Profit Based Bidding

Google Ads allows you to bid for ad spots in the form of Profit Based Bidding, which means you want to bid for the ad spot in the search results as cheaply as possible. Based on a bidding system, Google Ads determines which advertiser gets an ad space.

To explain it a little more simply, let's look at the basics for the user. A user enters a search query on Google and is shown appropriate results. All the relevant ads that are shown got there through some kind of auction process. In this the advertisers' budget plays a big role, but in addition the quality score and position in the Google ranking also counts.

Efficient bidding on Google Ads

To make sure you get the most out of your Profit Based Bidding with Google Ads, Google says the following:

• Bid on the user's context in the auction via Smart Bidding: This will give you better performance as you target individual auctions
• Manage bids more efficiently in Google Ads: This will save you time on account maintenance because the bids work automatically
• Use the right bidding strategy: Make sure the strategy aligns with the business goal, automate bidding on the best conversion data, incorporate store visits into the "Smart Bidding" strategy when physical locations are important, and know when seasonal adjustments are important to your bids
• Simplify the account structure and base the campaigns on objectives for automatic bidding: Too much detail in the account structure creates clutter because automatic bidding works for all account structures. In addition, each company does have an objective per campaign, making it easier to deploy automatic bidding
• Test automatic bidding strategies: Focused on one KPI to keep the bidding test simple
• Evaluate the performance of bidding strategies: During "Smart Bidding," it is possible to view the performance of target statistics over time

When you incorporate these tips into your bidding strategy, you will be less likely to use up your budget. This will allow you to gain more profit while bidding. Read more about Profit Based Bidding on Google Ads here.