Bidding Strategy

A bidding strategy is the method you use to determine the maximum amount you’ll bid for a click, impression, or conversion in Google Ads. You can choose between manual or automated strategies, depending on your campaign goal: traffic, visibility, leads, or revenue. Google uses your bidding strategy to determine in real time whether and how much you pay for an ad position. For small and medium-sized businesses, choosing a bidding strategy is crucial because it directly impacts your ad budget and return on investment.

How a bidding strategy works in Google Ads

Every time someone searches for a keyword you’re advertising on, an auction takes place. Google evaluates your bid, your ad quality, and the expected impact of ad extensions. This determines your Ad Rank, which decides whether your ad appears and in which position. Your bidding strategy determines your maximum bid. With manual bidding, you set a maximum amount yourself for each ad group or keyword. With automatic strategies, you let Google bid within your budget based on your campaign goal, such as conversions or clicks. Smart bidding strategies use machine learning and historical data to optimize in real time. This works well if you have sufficient conversion data, but can be unstable during the learning phase.

Why bidding strategies emerged and why they’re even more important now

In the past, you would manually bid on each keyword, which was labor-intensive and required a great deal of expertise. Google introduced automated bidding strategies to help advertisers scale faster and achieve better results without constant attention. Today, smart bidding strategies such as Target CPA and Maximize Conversions are the standard for many campaigns. They respond more quickly to changes in search behavior, device, location, and time of day than a human can. For small and medium-sized businesses without a full-time advertising specialist, they’re a way to stay competitive—provided your conversion tracking is set up correctly. Without reliable data, automation actually yields worse results.

What a bidding strategy delivers for your online ads

With the right bidding strategy, you’ll get more return on the same budget. You only pay for clicks or conversions that align with your goal. A strategy like Target ROAS helps you maximize revenue per euro spent on ads, while Maximize Clicks is suitable if you primarily want to build brand awareness. In practice, we see with SMB clients that a poorly chosen strategy quickly leads to wasted budget: for example, using Maximize Clicks when you actually want leads, or setting Target CPA without sufficient conversion data. A well-thought-out SEO strategy and clear objectives form the foundation. You can then choose a bidding strategy that aligns with these goals and monitor it using analytics to make adjustments as needed.

Which bidding strategy you choose depends on your stage, budget, and campaign goal. A startup ecommerce store with limited data has different priorities than an established service provider with hundreds of conversions per month. Below, you’ll find the main applications and when they’re appropriate.

Lead generation with Target CPA or Maximize Conversions

If your goal is to generate as many leads as possible within an acceptable cost range, choose Target CPA or Maximize Conversions. Target CPA is based on an average cost-per-acquisition that you set yourself—for example, 25 euros per completed contact form. Google then tries to generate as many conversions as possible for that amount. Maximize Conversions aims for the maximum number of conversions within your daily budget, with no cost limit per conversion. This strategy works well for B2B service providers looking to fill their pipeline, provided your conversion tracking is set up correctly and you have at least 30 conversions per month. Without sufficient data, the algorithm will veer in all directions. In practice, we see that small and medium-sized businesses often switch to Target CPA too quickly, while manual bidding during the startup phase provides more control and insight.

Ecommerce with Target ROAS for profit maximization

Ecommerce stores with clear margins and transaction values often opt for Target ROAS (return on ad spend). You set the minimum revenue in euros you want to generate per euro spent on advertising—for example, 400%. Google then optimizes for transactions that deliver that return. This strategy works exceptionally well if your product feed is well-structured, you share your conversion data with Google Ads, and you have sufficient volume. For an ecommerce store with 500 products and 50 to 100 transactions per month, Target ROAS is a logical choice. Please note: Google focuses on high-return products and may skew your product mix. If you also want to promote new products or build brand awareness, combine Target ROAS with a separate campaign using Maximize Clicks or manual bidding. You can find more about ecommerce store optimization on our page about ecommerce store design.

Brand awareness with Maximize Clicks or Target Impression Share

If you’re primarily looking for visibility and traffic, choose Maximize Clicks or Target Impression Share. Maximize Clicks generates as many clicks as possible within your budget, which is useful for content marketing or awareness campaigns. Target Impression Share focuses on the percentage of times your ad appears at the top of search results—for example, an 80% impression share for your brand name. This is relevant if you want to prevent competitors from advertising on your brand name, or if you want to quickly gain visibility in a new market. For an SMB with a new brand or product, this can be a smart first step, but conversions aren’t yet the primary goal. Once you have enough data, switch to a conversion-focused strategy.

When a bidding strategy is the right choice—and when it isn’t

Automated bidding strategies work well if you have at least 30 conversions per month per campaign, your conversion tracking is reliable, and your goal is clear. They save time and optimize faster than manual bidding. But if you’re just starting out, have a limited budget, or are experimenting with new keywords, manual bidding is often better. That way, you retain control and learn more quickly what works and what doesn’t. The algorithm also doesn’t have enough time to learn when dealing with highly seasonal offerings or short-term campaigns. In those cases, opt for manual CPC bidding with bid adjustments based on device, location, and time. A common mistake is setting Target CPA based on a budget that’s too low or insufficient data, which leaves Google no room to optimize and causes your campaign to stall.