How To Choose The Right Bid Strategy For Lead Generation Campaigns

Welcome back to our series on getting started with value-based bidding for lead gen marketers!

We’ve discussed evaluating whether it makes sense for your business, setting your data strategy, and assigning the right values for your conversions.

Now, we’re going to cover the final step before activating your value-based bidding strategy: choosing the right bid strategy for your lead generation campaigns.

The big benefit of value-based bidding is that it allows you to prioritize conversions that are most likely to drive higher revenue or achieve your specific business goals, such as sales, profit margins, or customer lifetime value.

By assigning different values to different conversion actions, you gain greater control over your bidding strategy and optimize for conversions that deliver the most significant impact.

Whether it’s a purchase, a lead, or a specific action on your website, value-based bidding ensures that your bids reflect the true worth of each conversion, enabling you to maximize your return on investment (ROI).

The bidding strategy you select to optimize for value depends on a few factors. Check out this two-minute video for a quick overview, and then keep reading to dive deeper.

Which Value-Based Bidding Strategy Should You Choose?

With value-based bidding, Smart Bidding predicts the value of a potential conversion with each auction.

• If the bid strategy determines that an impression is likely to generate a conversion with high value, it will place a higher bid.
• If this bid strategy determines that the impression isn’t likely to generate a high-value conversion, it’ll place a lower bid.

Value-based bidding can use data from all of your campaigns, including the conversion values you are reporting, to optimize performance.

It also uses real-time signals, such as device, browser, location, and time of day, and can adjust bids based on whether or not someone is on one of your remarketing lists.

To start bidding for value, ensure the following:

• Measure at least two unique conversion values optimized for your business.
• Have at least 15 conversions at the account level in the past 30 days. (Note: Demand Gen should have at least 50 conversions in the past 35 days, with at least 10 in the last seven days or 100 conversions in the past 35 days.)

You’ve got two bidding strategy options to tell Google how you want to optimize for value:

• Maximize conversion value.
• Maximize conversion value with a target ROAS.

Here’s a quick way to think about each before we dig in further:

Maximize Conversion Value

This option focuses on maximizing conversion value within a defined budget.

It’s suited for advertisers who prioritize driving the highest possible value within a specific allocated budget.

Advertisers often start with this before moving to a target ROAS strategy.

Maximize Conversion Value At A Target ROAS

This option allows you to set a specific target return on ad spend (ROAS) and instructs Google Ads to optimize your bids to achieve that target while maximizing conversion value.

Target ROAS: Why Your Budget Should Be Uncapped

When bidding with a target ROAS, your campaign budget should not be limited or capped.

That may sound scary at first, but let me reassure you that it doesn’t mean you don’t have control over your campaign spend!

Your ROAS target is the lever that manages your spend.

With a target ROAS, you’re telling Google to optimize for value at that specific target rather than find as much value within a specific budget.

So, when your budget is limited, it potentially prevents the system from having the flexibility to find the next conversion at your target.

Setting Your ROAS Targets

You can choose whether to use a recommended target ROAS or set your own.

When setting ROAS targets, use the last 30 days’ return on ad spend as a benchmark.

Google’s target ROAS recommendations are calculated based on your actual ROAS over the last few weeks.

This recommendation excludes performance from the last few days to account for conversions that may take more than a day to complete following an ad click or interaction (such as an engaged view).

You can find more details on target ROAS here.

Get Started With An Experiment

While you can launch value-based bidding directly, you may want to start with a small test using a campaign experiment. This allows you to compare the performance of value-based bidding against your existing bidding strategy and make data-driven decisions.

You have two options to create a campaign experiment:

One-Click Experiment From Recommendations Page

You may see suggestions on implementing value-based bidding on your Recommendations page.

The recommendation to “Bid more efficiently with Maximize conversion value” will show if our simulations identify that your account is measuring two or more unique conversion values and will likely benefit from this strategy.

From this recommendation, you can create a one-click experiment to test the impact of value-based bidding on a specific campaign.

Custom Experiment

You also have the option to create a more tailored experiment to test value-based bidding in your campaign.

Be sure to choose a campaign that receives sufficient traffic and conversions to generate statistically significant results.

Configure the experiment to use value-based bidding, while the original campaign continues to use your existing bidding strategy.

See the instructions here to set up a custom experiment.

How To Jumpstart Value-Based Bidding

You can employ strategies to jumpstart the system, such as initially setting a low ROAS target or starting with Maximize conversion value without a ROAS target.

If you opt to start with Maximize conversion value without a target, be sure that your budgets are aligned with your daily spend goals.

Allow A Ramp-Up Period Before You Optimize

Once you’ve launched value-based bidding, give the system a ramp-up period of two weeks or three conversion cycles. This allows Google Ads to learn and optimize your bids effectively.

When measuring performance, be sure to exclude this initial period from your analysis to obtain accurate insights.

We’ve now covered all the basics for getting started with value-based bidding.

In our last segment, we’ll discuss monitoring and optimizing your performance to drive value for your business.

More resources:

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