Do you want to know which is the best bidding strategy for your service-based Google Ads campaign? In this video, I’ll describe how to use your advertising goals to choose your bid strategy.
Target ROAS Bidding Strategy
If you are in the eCommerce business and you are selling products online then you need to go on the target ROAS bidding strategy. If you are generating leads for your business then you need to go on the target CPA bidding strategy. The reason why the target CPA bidding strategy does not work for eCommerce business.
Because let’s say you have got a product for $79. One person comes to your website, they buy goods worth $79. Another one will come in, he or she may buy $79 or $19 or $5 and you will get different products being purchased by different people and the cart value will be different.
So, you can’t have a target cost per acquisition because if you are targeting to acquire a customer for $50. And you are selling a $19 product. Then at the front end, you are making a loss. I’m not talking about the customer lifetime value but just at the front end. So that’s why you can’t do that. But if you are selling a product and you have got the target return on ad spend (tROAS) bidding applied that means Google is going to try and maximize your return on ad spend.
And it is usually calculated in percentage. So every $1 you spend you want $4 or $5 back or more depending on your profitability. So for an eCommerce business, you need to use a target ROAS bidding strategy.
Target CPA Bidding Strategy
For service-based or lead generation campaigns you need to use the target CPA bidding strategy because a lead is a lead. You know that you need to generate a lead for $10, $50 or $100.
Manual CPC Bidding Strategy
With regards to the manual CPC yes you can start with manual CPC get the data into the account so that the account knows and Google knows what you are looking for and then switch it over to your tROAS ads or tCPA campaigns.
Google reps are going to tell you that you can start with tCPA or tROAS straight off the bat but in my experience and my humble opinion, the way I would do this is to set up your Google Ads campaigns start with manual CPC get the data in and when you’ve got 30 or 50 conversions depending on how much the data is in the last how much the budget is you are spending daily. You will then switch over to tROAS or tCPA. Ideally, you want to do at least 30 conversions in the last 30 days.
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