Instructor: Bidding strategies.
A bidding strategy is a strategy you allow Google to have
when it comes to showing your ads to users.
There are three main types of bidding strategies.
You can use an automated bidding strategy,
where Google basically does everything,
you can go for semi-automated,
which is where you have a lot of control
but you let Google's algorithm do a bit of work as well.
And then lastly, you can go for a manual bidding strategy,
which is where you have complete control
and make all of the decisions.
I highly recommend that you start off
with using a manual bidding strategy
and then as you get more data in your Google Ads account,
you switch to a specific type of automated bidding strategy
where you focus on a goal such as conversions
or return on ad spend and so on.
Those are different things worth testing.
Google's default option that it picks for us
when you set up your Google ads account is maximized clicks,
which is really bad, which if you remember,
I said you should change this to manual CPC,
which stands for cost-per-click
and then we're going to review
these bidding strategies later on in the course.
Well, that part I was referring to is this part now.
So, there are quite a few bidding options we can pick from.
I believe there's seven in total.
They all vary and they come under the three main types
I mentioned earlier, automated, semi-automated and manual.
So before we dive into each bidding strategy available,
I want to head over to my Google Ads dashboard
and just show you
exactly how you can change your bidding strategy.
Now, it's good to note that you can change
your bidding strategy whenever you'd like.
That can be at the start of the campaign,
halfway through the campaign.
It doesn't matter, it's completely up to you.
So, to change your bidding strategy,
all you need to do is log into your Google Ads account,
go over to the left hand pane and click Campaigns
and then click the campaign
you have in your Google Ads account.
Once you click that, you want to go over
to Settings on the left-hand side,
and then go over to this option right here
which says bidding, give this drop down arrow click,
and you can see at present, we have Manual CPC.
So, what I want to do is click Change Bid Strategy.
And then as you can see,
we now have more options such as Targeted CPA,
which stands for cost per acquisition.
We have targeted ROAS, return on ad spend, maximize clicks,
which is a default one Google selects for you,
we have maximized conversions, target impressions here
and manual CPC and so on.
So what I'm going to do now
is head back over to our PowerPoint slides.
And I'm going to explain to you what all of these mean.
So the first one is target CPA or cost per acquisition.
So target CPA is a fully automated bid strategy
where advertisers set a target, cost per conversion.
I think Google adjust a bid
to generate as many conversions as possible at that CPA.
The cost per click does not matter with this strategy,
the main goal is to generate conversions.
So if we look at this from three different ways,
the objective, how it works and a scenario,
the main objective of target CPA is to get
as many conversions as possible
for your target cost per acquisition.
The cost per click, like I just said,
does not matter, as long as you're getting clicks,
that confer at a profitable cost, business is going to grow.
So how does it work?
So Google will predict which clicks will convert
and how much it will cost that click to convert.
To use this strategy,
you must have conversion tracking set up and you must have
at least one conversion action configured.
Now, if you're working on a brand new Google ads account,
then you won't have this data.
So you can't use this strategy to start off with.
It's good to note as well,
that the more conversion data you have
in your Google ads account,
the closer Google will be able to get conversions
for your target CPA.
So how does this work in a scenario?
So let's run through how this would work
with a live example.
So let's imagine you're a plumber and the conversion action
on your website is a form submission.
You know that you get a customer from one in five forms,
which is a 20% conversion rate.
And you know, that your average job
is worth $300 in profit.
So in order to make money,
you need to get form submissions for less than $60.
And if you're wondering how I figured that out,
it was simply $300 divided by five,
as $300 is my average profit.
And I'm dividing that by my average conversion rate.
So to use this strategy,
you are going to also need your average profit per job.
If you don't know that information,
then it's literally going to be impossible
to determine your target CPA.
In the next video,
we're going to go through the next bidding strategy,
which is target return on ad spend, I'll see you there.