Google ads have a lot of automated bidding strategies that can help grow your business in some way.
And here we are going to compare two of the most used bidding strategies: maximize clicks vs maximize conversions.
In this article we can discuss, when they are used similarly, their advantages and disadvantages.
Hopefully, you can get answers to those questions by the end of this article. As i try to explain them from my experience as a Google ads manager.
So, let’s get started…
How do they work?
They almost work in the same way to generate maximum results by spending your daily budget limit.
Maximize clicks, which used to be called “Automatic Bidding”, tries to get you as many clicks as possible regardless of the results. (But, the cost per click can be controlled by setting a maximum cost per click bid limit)
For example, if you have a $100 daily budget, you can receive 1 click or 100 clicks a day depending on your keyword competitiveness & industry.
This bidding strategy is mostly good for starters in learning the advertising process before switching to any other advanced bidding strategies
Maximize conversions, on the other hand, tries to get you as many relevant results as leads, sales, form submits, etc. within your budget.
For instance, for a $100 daily budget, you can have 10 conversions for an average of $9.8, or if Google thinks it is a high probability one, 2 conversions each for $40 to $50 to sell the same product.
The difference is, those higher-priced conversions with certain metrics, historically proved to be more profitable.
Of course, you can also make some adjustments to control how they are going to spend your daily budget.
And those, we are going to see in the following sections.
What are their similarities?
- Machine learning. Unlike manual bidding, they both use automation and take different metrics into account when adjusting their bids in every auction.
- Price fluctuations. They try to reach your daily budget limit by pushing the bids high to get the best keywords (unless you put limit on cost per click or cost per conversion). That’s why we see sometimes Google can bid on keywords that are 3 or 4 times more expensive than the average with these strategies. But there are certain things that you can do to control their activity by putting limits on the prices.
- Exceeding your daily limits. If recently you have been spending less than your daily average, once you start using them they might cost you more than your current expenses. Because they try to reach your average limit.
- Aggregate level bidding. You can use them both for standard bidding and portfolio bidding strategies, depending on whether you want them to run on a single campaign or across multiple campaigns.
- Not a good option for every website. If you have a website that has products with different price ranges, these strategies may not be suitable for you. Because they may impact your bottom line randomly as compared to the target ROAS strategy which brings a certain percentage return regardless of the price of your products. Here in this picture, we took the keyword “Nike Running shoes” as an example that costs approximately $71 per conversion. Let’s imagine your customer clicks that ad then browses your website and chooses one of the options: “Nike Blazer Mid” for $100 or “Nike Air Max 97” for $170. If they buy one of them, the first option leaves you with a loss of $26 after your ad expenses and the second one with a profit of $29. So, to be able to use these strategies, you need to have, products with the same price range or you need to divide your products into different groups according to their price range and run separate campaigns.
- One bidding strategy at a time. You can’t add two or three automated bidding strategies in one campaign. If you have one bidding strategy running and you want to add another one, your latest added bidding strategy is used. Here in this picture, we chose one strategy After we added another one, it canceled the old one automatically.
What are their pros and cons?
- Easy to understand. It is one of the simplest and beginner-friendly automated bidding tools. You can use it to have an idea of how Google advertising works and test different ad campaigns.
- Cost-per-click control. You can control the CPC of keywords by putting them max. CPC limit
- Good for learning the market initially. If you want to start a new campaign, you can learn the CPCs of different keywords before switching to advanced bidding strategies.
- No tracking required. There is no conversion tracking required to start this strategy. You can start immediately with zero data.
- Clicks don’t mean results. It is not a business strategy like target CPA or target ROAS which focuses on results like conversions, revenue, leads, etc. Because it is not clear what is going to happen after someone clicks your ad. They may just enter your page by clicking your ad and exit out of your page if they don’t find any relevance.
- Limitations in the volume. With this strategy, people mostly limit their max. CPC and as a result can’t participate in many auctions for competitive keywords. That in turn brings less traffic and less revenue.
- Changing the strategy. After using maximize clicks some time you may have to switch to other smart bidding strategies to achieve higher returns and more control with your ad spend.
- Inefficient clicks. As this strategy doesn’t care about the results, it can bring clicks as frequently as possible whether or not they are relevant to your business. That is why sometimes it can be a big mistake to use certain keywords like broad match.
- No bid adjustments for date and time. According to Google support, it doesn’t have bid adjustments for date and time. It is a very big downside. Because there are definitely certain times when most businesses don’t work or the chance of making a sale is very little. For instance, weekends, at night, etc.
- Not for all campaigns. Max. clicks also not available for some display ads and App campaigns
- The primary goal in business. Most businesses use this metric called conversion, as it is one of the most important goals in running a business. The more conversions you have, the more revenue you generate. And Google will optimize your bids towards increasing the conversions.
- Used in all stages of business. As compared to maximize clicks which are mostly used at the start of a business, maximize conversions can be used in any stage of a business. You can use them at the beginning to generate more data or choose it later on (better option).
- Device bid adjustments. It can adjust your bids by considering different factors. Although you can’t adjust most of your bids manually, you can make adjustments to mobile device users. For instance, if you want to show less frequently to mobile device users, you can set it as -100% for not showing up altogether.
- Conversion tracking is needed. Although it may work without any conversion tracking, you should have it in place before using this campaign for optimal results. Because if you don’t have any conversion data, it doesn’t know from history which transactions are better compared to others. Ideally, 50 conversions would be good, but 100 would be even better to be used in the future campaigns.
- Learns the system initially. Machine learning needs some time to learn and test your campaigns to work properly. So, sometimes your Cost per conversion might be considerable higher than expected as the system is learning and gathering more data.
- Longer time for small websites & budgets. As it requires learning period at the beginning, if you have a high conversion volume, you can test and adapt your strategy faster. If you have less traffic, you have to wait, or else it may not be the right strategy for you.
- Higher than average costs. As already told, sometimes your conversions can be very expensive if it anticipates a higher chance of converting. The costs may rise up to 3 – 4 times or sometimes even up to 10 times than the average cost of a conversion.
In order to achieve the best performance, you need to change some of the settings in them.
Controlling your Clicks
You need to make sure that your keywords should be targeted and shouldn’t give general meaning without any purpose.
To make your keywords as targeted as possible, use exact match keywords and more descriptive ones like long-tail keywords.
Also, you don’t want to pay for unusually high priced keywords. Therefore, set max. limits to avoid that.
Controlling your Conversions
This strategy has a lot of benefits, but every now and then some of your conversions can be very expensive.
And that’s what keeps away most advertisers from using it.
Your conversions can be much more controlled if you set a target cost per action (target CPA).
It tries to make your conversions at or around that number that you set.
But, to be able to implement that you need to set up your conversion tracking.
Which one is better: Maximize clicks vs Maximize conversions?
As you have probably known, it really depends on your business goals and the business cycle that you are in.
If you want predictability in your expenses and keywords not more than a certain price, then you should go for maximize clicks.
On the other hand, if you are fine with prices going up aggressively from time to time while focusing on conversions, you can use maximize conversions.
Keep in mind though, you need to give them enough time to accumulate and test enough data.
Some people test it for 3 days and conclude that it won’t work for them.
But actually, it doesn’t matter whether you make a profit or loss in that period.
Give it from two to four weeks, before coming to any conclusion.
Comparing Maximize clicks vs Maximize conversion value
If you compare maximize conversion value with maximize clicks, it looks like maximize conversion strategy, but instead of focusing on the price, it focuses on growth.
For example, with conversion, you try to achieve lower and lower price like $50, $47, $45… for your conversions
However, with conversion value, you want to achieve higher and higher revenue like 150%, 180%, 225%… for your given ad spend
This strategy also has one other feature that stands out.
You can use it for any website with different-priced products. Because, it can generate growth in percentages, regardless of product prices.
But, you can’t get the same ROI from every conversion.
In order to get the same values from your conversions, you can set the target ROAS.
You can also use it at the portfolio level to set bids for multiple campaigns.
This strategy is only available for search campaigns for now.
I think by now you have got an idea of which bidding strategy to choose.
As you can see each strategy has its advantages and disadvantages in specific situations.
But, in my opinion, you should A/B test it for yourself to see some real results.
Give it some time, experiencing yourself can teach you more than any textbook out there.
Now, which bidding strategy you want to start first?
Let me know in the comments section below…
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