This post was originally published on August 4, 2021. It was substantially updated on April 29, 2025, with new information.
If you’ve been paying any attention to Paid Search trends over the past couple of years, you probably noticed a fairly apparent pattern. There has been a long line of changes over the years that all point to a shift away from manual optimization and toward automation in both Google Ads and Microsoft Ads. Case in point: Google Ads’ recent deprecation of Enhanced CPC as a bidding strategy.
It seems that with each passing day, there are fewer and fewer options for advertisers that don’t involve some form of automation. So, as artificial intelligence becomes more and more prevalent in the digital marketing landscape, now is the perfect time to go over what Smart Bidding options there are and how they work in your Google Ads and Microsoft Advertising accounts.
First, What’s Enhanced CPC?
Enhanced CPC is a bid strategy that enables the ad platform to increase your bid when there is a strong likelihood that the searcher will convert, and decrease it when they are less likely to convert. It also takes into consideration your existing bid adjustments for demographics, location, time of day, device, and other factors. In the long term, the goal is that your average CPC does not exceed your bid.
In March of this year, Google officially deprecated the Enhanced CPC bidding strategy, one of two manual bid strategies it offered. Microsoft, on the other hand, still offers Enhanced CPC. This leaves Google Ads advertisers with only one remaining manual bid strategy available in Google Ads – Manual CPC. Manual CPC does not raise or lower your bid based on the searchers, and your bid is the maximum that you can possibly pay. If your bid is not high enough to enter the auction, you will not show at all.
So now it’s even more important than ever to familiarize yourself, if you haven’t already, with the many available automated bidding strategies found on the Google Ads and Microsoft Ads platforms.
In the past, advertisers would spend large chunks of their time poring over fields of data, examining it from every angle. They would ask questions like:
- How did our ads perform on different devices?
- How did our ads perform in different geographies?
- How did our ads perform on different days of the week?
- How did our ads perform during each hour of the day?
You could implement bid adjustments based on your findings in order to achieve more optimal and efficient results. Now with automated machine learning, each of those factors and countless others are analyzed at the time of a user’s auction and adjusted accordingly without any advertiser intervention.
So, what bid strategy should you be using? It all depends on what goal you are trying to achieve with your campaigns. For the most part, you could probably group every advertiser on Google Ads and Microsoft Ads into one of two buckets: lead generation or eCommerce, and that’s reflected in the bidding strategies offered.
6 Bidding Strategies for Online Advertising
- Maximize Conversions
If you are looking to generate leads, you’d probably look to utilize the Maximize Conversions bid strategy. Maximize Conversions uses artificial intelligence to set bids to help get the most conversions for your campaign while spending within your budget. It uses AI to analyze your campaign’s historical performance combined with all of those factors mentioned above (device, location, day of the week, hour of the day, etc.) right at the time of the auction to tailor your bid in order to get you the cheapest conversions possible within your desired budget. Since it’s taking into account all of these various factors, any bid adjustments you’ve made will be overridden; however, you can still apply a -100% bid adjustment to devices if you want to exclude them completely.
- Maximize Conversion Value
If you fall under the eCommerce category, you’d want to use the Maximize Conversion Value bid strategy. It’s similar to the Maximize Conversions bid strategy in almost every way, except instead of focusing on getting you the most conversions possible within your budget, it focuses on maximizing the conversion value, which in most cases is usually revenue. Say, for example, you offer a wide catalog of products with a wide range of price points. If you were using Maximize conversions as your bid strategy, it could potentially be optimizing your campaigns towards lower ticket items. If the cost was equal, you’d probably rather make one sale worth $1,000 vs. 10 sales worth $10 each, right? Maximize Conversion Value will automatically bid higher on auctions that could potentially result in greater conversion value than auctions with lesser conversion value.
Both of these bid strategies focus on getting the most you can get while staying within your desired budgets. However, there are also bidding strategies that allow you to give Google or Microsoft some additional constraints or targets to help you generate a more profitable ROI.
- Maximize Conversions with a Target CPA (tCPA)
Target CPA bid strategy allows you to take the Maximize Conversions bid strategy and input your own target cost-per-acquisition that you want Google or Microsoft to hit. It takes all of the signals used in Maximize Conversion bidding, but also factors in your desired target CPA as well. You’re basically telling Google and Microsoft: here’s my budget. Get me as many conversions as possible at X cost per conversion. Some conversions may cost more, and some may cost less, but ultimately, the platform will work to hit that Target CPA.
Additionally, Target CPA allows you to set a different target for each individual ad group if desired. When you use Target CPA in Microsoft, you also have the ability to layer in a Max CPC bid limit. Oftentimes, when utilizing automated bid strategies, we see an increase in cost-per-click. It makes sense, since machine learning is bidding higher on auctions that are more likely to result in a conversion or conversion value. In order to combat ballooning CPCs, you can give Microsoft one additional signal by saying you don’t want to pay more than X amount per click. You can also layer in a Max CPC bid limit in Google, but you have to use what’s called a Portfolio Bid Strategy. You create these Portfolio Bid Strategies in your shared library and then apply them to the campaigns you want.
- Maximize Conversion Value with a Target ROAS (tROAS)
You’re also able to provide a target if you’re using the Maximize Conversion Value bidding strategy as well. But instead of telling Google or Microsoft how much you want to pay for a conversion (Target CPA), you give it a Target ROAS – Return on Ad Spend. Basically, telling the platform that for every dollar you spend on ads, you want to receive X amount back. So, if you have a general idea of your profit margins, you can determine what return you would need on your advertising to be profitable. Google and Microsoft will use AI to predict the value of a potential conversion every time a user searches for a product or service you advertise. It will automatically bid higher when it thinks a search is more likely to generate a higher value conversion. Just like Target CPA, Target ROAS bid strategies allow you to implement different targets at the ad group level.
Microsoft has two bid strategy options when utilizing a Target ROAS approach. You have the option to use Target ROAS, or you can use Maximize Conversions Value with a Target ROAS. The main separating points are that Target ROAS focuses solely on efficiency, while Maximize Conversion Value prioritizes getting you the most conversion value while also trying to maintain that ROAS as well. A slight but notable difference.
While generating conversions is typically the main overarching goal of most advertisers, there can sometimes be a fit for a secondary campaign that serves a different purpose. Sometimes your goal may be to bring a lot of traffic to a website, or sometimes you want to build awareness by making sure your ad shows up at the top of every relevant SERP. There are bid strategies to match those campaigns as well.
- Maximize Clicks
Maximize Clicks is an automated bid strategy that sets your bids to get you as many clicks as possible within your desired budget. This one is pretty straightforward – Google and Microsoft will use all of the automation, machine learning, and AI to get you as many clicks as possible. With the Maximize Clicks bid strategy, you also have the added convenience of implementing a Max CPC bid limit directly in the campaign. You don’t have to create a portfolio bidding strategy like you have to do with the previously discussed bid strategies.
- Target Impression Share
Lastly, there’s the Target Impression Share bid strategy. Target Impression Share sets bids with the goal of showing your ad among top ads, the very first among top ads, or elsewhere among the results. You’re telling the ad platform that when people search for my keywords, I want my ad to show X percent of the time. Some advertisers find this strategy useful when advertising their brand or raising brand awareness. However, I find that when it comes to branded terms, you can achieve similar results in terms of impression share with a manual CPC bid strategy, and oftentimes, it’ll be at a much cheaper CPC.
One final note. Depending on what campaign type you are using (Search, Shopping, Performance Max, Demand Gen, etc.), some bid strategies may be incompatible. For example, if you are running a Shopping campaign, you can’t use the Maximize Conversion Value bid strategy; you have to use Target ROAS or Maximize clicks bid instead. And for Demand Gen campaigns, your options are limited to either Maximize Clicks or Maximize Conversions.
Choosing the right bid strategy for your campaign can make all the difference in the world. Hopefully, this will help you determine which one is right for you to get the most out of your Google Ads and Microsoft Ads campaigns.
