Result: ROAS improves from 300% to 380%
3. Wait for Stability: Don't change target after 1 good day. Wait 2+ weeks.
4. Raise Target to Match: Update target ROAS from 300% to 380%
5. Repeat

Example Progression:

Month	Target ROAS	Actual ROAS
1	None	250% baseline
2	250%	250% stable
3	250%	320% improved
4	320%	320% stable
5	320%	420% improved
6	420%	420% stable

68% ROAS improvement over 6 months

The Hidden Feature Most Advertisers Miss

Inside bidding settings you'll find "Customer Acquisition" options that allow you to pay MORE to acquire new customers vs. existing customers.

The Remarketing Problem

Standard Bidding Logic:

• Existing customers = easier to convert
• New customers = harder to convert
• Result: Over-indexes on remarketing

Business Reality:

• Existing customers = limited pool
• Eventually tapped out
• Need new customers for growth

Option 1: Bid Higher for New Customers

1. Upload customer list (email, phone) so Google knows existing customers
2. Set Incremental Value

Customer Type	Base Value	Incremental	Total Value
Existing	$40	—	$40
New	$40	+$25	$65

Result: More budget allocated to new customer acquisition.

Option 2: Bid ONLY for New Customers

Completely excludes existing customers from seeing ads.

When to Use: One-time purchase products, new customer promotions only

Trade-off: Miss remarketing opportunities. Usually "bid higher" is better than excluding entirely.

Option 3: High-Value New Customer Bidding

Customer Type	Bid Value
Existing customer	$40
New customer	$65
New HIGH-VALUE customer	$95

Define "high-value" by spending over threshold, premium service purchase, or high-LTV demographic profile.

Why Automate Budget Management

Manual Scaling Problems:

• Time-intensive
• Reactive rather than proactive
• Inconsistent during weekends/vacations
• No automatic pullback when performance declines

The Increase Rule

Logic: IF performance meets profitability criteria THEN increase budget by percentage

Parameter	Setting
Name	"Budget Increase 3%"
Condition (Lead Gen)	CPA < $30
Action	Increase budget by 3%
Max budget	$500/day (safety)
Frequency	Daily, midnight
Data range	Last 7 days

The Decrease Rule

Logic: IF performance drops below threshold THEN decrease budget

Parameter	Setting
Name	"Budget Decrease 3%"
Condition (Lead Gen)	CPA > $40
Action	Decrease budget by 3%
Min budget	$100/day (maintain presence)
Frequency	Daily, midnight
Data range	Last 7 days

The Buffer Zone Concept

Create space between increase and decrease thresholds:

CPA Range	Action
< $30	Increase budget
$30-$40	No change
> $40	Decrease budget

Why: Prevents constant micro-adjustments from minor fluctuations.

The Compounding Effect

Why 3% daily seems small but isn't:

Timeframe	Starting	Ending	Growth
30 days	$100/day	$242/day	+142%
90 days	$100/day	$1,427/day	+1,327%

Mistake 1: Changing Targets Too Frequently

Bad Behavior: Monday: Set 300%, Wednesday: Lower to 250%, Friday: Raise to 350%

Why It Kills Performance: Every change disrupts optimization. Google re-enters learning phase.

Fix: Set target → Leave 2-4 weeks → Assess → Adjust if needed

Mistake 2: Setting Unrealistic Targets

Problem: Current ROAS: 250%. Target set: 600%. Thinking: "Maybe I'll get 400%?"

Reality: Campaign stops spending. No results.

Fix: Set targets at current performance. Scale gradually.

Mistake 3: Ignoring Conversion Value Setup

Problem: Using "Conversions" when customers have vastly different values.

Fix: Implement conversion value tracking. Assign appropriate values.

Mistake 4: Optimizing for Clicks

Problem: Choosing "Maximize Clicks" because more traffic = more sales.

Reality: Google finds clicky people, not converting people.

Fix: Always optimize for conversions or conversion value.

Mistake 5: Not Using Customer Acquisition Bidding

Problem: Standard bidding over-indexes on remarketing. Growth stalls.

Fix: Enable "Bid higher for new customers." Balance remarketing with acquisition.

Performance Max

• Recommended: Maximize Conversion Value (if tracking value) or Maximize Conversions
• Add Target: After 4-6 weeks stable
• Customer Acquisition: Highly recommended—PMax often over-remarkets without it

Standard Search

• Recommended: Maximize Conversion Value or Maximize Conversions
• Add Target: After 3-4 weeks stable
• Avoid: Maximize Clicks, Manual CPC

Shopping Campaigns

• Recommended: Maximize Conversion Value (essential—product values vary)
• Add Target ROAS: After 4-6 weeks

Display/YouTube

• For Performance: Maximize Conversions or Conversion Value
• For Awareness: Target CPM or Maximize Clicks acceptable

Phase 1: Foundation (Before Launch)

• ☐ Set up Google Ads conversion tracking
• ☐ Implement server-side tracking
• ☐ Verify tracking accuracy
• ☐ Assign values to lead types (if applicable)
• ☐ Choose "Maximize Conversion Value" or "Maximize Conversions"
• ☐ DO NOT set target yet

Phase 2: Baseline (Weeks 1-4)

• ☐ Monitor performance daily
• ☐ Expect learning phase volatility
• ☐ Resist urge to change
• ☐ Calculate average ROAS/CPA
• ☐ Assess stability

Phase 3: Add Target (Month 2)

• ☐ Calculate stable average
• ☐ Set target at current performance
• ☐ Expect temporary dip (week 1)
• ☐ Leave unchanged 2-4 weeks

Phase 4: Scale (Month 3+)

• ☐ Improve campaign (creative, landing pages, offers)
• ☐ Wait for consistent improvement
• ☐ Raise target to match
• ☐ Repeat

Phase 5: Advanced (Ongoing)

• ☐ Upload customer list
• ☐ Enable "Bid higher for new customers"
• ☐ Set up budget increase rule
• ☐ Set up budget decrease rule
• ☐ Use Last 7 days data range
• ☐ Create buffer zone