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How Does Automated Bidding Work in Google Ads?

Most of the bidding options in Google are automated.

Google wants us to use automated bidding, as it likes to train its own Artificial Intelligence as much as possible.

Most of the time, in fact, automated bidding works very well.

But there are a lot of different options, a lot of automated bid settings. Read on as I tackle them in this blog entry.

Let’s start with the basic ones.

1) Maximize Clicks

Maximize clicks is an automated bid strategy where Google will attempt to get you as many clicks as possible within your given budget. I never use this, as I don’t like this strategy. I don’t care about clicks: I care about LEADS and SALES. So, for Google to get me many clicks as possible does not matter at all. In my opinion, Maximize Clicks seems like a worthless strategy.

2) Enhanced Cost-Per-Click

Enhanced Cost-Per-Click (Enhanced CPC) is an option if you’re using manual bidding. Here, you’re setting a maximum cost-per-click. It is an automated option that is designed to enhance that. Let’s say, you’re bidding $1 per click on something. Google decides that a particular user is more likely to become a conversion for you. And because of this knowledge that Google has, they decide that, maybe a dollar isn’t enough for you to be bidding for this particular user to see your ad. So they are going to enhance that bid for you, and they are going to bid up to twice as much (up to $2 per click) if they think that click is going to convert.

Enhanced cost per click is a combination of manual bidding and automated bidding. It means giving Google the freedom to increase your bid if it thinks it’s going to be worth it for you.

Now, this is actually a strategy that I’d start campaigns with. I used to not like it because I don’t like giving this control to Google. But it actually does work pretty well. I found it starts to train Google’s system for when you are using some of the more advanced automated strategies (when you’re completely handing over your ads to Google).

For ads that are completely automated, you’re not bidding “per click” at all. Instead, you are setting different targets for Google to hit!


CPA stands for Cost Per Acquisition.

This means cost per lead or cost per conversion. What you do here is simply set a target. It’s like telling Google: “I want conversions for $10 each, go find these for me.” Google’s system will then try to do that. It usually does a pretty good job especially if it’s a campaign that has been running for a little while, and Google knows what your conversions look like. You can set a target CPA, and Google will find these for you.

If you’ve been running a campaign and your average cost per lead is $20, you can’t just set a target cost per lead at $5 and expect anything to happen. When you do something like that, your traffic will dry up and you are not going to get anything. But you could set a target cost per lead of $25 and you will get traffic that way. It has to be a reasonable target, or else the Google AI won’t send you the traffic. Over time, however, you can start to bring that target down. Remember that there will always be a bottom limit where the traffic will dry up, but you can start to bring that target down and you will keep on getting traffic at a lower cost for the most part.

It’s important to note that you are still not bidding per conversion. You’re not telling Google “I am only going to pay $10 for every conversion you find me”.  You are still also paying per click so that if you’re not getting any conversions, the traffic eventually does not dry up.

Simply put, you could still be paying, even if you’re not really having much success with the target CPA campaign.

The last thing about target CPA: Google is going to be looking at your conversion, whether there’s conversion or not. If you have multiple conversions going on, that’s going to affect things. If you’re using a Target CPA strategy, you want to make sure that your conversions are mostly equal. 

Conversions are people buying something or submitting a contact form or making a phone call. Whatever that conversion is for you, you don’t want to have one conversion set up for people who look at a certain page on your site and another conversion set up for people who actually bought something.

When Google’s system optimizes for that CPA, they are going to view both of those things as the same. It’s going to horribly skew your results. They’ll optimize the page just for the people looking at the page, rather than for people actually buying things. Keep that in mind if you’re using multiple types of conversions. Now, there is a fairly new option where you can set the conversions at the campaign level that you want Google to optimize for.


The Target ROAS is a strategy where you set up conversion values, so that Google then tries to get the traffic that is going to maximize those values that you’ve set. 

It’s similar to Target CPA where Google tries to find conversions for you for whatever cost you are bidding. But this time, if you’re bidding a target ROAS, you’re setting a multiple budget that you want to achieve. You might target a 300% return. That means for every $100 spent, Google is going to try to find $300 in conversion value for you. 

This works well mostly in eCommerce type of campaigns, especially when different customers have different purchase amounts. You can set that up in your conversions–where the conversion value reported is matched with the value of someone’s order. That is the best situation to use Target ROAS. 


To Maximize Conversions, you need to set a budget and then Google tries to get as many conversions as possible within that budget. I don’t ever use this. I prefer Target CPA instead.

There are a couple instances where I’ve seen some consulting clients use Maximize Conversions, and it does okay. I find that TARGET CPA gives you more control. It’s more variable, so you can set a different Target CPA for each ad group that you are running. With Maximize Conversions, you can’t do that. Most of the time, different Ad Groups that you run have different conversion values.


I don’t use this strategy either, but let’s discuss them anyway since people sometimes ask about this. 

In this strategy, you are basically trying to target a certain ad position on search page results. This is completely useless as far as I’m concerned. You should be focusing on conversions and conversion value. This should have nothing to do with your search page location. The search page location is going to happen on its own, based on how well you were able to get conversions and sales.


This is where you’re trying to outrank certain competitors. Again, this is another strategy I deem completely useless. If you’re able to outrank your competitors while you’re getting a good cost per conversion, then yes, you can do it. But if you’re not, and it’s costing you too much money to outrank your competitors, then don’t do it. You simply won’t get good returns. This just happens on its own based on how the campaign is running. You should not be bidding just for the sole purpose of outranking your competitors.

And that’s it for now! Hopefully the information on this entry helps enlighten you on Bidding via the automated route.