AMBASSADOR MARKETING

Best Google Ads Bidding Strategies to Maximize Your ROI

Google Ads remains one of the best avenues for advertising, given the fact that Google dominates the search engine market. That’s why 80% of companies use Google Ads as part of their pay-per-click (PPC) campaigns.

This number alone gives you an insight into just how competitive Google Ads is. So to succeed, you need a smart bidding strategy, one that helps you win prime placements and stay profitable.

In this guide, we’ll discuss Google Ads bidding in detail and discuss all the possible strategies for achieving your goals while keeping the cost down.

P.S. Struggling to pick the right bidding strategy for your campaigns? This guide shares the top Google Ads agencies that can help you choose, manage, and optimize the right strategy to maximize ROI.

TL;DR:

Google Ads bidding tells Google how much you’ll pay per auction; placement depends on Ad Rank, which reflects bid, Quality Score, ad assets, context, and competition.

Biggest levers:

• Quality Score: expected CTR, ad relevance, landing page experience.
• Ad Rank thresholds: minimum quality needed to show.
• Expected impact of assets: sitelinks, images, calls, and more.
• Context: query, device, location, time.
• Auction competitiveness: more rivals raise required bids.

Strategy menu and best fits:

• Manual CPC: full control at launch, low data, branded terms, niche B2B or local services.
• Maximize Clicks: fast traffic and data for early learning.
• Target CPA: lead gen with predictable acquisition cost; works best with 30 to 50 conversions per month.
• Target ROAS: value-driven eCommerce or mixed margins; needs accurate revenue tracking.
• Maximize Conversions: highest conversion count on a fixed budget with strong history.
• Maximize Conversion Value: highest revenue within budget; shines when values vary.
• CPM or vCPM: broad reach on Display and YouTube.
• CPV: video engagement and remarketing list growth.
• Target Impression Share: brand defense and launch visibility on priority terms.
• Portfolio strategy: share one goal across multiple campaigns to boost learning.

How to choose:

• Define the KPI first: clicks, conversions, revenue, or visibility.
• Match to volume: under 30 monthly conversions use Manual CPC or Maximize Conversions; above 30 to 50 move to Target CPA or Target ROAS.
• Calibrate targets: set tCPA or tROAS within 10 to 15 percent of recent performance and scale gradually.
• Align budget and pacing: if daily caps trigger early, increase budget or use Target Impression Share for steady presence.
• Plan for seasons: raise bids for peak periods and apply seasonality adjustments; pull back after.

Pro tools:

• Bid Simulator, Experiments, trusted conversion tracking, and creative A/B tests guide shifts between strategies.

Outcome to aim for:

• Average ROAS sits near 200 percent; tight alignment of goals, tracking, and bidding can deliver far higher.
• Skilled PPC management accelerates testing, avoids waste, and compounds gains.

What is Google Ads Bidding?

When you're running Google Ads to drive conversions and grow your brand, bidding is the core mechanism that determines how your ads compete in the auction to win impressions and clicks. It’s like telling Google how much you're willing to spend, based on a budget or max CPC (cost per click).

Google then uses those bids to choose winners in real time based on auction-time bidding.

There are several bidding options to choose from. These include manual CPC bidding and automated bidding options that align with specific campaign goals, such as conversions, impressions, or target ROAS.

How Google Ads Bidding Works?

When you launch a campaign, every potential impression goes through a real-time auction. Google compares all ads matched to the search query and uses Ad Rank to decide which ones show up. The campaigns with the top Ad Ranks win the auction and are shown to the user (for example, as a display ad or search ad).

Ad Rank is based on a formula that combines your bid, Quality Score, expected impact of ad extensions, and context signals like location or device type.

With auction-time bidding, especially in Smart Bidding strategies, Google’s AI sets unique bids for each impression based on real-time contextual factors like device, time of day, search query, and even browser or remarketing audience membership.

Although there are a lot of nuances to how Google Ads bidding actually works, here’s a simple example to help explain the process.

Let’s say a brand called Quick-Fit wants to sell its new running shoes online. They set up a Google Ads campaign for search ads to show their products to people who are actively looking for things like "men's running shoes."

As their bidding strategy, they set the target as ‘Maximize Conversions’ because they simply want to sell more of their products.

When someone types in a search term matching the keyword Quick-Fit, Google holds a super-fast competition behind the scenes to decide which companies get to display their ads at the very top of the search results page.

Quick-Fit secures a spot by offering a competitive price and creating an ad that is both relevant and helpful to the searcher. Also, Google might have determined in the backdrop that the user is high-intent, so it displayed Quick-Fit’s ad to meet the target of conversions.

Key Factors that Influence Google Ads Auction

When Google runs an ad auction, your bid plays a key role, but it's only part of the equation. Ad Rank also factors in several other elements, whether you're using manual or automated bidding.

According to Google, these factors influence your ad’s performance in the auction beyond just the bid:

Quality Score

The quality of your ad plays a major role in the auction and is determined by the Quality Score (1 to 10). This depends on the relevance and usefulness of the ad itself and the landing page it leads to.

Quality Score is influenced by three main elements: expected CTR, ad copy relevance to keywords, and the quality of your landing page, including speed, mobile responsiveness, and consistency with keyword intent.

Google’s auction framework evaluates your bid amount, multiplies it by your Quality Score to calculate Ad Rank, and then compares this to competitors. This score also impacts the CPC you pay, with higher scores costing less than the benchmark (a Quality Score of 5). For instance, those scoring a perfect 10 will have a 50% lower CPC.

Ad Rank Thresholds

Ad Rank thresholds mean that even if you set high bids, you may not appear in top positions unless your ad meets quality standards. These minimum thresholds are necessary to rank, regardless of the bid selected for a particular auction. And they’re determined dynamically and differ from auction to auction.

Expected Impact

Another important factor is the ‘expected impact’ from the ad format and ad assets. The latter refers to the information and elements you add to your campaigns, such as copy, address, phone number, image, link, etc.

During the auction, the algorithm determines how the format and assets will help the person searching. If it determines that it does help, you’re in a good position to win.

Context

Context signals also play an important part in determining Ad Rank. Google looks at the search query terms, location, device, time of day, and many other attributes to see if your ad is relevant in the context of the search.

Again, all of this is happening dynamically, but how you set up your campaign and the bidding strategy you select will impact it. Context is related to the fact that Google wants to show high-quality ads to the users–ads that best match their search intent and profile.

Auction Competitiveness

Auction competitiveness refers to the number of advertisers competing for the same user searches, and it significantly impacts your Ad Rank. The more competitors there are, the tougher and more expensive it becomes to win a top ad slot.

In high-competitive auction, many advertisers are vying for the same ad spots, which can drive up the bids and make it more challenging to secure a high position.

On the other hand, in less competitive auctions, you can expect to have your ad run without a considerably high bid.

Manual vs. Automated vs. Smart Bidding in Google Ads

In Google Ads, you can choose between manual and automated bidding strategies (including Smart Bidding), depending on your budget, preference, and experience.

Let’s look at each:

Manual Bidding

With manual bidding, you set your own max CPC, either at the keyword or ad group level. This gives you full control, but also means you need to manage adjustments and performance manually.

Manual bidding is recommended for campaigns that are new and may not have enough conversion data for automated bidding. But anyone can use manual bidding. It’s also useful for advertisers who prefer hands-on control. Experts recommend at least 30 conversions in the past 30 days to make the switch.

Automated Bidding

Automated bidding in Google Ads uses machine learning (ML) and artificial intelligence (AI) to set bids for your ads in real-time automatically. Instead of manually adjusting bids for every keyword, you choose a business goal, like getting more clicks, increasing website visits, or maximizing conversions, and Google's system takes over.

It analyzes a huge number of signals, such as the user's location, device, time of day, and past behavior, to determine the optimal bid for each individual ad auction.

The purpose of automated bidding is to save advertisers time and improve campaign performance by increasing the likelihood of ads achieving their goal.

According to Google, 80% of advertisers use automated bidding.

Smart Bidding

Smart Bidding is actually a subset of automated bidding that uses Google’s AI to make auction‑time bidding decisions based on hundreds of contextual signals like location, device, time of day, ad relevance, and more.

It only involves very specific goals, including Target CPA (cost per acquisition), Target ROAS (return on ad spend), Maximize Conversions, and Maximize Conversion Value.

Pro Tip: Use Google Ads’ Bid Simulator, Experiments, and conversion tracking to compare manual vs Smart Bidding outcomes. You can also A/B test different ad elements.

10 Smart Google Ads Bidding Strategies (And When To Use Them)

When it comes to Google Ads, you have several strategies for bidding to choose from, and each offers its fair share of advantages. No single strategy is inherently better than the other, but some perform better in certain circumstances.

More importantly, the right bid strategy can help optimize your budget, so you spend less for more.

Let’s look at different bidding strategies, their advantages and shortcomings, and when best to use them.

CPC (Manual Bidding)

With Manual CPC, you set individual max CPC bids for keywords, ad groups, and placements, giving you absolute control and flexibility over bid adjustments by device, location, or audience. This approach is ideal for precision targeting and when conversion volume is low.

When setting up CPC, your budget will matter a lot. However, it’s also recommended to look at average CPCs for your industry, so you’re not setting too low or too high a bid. The average CPC across all industries is $2.41 for the search network and $0.59 for the display network.

Pros:

• Granular control over bids and budget.
• Best suited for campaigns with limited data (under 30 conversions/month) where Smart Bidding may underperform.

Cons:

• Labor-intensive and time-consuming to manage.
• No automation or scaling support, limiting growth potential.

When to Use It:

• At campaign launch or when conversion tracking is immature.
• For branded terms, controlling impression share, CPC, and cost is critical.
• Useful in verticals like local electrician or service ads where precision matters.
• In high-precision verticals like local electrician or service ads, and niche B2B campaigns

Maximize Clicks

This is a fully automated budget‑oriented strategy that optimizes bids for the greatest number of clicks within your daily budget. It can be helpful for traffic acquisition or early-stage data gathering.

Pros:

• Easy to set up, just set a daily budget and let Google handle bidding
• Generates high click volume quickly to feed performance data.

Cons:

• Doesn’t optimize for actual conversions or sales.
• Often, higher CPC and lower ROI in conversion-focused campaigns.

When to Use It:

• At the start of Search, Display, or Shopping campaigns without conversion tracking.
• For brand awareness or to build keyword-level performance insights.

Target CPA

This Smart Bidding strategy sets bids to help you achieve a target cost per acquisition (CPA). The algorithm adjusts bids in real time via auction‑time bidding to hit your goal. This strategy is mostly useful for lead generation goals like sign-ups. Also, this strategy offers a more controlled spend, as Google won’t spend beyond the target CPA you have set, which can be the average CPA you want to achieve, realistically.

Pros:

• Provides a predictable cost structure for leads or sales.
• Uses machine learning to optimize and scale conversions within your target.

Cons:

• Requires a minimum of 30 to 50 conversions per month to perform well.
• Doesn’t differentiate based on conversion value, only counts actions.

When to Use It:

For lead generation or e‑commerce campaigns focused on volume at a controlled cost-per-conversion.

Target ROAS

This strategy follows a set target ROAS (tROAS), by optimizing bids for higher conversion value rather than volume. It’s useful when you’re selling products or services of varying prices and margins. This automated strategy is also available within the Smart Bidding subset and Performance Max (Google’s automated campaigns solution).

Google reports that advertisers switching from Target CPA to Target ROAS see up to 14% more conversions with similar overall return.

You basically tell Google how much return you want on every dollar spent on the campaign, and Google’s AI tries to make that happen. But it’s not all that simple, as you have to be strategic with what you set as the tROAS.

Pros:

• Aligns spend to value, not just the count of conversions.
• Maximizes revenue efficiency with a ROAS goal.

Cons:

• Requires accurate conversion value tracking.
• May decrease volume if low-value actions are deprioritized.

When to Use It:

This strategy is for e-commerce or agencies selling multi-service items with variable sale sizes and margin tiers. Don’t use it for non-value actions like downloading an ebook or filling out a sign-up form.

Maximize Conversions

This is another automated bidding strategy (also available in Smart Bidding and Performance Max) that spends your budget to generate the highest number of conversions, regardless of their individual value.

Since you can’t really set a bid cap, this strategy may not always be the most cost-effective. And if you have a tighter budget, you’re better off with strategies like maximizing clicks or tROAS to get the most out of your campaign.

Pros:

• Scales action volume efficiently.
• Lowers cost-per-conversion compared to Manual CPC.

Cons:

• Ignores value differences; may bid for low-revenue conversions.
• May increase CPC since the algorithm targets high-converting, but competitive opportunities.

When to Use It:

When your goal is a higher conversion count on a fixed budget, and you have accounts with strong historical conversion data.

Maximize Conversion Value

This strategy builds on Maximize Conversions by focusing on the total value of conversions instead of just the count.. It tries to drive the highest conversion revenue within your set budget.

A study by Optmyzr looked at over 14,500 accounts and found that Maximize Conversion Value easily beats Maximize Conversions with better ROAS, CPA, and CPC.

Pros:

• Prioritizes revenue instead of just conversion count.
• Ideal for campaigns with multiple sales or service values.
• Delivers strong performance on revenue-related metrics.

Cons:

• Requires comprehensive conversion tracking with accurate value data and reporting.
• May deprioritize low-margin or low-value actions.

When to Use It:

• For accounts measuring diverse conversion values (sales, upsells, services, etc.).
• Especially powerful when combined with portfolio bid strategies.

CPM/vCPM Impressions

CPM or viewable CPM (Cost Per Mille) is a bidding strategy where an advertiser pays for every one thousand times their ad is shown and seen, regardless of whether a user clicks on it.

Instead of bidding on clicks or conversions, the goal of CPM is to maximize an ad's visibility and reach a broad audience. This strategy is mainly for brand awareness, where you just want eyes on the ad and don’t necessarily need the user to take an action.

It is typically used for display and video ads on the Google Display Network and YouTube, where the value is in the number of impressions rather than direct user engagement.

Pros:

• Effective for brand exposure and upper-funnel reach.
• Relatively simple to set up.
• vCPM ensures you're paying only for impressions users can see.

Cons:

• Not optimized for conversions or measurable ROI.
• CPC-equivalent cost can be higher relative to results.

When to Use It:

• For awareness campaigns, video ads, or Display placements.
• As a top-of-funnel tactic before switching to retargeting or Smart Bidding

CPV (Video Ads)

CPV bidding is used for YouTube and other video ads where you're charged when a viewer watches 30 seconds of the video (or the full video if it's shorter) or interacts with the ad.

This makes CPV a cost-effective option for awareness campaigns, since you only pay when users actively engage with your video.

Pros:

• Good for storytelling, awareness, or early funnel content.
• Charges only when users engage with your video

Cons:

• Doesn’t optimize for conversions or ROI
• May generate views that don’t convert downstream.

When to Use It:

• When running video campaigns to build brand visibility
• To grow remarketing audiences ahead of conversion-focused campaigns

Read next: How YouTube Shorts compares with TikTok for video marketers

Target Impression Share

Target Impression Share is an automated bidding strategy in Google Ads that helps your ads appear a specific percentage of the time for a chosen location on the search results page.

For example, you set the target percentage as 80%, and select a desired ad placement, either "anywhere on page," "top of page," or "absolute top of page." Google's system then automatically adjusts bids in real-time to help your ad win enough auctions to achieve that goal.

This strategy is primarily used for brand-building and defensive campaigns, where the main objective is to ensure your brand maintains a strong, consistent presence for important keywords and maximizes its visibility against competitors.

The above-mentioned Optmyzr study also found that top-of-page placement delivers decent CTR and conversion rate, but not the best CPA or ROAS.

Pros:

• Guarantees position dominance for crucial terms like brand names.
• Automates visibility focus without constant bid tweaks.

Cons:

• CTR and conversions are not primary goals
• Can lead to higher CPC with lower ROI
• ROI may be lower if overused on non-branded terms.

When to Use It:

For branded search campaigns or when protecting trademark-heavy terms from competitor encroachment. Also, when visibility is the top priority, such as during product launches or competitive bidding wars

Portfolio Bid Strategy

A portfolio bid strategy applies a single bidding approach across multiple campaigns, rather than managing each campaign individually. It’s not a separate strategy type, but a way to group campaigns under a shared bidding goal.

You can create portfolio strategies using any of the following: Target CPA, Target ROAS, Maximize Conversions, Maximize Conversion Value, or Target Impression Share.

Pros:

• Aggregates conversions across campaigns to improve Smart Bidding efficiency.
• Scale performance strategies across service lines, regions, or brands

Cons:

• Reduces individual control at the campaign or ad group level
• May mask underperformance in weaker campaigns.

When to Use It:

• When managing multiple campaigns with similar KPIs and insufficient individual conversion volume.
• Useful for agencies handling multiple branded or service accounts with  moderate budgets.

Tips for Choosing the Right Bidding Strategy

Results-oriented Google Ads management depends on choosing the best bidding strategy specific to a campaign or the whole portfolio (where appropriate). The average ROAS on Google Ads is 200%. Even at average, it’s profitable, but with a strong strategy, it can be much better.

With so many strategies at your disposal, things can quickly get confusing. Here are some expert tips to help you pick the best strategy every time:

Define Your KPI First

Clarify whether your campaign’s aim is volume (clicks or conversions), revenue (ROAS), or visibility (impressions or views). Google’s Help recommends setting your objective before selecting a strategy.

Traffic objectives suit Maximize Clicks, Manual CPC, or Target CPC, while conversion‑focused goals require Smart Bidding strategies like Target CPA, Target ROAS, or Maximize Conversion Value.

Match Strategy to Conversion Volume

Optmyzr’s analysis of over 14,500 accounts (spending $1.5K–$5M/month) found campaigns with 50+ conversions per 30 days yielded the strongest results. Even Manual CPC performed better once volume hit thresholds.

If you’re generating fewer than 30 conversions/month, start with Manual CPC or Maximize Conversions (without tCPA/tROAS goals), then upgrade once you hit 30–50 conversions.

Use Smart Bidding Wisely

Smart Bidding needs data consistency. Once you're hitting conversion volume, apply a Target CPA or ROAS adjusted ±10–15% from historical performance. Avoid making big changes all at once; scale gradually to avoid disrupting learning and performance.

Budget and Strategy Alignment

If your campaign hits its daily budget too early, it may lose impression share during peak hours. This limits visibility and reduces conversion opportunities.

In such cases, either raise your budget or switch to Target Impression Share to maintain consistent placement, especially if you're targeting competitive keywords or top-of-page visibility.

Watch Out for Seasonal Changes

During peak seasons or major promotions, more advertisers enter the auction, driving up CPCs. Be prepared to increase bids or shift strategies to stay competitive.

Outside of peak periods, scale back to conserve spend. Use historical data and seasonality adjustments in Smart Bidding to adapt without overpaying.

Make the Strategy Work for You

The truth is that no single strategy in Google Ads bidding is the best. It all depends on your campaign goals, the data you already have, and even external factors like the quality of your landing page. So there’s a lot to the so-called ‘best Google Ads bidding strategy.’

Case studies consistently demonstrate the power of well-aligned strategies. One campaign achieved over 5.46× ROAS and nearly 446% ROI on a $18,300 spend.

To get results like that, expert guidance matters. A skilled PPC professional can select, test, and adjust bidding strategies across campaigns to match your unique goals.

This is where a top Google Ads agency can help select the bidding strategy that will work for your specific campaign and industry. inBeat Agency is one such agency that knows how to continuously optimize campaigns and pivot strategy when necessary, without going over budget.

FAQs

How do you optimize ads for maximum ROI?

To optimize your Google Ads campaign for ROI, focus on the conversion value relative to your ad spend. Use Smart Bidding strategies like Target ROAS when you have good conversion tracking and know the average revenue per sale. Combine this with refined landing pages, tight keywords, and strategic use of ad assets.

When should I use Smart Bidding?

Use Smart Bidding when your campaigns generate at least 30-50 conversions per month, and you have clearly defined goals like tCPA or tROAS. It performs best in campaigns using conversion tracking with consistent data and proper budget pacing.

How do I improve CTR for Google Ads?

To increase CTR, improve ad copy relevance, align keywords with user intent, and utilize compelling ad assets (formerly ad extensions) such as site links or callouts. A good CTR can also impact the Quality Score, which in turn improves your Ad Rank. It may also help bring down your CPC and CPA.

What is the best bidding strategy for Google Ads?

There is no one-size-fits-all Google Ads bidding strategy, so there’s no single best option. For new accounts or small budgets, start with Manual CPC or Maximize Conversions to build data. For scaled accounts with consistent conversions, Target CPA or Target ROAS generally delivers better long-term profitability. Always align bidding with campaign goals, spend limits, and conversion volume.

Which type of bidding is most commonly used in Google Ads?

Automated bidding is the most common type of bidding in Google Ads, with target CPA and Maximize Conversion as the go-to strategies for search ads, and target ROAS and Maximize Conversion Value for eCommerce and Performance Max campaigns.

Which campaign bid strategy is best?

The best bid strategy for Google Ads campaigns depends on specific goals, budget, and the availability of conversion data. For lead generation, use Target CPA or Maximize Conversions. For e-commerce, Target ROAS or Maximize Conversion Value are ideal. If your goal is visibility, consider Target Impression Share. When launching a new campaign with low data, start with Manual CPC to control bids until conversion tracking stabilizes.

What are Smart Bidding strategies in Google Ads?

Smart Bidding includes four automated strategies:

• Target CPA: Targets specific cost-per-action.
• Target ROAS: Aims for a target return on ad spend.
• Maximize Conversions: Maximizes the number of conversions within budget.
• Maximize Conversion Value: Focuses on total revenue from conversions.

These use auction-time bidding, conversion tracking, and ML to optimize bids in real-time.