Bid Strategy

What is a Bid Strategy?

In digital marketing, a bid strategy is a plan or approach for how much you're willing to pay for your online ads. It helps you set a budget and determine the maximum amount you're willing to spend on each click or conversion. The bid strategy guides the platforms where you run your ads to make sure they get the best results for your budget. 

A well-thought-out bid strategy helps control costs, optimize return on investment, and align with campaign objectives. It ensures competitiveness, targets specific audiences, and adapts to market dynamics. Having the ability to adjust your bids in response to changing market conditions helps you stay agile in your approach, making your advertising campaigns more resilient and responsive.

What type of Bid Strategy should you use?

The type of bid strategy you should use depends on your advertising goals. If you want to increase sales, you might choose a strategy that automatically adjusts bids to get more conversions. If you want more control, you can manually set your bids. It's essential to understand your goals and consider your budget before choosing the right bid strategy. 

Common types of bid strategy in digital marketing:

  • Manual CPC (cost per click): You manually set maximum bids for each click, offering full control over bid amounts. Example: You bid $1 for a keyword and pay up to $1 per click
  • Target CPA (cost per acquisition): Focuses on achieving a specific cost per conversion using automated bidding. Example: Set a $20 target CPA, and the system adjusts bids to meet it
  • Target ROAS (return on ad spend): Maximizes ROI from ad spend with automated bidding based on desired ROAS. Example: Target a 400% ROAS, and the system optimizes bids for that ratio
  • Enhanced CPC: Combines manual and automated bidding, adjusting bids based on conversion likelihood. Example: Increase manual bid if higher chance of conversion
  • Maximize clicks: Get the most clicks possible within your budget using automated bidding. Example: With a $50 daily budget, it aims for maximum clicks
  • Maximize conversions: Automated bidding to achieve the highest number of conversions within budget. Example: Optimize bids to maximize conversions for a $100 daily budget
  • Target impression share: Maintains a specific impression share using automated bidding Example: Set 50% impression share, and bids adjust accordingly.

How to choose the right Bid Strategy? 

By making smart bid strategy decisions, you can manage your budget wisely, achieve your campaign goals, and get better results for your business in the competitive digital advertising world.  

Follow these steps to make the best decision:

  • Define campaign objectives: Determine your primary goal, whether it's maximizing conversions, achieving a specific CPA, or increasing brand awareness.
  • Assess budget: Evaluate your budget as different bid strategies may have varying cost implications.
  • Understand your audience: Know your target audience and their behavior to select a bid strategy that resonates with them.
  • Test and monitor: Conduct A/B tests with different bid strategies to see which one performs best. 
  • Align with platform features: Different advertising platforms like Google or Facebook offer various bid strategies. Ensure your chosen strategy aligns with the platform's features.
  • Be flexible: Be open to adjusting bid strategies as campaign dynamics change or to target different segments. 
  • Leverage automation: Use automated bidding when appropriate to optimize bids in real time and save your time.
  • Seek expert advice: If uncertain, consult with digital marketing experts or utilize platforms that offer bid strategy recommendations. 

Final words 

The ever-changing digital advertising landscape makes it difficult to predict the most effective approach. Each bid strategy is designed for specific campaign goals, necessitating a clear understanding of your objectives. Moreover, bid strategies can vary in complexity, requiring a good grasp of technical aspects. Budget constraints may further limit your options. 

Despite these challenges, thorough research and a strategic approach can help you find the most suitable bid strategy for your campaigns, ensuring optimal performance and success.