The Small Business’s Guide to Google Ads Bidding Strategies

Small business owners don’t need to have deep pockets to outperform their competitors on Google Ads — they just need to be strategic. With the right Google Ads bidding strategies, they can drive sales, foot traffic, downloads, subscriptions, and more. Here is everything they need to know about bidding.

The Fundamentals of How Google Ads Bidding Works 

Small business owners must optimize their ad campaigns. After all, digital ad spending will reach $835.82 billion by 2026 — that’s a lot of competition. There are several fundamentals they must understand in order to develop successful Google Ads bidding strategies. 

Understanding the Basics of Bidding 

Google Ads holds an auction whenever ad space becomes available on search results, YouTube videos, blogs, Google Maps, or news sites. The auction determines which ad displays at a specific moment and space. A bid lets a company enter that auction. 

Google charges a business every time someone clicks on an ad it runs. If someone clicks after they’ve met their maximum bid, they do not get charged.

Generally, the higher the bid, the more people will see an ad. Like in a regular auction, the highest bidder usually wins. However, this is not always the case — Google wants to show relevant, high-quality ads to consumers, so it factors in other data. 

There are several ways to bid for ads, including clicks, impressions, conversions, and views. Clicks and conversions are unique to search and display ads, while views are exclusive to video ads. These are the foundation for Google Ads bidding strategies.

Auction-Time Signals Influence Placement

How does Google decide which ads get displayed? The bid — the maximum a brand is willing to pay for cost per click — holds the most weight. The higher bid typically wins if multiple competing companies have similar quality scores. 

A quality score considers the quality of ads, keywords, and landing pages. Better quality means a lower cost per click and better positions. Google also factors in location, device type, time, browser, and the nature of the search. 

Primary Types of Google Ads Bidding

Manual bidding is the primary bid type. Businesses set a maximum cost-per-click bid and tweak the settings themselves. This approach offers more control and helps them stay within their budget. However, it takes more time, is prone to human error, and is less flexible. 

Automated bidding uses Google’s algorithms to adjust bids to achieve the best results, optimizing them over time. It doesn’t offer the same amount of control as manual bidding, but it reduces time spent on bid management without adversely affecting ad campaign performance. 

Smart bidding gets confused with automated bidding a lot. This subset of automated bidding differs slightly — it only refers to strategies that use auction-time bidding. This technique uses auction-time signals to optimize for conversions or conversion value in every auction. 

Best Google Ad Bidding Strategies for Small Businesses

Small businesses don’t need to have deep pockets to outperform their competitors. Carefully planned Google Ads bidding strategies will help them achieve success.

1. Maximize Conversion Value

Maximizing conversion value is best for businesses whose primary goal is to get website visits or increase online sales. It uses historical ad campaign data and considers auction-time signals to find the optimal bid each time an ad is eligible to appear. 

This Google Ads bidding strategy used to be called “Target Return On Advertising Spend” (ROAS). Now, Target ROAS is an optional feature in Maximize conversion value. 

Most campaign types must have at least 15 conversions within the past 30 days to use Target ROAS. It does not necessarily guarantee revenue but aims to bring a specific return on ad spend — a great feature for small businesses who need all the extra funds they can get.

A good rule of thumb companies should follow is to use this feature only if they have used Google Ads before. While it can help them get the cheapest conversions and meet a specific ROI target, they must be comfortable spending up to two times their average daily budget.

2. Maximize Cost per Mille (CPM)

Maximize CPM — meaning cost per 1,000 impressions — is an excellent choice for businesses that want to focus on building brand awareness. They will be charged a fixed price for 1,000 impressions, so staying within budget should be relatively easy. 

Having 1,000 eyes on an ad can be incredibly helpful, even if it doesn’t always translate to conversions. Use cases include gaining more attention than competitors, launching a new product line, or advertising a limited-time sale.

3. Maximize Cost per Viewable CPM

Maximize cost per viewable CPM is the cost per 1,000 viewable ad impressions. It is exclusive to preroll ads, and midroll ad breaks that play before or during videos. It’s ideal for those who want to get the most impressions possible to build brand awareness. 

Professionals start by setting the highest amount they want to pay for 1,000 viewable ad impressions. The higher the figure, the better chance their ad has of winning the auction. 

The great thing about Maximize cost per viewable CPM is that text ads are always given the entire ad space when they win a bid placement — they don’t have to share. Best of all, companies don’t pay for any impressions that are not viewable. 

Small businesses should use this strategy when they care more about their ads being viewed than about clicks or conversions.  

Getting More for Less With Your Google Ads Strategy

Here are some tips small business owners can use to optimize their Google Ads bidding strategies.

Test Strategies With Google Ads Experiments

Small business owners who are unsure about their ad campaign should use Google Ads experiments. This way, they can explore settings and features in a risk-free environment. 

A good rule of thumb is to have a clear hypothesis for each strategy. This way, owners know precisely why their plan was successful or not. 

Use Google’s AI-Powered Bidding Technology

Google’s AI-powered tools — automated and smart bidding — can help businesses adjust to competitive, volatile markets in real time, helping them spend less to get more.

Set Your Cost per Click Lower for Video Ads

A high bid means a high view rate. However, on sites like YouTube, where ads are often unskippable, repetitive advertising can frustrate instead of convert. Companies should consider setting their bid slightly lower to avoid this issue.

Remarket to the People Who Didn’t Convert 

Remarketing targets people who have clicked on or viewed an ad but didn’t convert. The idea is that another ad will give them the push they need. 

There are two ways to create remarketing lists. Professionals can make an audience directly in Google Ads or import an audience from Google Analytics.

It works best for those who are making a name for themselves. It’s also useful for taking traffic from a permanently closed business — people still searching for it will need an alternative.

Focus on the Strategy That Promises the Most

Business owners must consider their goals. Do they want to drive new users to their app? Would they rather get more people to visit their store in person? 

They should focus on the strategy that promises the best outcome for their brand. Clicks, impressions, conversions, and views each promise a unique outcome.

Use Your Competitor’s Branding as Keywords

Using a competitor’s branding as exact match keywords can help firms hijack traffic and increase brand visibility, driving sales. 

Although this is a risky move — it drives up cost per click, can lower relevance, and has a lower chance to convert — it can be a sound business decision in competitive markets. 

The First Strategy May Not Be the Best

Professionals must have patience — ad campaigns take time to be effective. If it’s their first time using Google Ads, they may not get the best results right away. A good rule of thumb is to wait to change things. This way, they can be more sure about what’s working and what isn’t.