Comparison Of Bid Strategies In Ad Grants

• Ad Grants
• Tipy
• 16. 08. 2022

Every time a search is performed by a user, the eligible ads go through a so-called ad auction. During this time Google evaluates several factors and only those with sufficiently high Ad Rank will appear in the user’s search results. Among the factors belong e.g., the quality of your ad or the amount of your bid meaning the highest amount you’re willing to pay per click. The bid level is determined by the bidding strategy you use therefore it is vital to consider all your options based on your advertising goals.

Ad Grants compliance requirements do not allow all bidding strategies, some strategies are restricted by the maximum bid level, and some are not. In this post, we will sum up the advantages and limitations of different bidding strategies to help you stay compliant and maximize the Ad Grants utilization.

Most popular bidding strategies in Ad Grants accounts

1. Maximize Conversions

Maximize Conversions bidding strategy falls under the group of automated bidding strategies which takes into consideration the historical performance of campaigns. It automatically sets bids to maximize the total amount of conversions for the budget set by the marketer. In the Google Ad Grants environment this strategy is typically used during the ramp-up phase as the amount of consumed grant is usually lower than the daily budget and high bids aren’t a problem. Commercial accounts marketers on the other hand should be a little bit more careful.

Pros:

• Simple to use
• Usually generates more conversion than manual bidding strategies
• Strategy suggested by Google to use in Ad Grants campaigns
• Most suitable for amateur Ad Grants advertisers
• This bidding strategy isn’t limited by the $2 Ad Grants bid cap

Cons:

• No control over bid level
• Requires at least a few dozens of conversions to work properly
• Cost per click might get very high and even higher conversion rate might thus not result in a lower total cost per conversion

2. Maximize Conversions with Target CPA

Maximize Conversions with a Target CPA is a strategy that helps you boost your conversion volume while you set a specific cost per action, that the system should optimize towards. Just like the previous strategy, it also uses Google’s AI to manipulate bids based on how likely a website visitor is to convert. Our recommendation is to use this strategy in Ad Grants accounts primarily in 2 cases:

• To improve the ad position on the search results page when the competition in the ad auction is high. High target bids usually prompt the system to show the ads more prominently, thus boosting the ad performance.
• To control the bid when the full grant budget is consumed and the CPC is skyrocketing. In this scenario, we recommend setting target bids roughly 10% lower than the average in the last 30 days. This setting will push the algorithm to lower bids, which might help to generate clicks and conversions out of the grant budget.

Pros:

• High level of bidding automation
• More control over bids compared to standard maximize conversions bidding strategy
• Ability to set different target bids for different Adgroups
• This bidding strategy isn’t limited by the $2 Ad Grants bid cap

Cons:

• Requires at least a few dozens of conversions to work properly
• Target bids should be periodically reviewed and adjusted based on the campaign performance
• Frequent target bid changes might lead to poorer performance as the system takes time to learn and recalibrate

3. Maximize Clicks

Maximize Clicks is yet another strategy that uses advanced machine learning to automatically set your bids to help you reach as many clicks within your budget as possible. Our recommendation is to use this strategy in Ad Grants campaigns in the following cases:

• When the average cost per click in a campaign controlled by an automated bidding strategy gets out of hand. Maximize Clicks strategy is the perfect way to intervene and reduce the cost per conversion. This strategy is limited by the $2 Ad Grants bid cap but lower bid caps can be also set.
• When you wish to drive a large volume of cheap traffic to your website e.g., to raise your brand awareness.

Pros:

• Efficient in campaigns optimized for maximum website traffic
• Ability to cap cost per click
• Usually cheaper than maximize conversions bidding strategies
• Does not require conversion tracking setup

Cons:

• Limited by the $2 Ad Grants bid cap
• Usually lower conversion rate
• Usually lower CTR due to lower ad positions

4. Manual CPC

Manual CPC is a manual bidding strategy where you’re allowed to set your own maximum cost-per-click which ultimately gives you more control over the amount you could pay. In Ad Grants accounts, however, the maximum manual CPC amount is $2, which in some cases may not be enough to outbid other advertisers and get a decent ad position. Our recommendation is to use this strategy in Ad Grants campaigns in the following cases:

• When you target keywords with a low level of competition and your main objective is to keep the cost per click down.
• When you want to maintain full control over bids. It is possible to set bids individually for each keyword.

Pros:

• You are in full control of bids
• Prevents wild fluctuations in cost per click
• Usually cheaper than maximize conversions bidding strategies
• Does not require conversion tracking setup

Cons:

• Limited by the $2 Ad Grants bid cap
• Required ongoing monitoring and manual bid updates
• Limited competitiveness
• Google gradually fades away manual bidding strategies

Conclusion

Google requires that all Ad Grants accounts created after 2019 must use conversion-based bidding strategies like Maximize Conversions or Maximize Conversions with a Target CPA for all campaigns. Other bidding strategies can still be used and while Google claims that they might be subject to automatic bid strategy changes, we’ve never experienced that.

We think that automated bidding strategies aren’t always the best choice for all advertisers. While they typically perform the best for most ad grantees, manual bidding strategies still work better in several cases. When using automated bidding strategies, the CPC often reaches extremely high values and thus you’re losing clicks. Our recommendation would thus be to experiment with different bidding strategies, bid levels, and target bids, measure the campaign performance, and pick the one that works well in achieving your marketing goals.

Let us know if you’d like us to help you test and find the optimal bidding strategy for your campaigns.