Google Ads Essentials – Bid Automation Comparison
Key Features, Differences, and Success Requirements.
Google Ads provides several automated bidding strategies. In this article I will compare: Maximise Conversions, Maximise Conversions with Target CPA, and Maximise Conversion Value. Each method uses machine learning to optimise bids for ad auctions, but their goals and requirements differ.
Overview of Automated Bidding
Automated bidding in Google Ads uses algorithms to adjust bids in real-time based on user signals such as device, location, and time of day. The objective is to reach specific campaign goals like increasing conversions, managing costs, or maximising revenue.
Maximise Conversions
How It Works
Maximise Conversions aims to get as many conversions as possible within your budget. The system sets bids automatically and does not consider conversion value or control cost per conversion.
Pros
- Simple to set up.
- Works well when every conversion is of similar value.
- Useful for new campaigns with little conversion history.
Cons
- No control over cost per conversion.
- Does not optimise for the value of conversions.
- Needs accurate conversion tracking to be effective.
Requirements for Success
- Reliable conversion tracking.
- A budget large enough to generate conversion data.
- At least some regular conversion volume for the algorithm to learn from.
Issues with Maximise Conversions
One of the main problems with this strategy is related to the Account Default Conversions settings. When you create a new campaign, it defaults to accepting all Account Default Conversions as the target conversions for the campaign.
The issue here is that most Google Ads accounts have multiple conversions and/or conversion types that vary significantly in their practical value to the business. By targeting them equally under the “Maximise Conversions” strategy, Google’s automation will optimise for the conversion that is easiest to achieve. Unfortunately, this is often the weakest or least valuable conversion, which means that more difficult or higher-value conversions may be neglected.
You can adjust which conversions are relevant for each campaign you set up, or you can set the Account Default if you have a limited number of conversion types or reuse the same conversions across many campaigns. Regardless of how you manage it, it’s best to target only those conversions that have the same or similar value to you within any one campaign set to this bid strategy.
Another significant issue with this strategy is the lack of control over the cost per conversion. As a result, conversions may be won at a cost higher than you can afford, potentially exceeding the margin you allocated for marketing expenses.
Lastly, a common problem with this strategy is that your allocated budget may be consumed regardless of the number of actual conversions achieved. Google will automatically spend the budget, even when demand is low or when the cost per conversion increases dramatically.
Maximise Conversions with Target CPA
How It Works
This strategy sets bids to get as many conversions as possible while aiming to keep the average cost per conversion at or below a set target (Target CPA).
Pros
- Controls average cost per conversion.
- Uses historical data to find likely converters.
- Best for campaigns with established conversion data.
Cons
- Needs at least 30 conversions in the past 30 days for best results.
- If target CPA is set too low, conversion volume may drop.
- Not suitable if conversion values vary widely.
Requirements for Success
- A strong history of tracked conversions (minimum 30 in the last month).
- Stable campaigns with minimal ongoing changes.
- Target CPA set based on real historical data.
- Consistent definition of conversions.
Issues with Maximise Conversions at Target CPA
The primary issue with this bid strategy arises when the Target CPA (tCPA) value is set too low. Setting an unrealistically low tCPA can cause the campaign to crash and cease serving.
This happens because Google’s system cannot achieve conversions at the desired cost. This could be due to a lack of available conversions in the market, pricing you below the market with your low target, or competitors willing to pay more per conversion for the same or similar keywords. While these reasons are similar, the latter scenario is purely a matter of being outbid.
To resolve this, you can typically raise the tCPA bid. However, if the campaign crashes, you may need to temporarily switch to Max Conversions.
The simplest way to select an appropriate tCPA bid is to accept the bid value recommended by Google in the Ads platform when transitioning from Maximise Conversions to Maximise Conversions at Target CPA. Alternatively, you can choose a slightly higher or lower tCPA bid amount based on your competitive stance and budget for winning conversions.
Starting with a tCPA bid strategy without first using a Maximise Conversions strategy is less likely to succeed.
Maximise Conversion Value
How It Works
This strategy aims to maximise the total conversion value (such as revenue) from your budget, regardless of the number of conversions. It prioritises higher-value conversions.
Pros
- Focuses on maximising revenue rather than just conversion count.
- Best when conversions have different values.
- Can be combined with target ROAS for additional control.
Cons
- Requires accurate tracking of conversion values.
- Needs at least 30 value-based conversions in the last 30 days for optimal performance.
- Average CPA may increase if the algorithm prioritises high-value conversions.
Requirements for Success
- Set up dynamic or custom conversion value tracking.
- Have enough conversions with assigned values (minimum 30 in the last month).
- Clear business goals focused on value, not just volume.
- Budgets that allow the system to optimise effectively.
Issues with Maximise Conversions Value
This is where it’s important to ensure that your targeted conversions have realistic values attributed to them. They do not need to be the ‘actual’ value of the conversion. A lot of the time we just weight them based on the index of $1, where $1 (full value) is the most valuable conversion type, and where $0.01 is set as the least valuable conversion type.
The most common issue with lead generation businesses is that conversion types are not properly weighted by their realistic value to the business. A phone call click, versus a 15-second call, versus a 10-minute call all likely have different values, so ascribing a single equal value to all clicks on a phone number link is not really measuring the true value of that action. It’s just an approximation of the average, and optimisation is likely toward what is easiest for Google to achieve, not necessarily what works best for you.
Comparing phone call clicks to a Signup or Subscribe action is also not 1:1. So getting these values suitably balanced is the key to driving growth in the right areas for Maximise Conversion Value.
With eCommerce stores, there is a less obvious trap:
Optimisation in Maximise Conversion Value could bias towards selling lower margin items simply because they sell more easily, instead of optimising toward those with greater profitability. So even with eCommerce systems, Maximise Conversion Value bidding has its potential issues.
Additional Tips
- Allow each strategy time to learn before making changes.
- Regularly review campaign performance and adjust budgets or targets as needed.
- Test strategies before full implementation.
- Keep conversion data and tracking accurate and up to date.
Conclusion
Choose Maximise Conversions for simplicity and highest conversion count. Use Target CPA to control costs when conversion value is consistent and data is available. Select Maximise Conversion Value if you want to prioritise overall revenue and can reliably track conversion values. But aside from the obvious Pros and Cons for each, there are several other ‘traps’ to avoid if selecting any of these strategies – so be aware of what to watch. Success depends on meeting the data requirements and setting clear and concise campaign goals tailored to your situation.
