Digital marketing is a complex process; you need to get enough information about how Google Ads pricing strategies work alongside advertising. This article discusses the most helpful elements for a better understanding of how these strategies work in Google advertising campaigns.

 

Significant kinds of Google Ads pricing strategies 

Target strategies and Maximum strategies are two major kinds of Google Ads pricing strategies that we are explaining below:

 

Target strategies 

ROAS (Return On Advertising Spend) is an intelligent Google Ads pricing strategy that does not focus on budget and achieves the highest possible conversion rate depending on the cost. The performance of the Target CPA strategy is very similar to this strategy, but it is based on the price of each conversion and has no focus on the number of modifications.

When using pricing strategies, you need to know what you want from them:

If you have an aggressive CPA or ROAS strategy for your business and want a 20-fold conversion, you will limit the display of ads in many places. In other words, you announce these strategies if you give me 20 times return, show my ads. Unfortunately, this strategy causes the algorithm to be cautious and display ads with obsession. Therefore, resulting in a decrease in the number of impressions, an increase in the price per click, and an overall reduction in the number of entries.

For this strategy to be more effective, it must have lots of data to decide. So when deciding on a campaign, you need to be more realistic.

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Critical rules for applying Target strategies 

Some critical rules when applying target strategies are:

  • If you use one of these pricing strategies for the first time, set your initial targets based on the last 30 days’ CPA or ROAS.
  • It takes about 7 to 14 days to optimize this strategy. So give it time to fix and make no changes to it. This strategy will not work correctly until the learning phase is over.
  • Increase your CPA or ROAS goals by 15 to 20% each time. For example, if in the last 30 days, your previous ROAS had a 5-fold return and now you want to move to a 10-fold return, first switch to a 6-fold return. Please wait for it to run for a few weeks and then increase it by 20%. Avoid aggressive changes to CPA or ROAS to avoid disrupting Google’s optimization system.
  • Refine your goals by layering your audience.

Limiting factors can be your goal if you have a problem with increasing your campaign revenue. So try to increase your CPA by 15 to 20% or lower your ROAS targets. This action will not necessarily work worse.

By acting these, you let Google algorithms know you are taking a risk and using every opportunity to achieve your goals.

If your Google Ads account has been active for at least three months, we recommend you try reducing your ROAS and increasing your CPA at least a week earlier in the busy seasons to allow your account to perform better.

 

Maximum strategies

Maximize Conversion Value or Maximize Conversion strategies are budget-based strategies. These strategies use in campaigns with limited budgets or consume most of their daily budget.

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The minimum criterion for this strategy is 20 clicks per day. For these strategies to be most effective, ensure you include only the most significant conversions in your campaign.

This strategy will work better if you use the Broad Match keyword for more input and information.

When you want the Maximize Conversion, you want this strategy to show as much as possible and get the most conversions based on budget.

These strategies will not affect other campaigns and will give you everything you need.

These strategies also do not matter at the cost of each click. If you have limited price-per-click keywords, put them in another campaign. Maximizing Conversions is not a suitable strategy for these types of keywords.

A common misconception when using these strategies is that you should start the campaign with CPC and convert it to Maximum Conversion if you do not need it. If you do, you make the algorithms shift into learning mode again and be re-calibrated. You can use a new campaign using Maximize Conversion or Maximize Conversion Value strategies.

If you are unsure if a pricing strategy works for a particular campaign, go to the Bid Strategies section through the Setting and Shared Library option, you can find it there.

In the Bid Strategy type column, go to the Bid Strategy type and click on it:

 

bid strategy type

 

This Bid Strategy report will look something like this and give you information about how to optimize your strategy. For example, real CPAs have been rising lately, so we can adjust the target to ensure we get more incoming traffic.

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google ad strategy

 

Even if difficult, you must endure these innovative strategies’ learning duration. Our main recommendation is to leave the campaigns for 7 to 14 days without any changes to get the best performance. One of the biggest problems for digital marketing managers is getting results in pricing strategies while the strategy has not passed its learning processes. So it is best to plan to ensure your pricing strategies’ expectations are properly understood. If in doubt, go to Bid Strategy reports to see how to set it up.