If you’re running Google Ads for local businesses or thinking about launching a campaign, one of the most important decisions you’ll make is choosing the right bid strategy.
Your bid strategy determines how Google bids on your keywords, how much you pay per click, and ultimately how your campaign performs.
Today, I’m going to walk you through all the different bid strategies available in Google Ads, explain what I use on my campaigns, and share some important caveats about when conversion-based bidding strategies don’t work.
If you would prefer to watch the content in this post, you can actually check out the video on Google Ads bid strategies that I’ve got above on this page.
Or, if you’d prefer to read you can keep reading below.
Let’s get into the content.
How To Access Your Bid Strategy Settings
Before we get into the strategies themselves, let me show you where to find these settings.
Go to your campaign → Click on “Settings” → Scroll down to “Bidding”
Click “Change bid strategy” and you should see a list of all available bid strategies.
If you don’t see the full list, look for a link that says “Select a bid strategy directly” and click that to see all your options.
Now let’s go through each bid strategy.
All Google Ads Bid Strategies Explained
1) Maximize Clicks
What it does: Tells Google to get you as many clicks as possible within your daily budget.
How it works: Google automatically sets your bids to maximize the number of clicks you receive.
Critical setting: You MUST set a maximum cost-per-click bid limit.
If you don’t set a max CPC, Google will bid whatever they want. You could be a tree service company and get charged $80 for a single click.
Set your max CPC based on what’s reasonable for your industry. Don’t set it too low or you won’t get any traffic, but don’t leave it unlimited either.
When I use it: This is one of my go-to strategies when starting a new campaign.
Why? Because I want to get traffic flowing through the campaign and start collecting conversion data. I need clicks and conversions to build up data before I can switch to a conversion-based strategy.
Pros:
- Simple to set up
- Google handles all the bidding
- Good for starting campaigns
- Gets traffic flowing quickly
Cons:
- Focuses on clicks, not conversions
- You’re not optimizing for leads
- Can waste money on clicks that don’t convert
- Learning phase early on means launching a campaign with this bid strategy will cause your campaigns to start pretty slowly
2) Maximize Conversions
What it does: Tells Google to get you as many conversions as possible within your daily budget.
A conversion is whatever you’ve set up to track. Typically phone calls and form fills for local businesses.
How it works: Google optimizes your bids to get the most conversions possible.
There’s a couple different types of Maximize Conversions bid strategies.
On the one hand, you can choose to not set a conversion cost target, and that’s typically referred to as just Maximize Conversions.
On the other hand, you can set a Target Cost Per Action (also known as Target CPA), and that tells Google to try to get you leads at a specific lead cost.
Sometimes with open Maximize Conversions Google can get a little wild with the cost per click, so if I ever use that I try to keep an eye on it.
I generally set a Target CPA on my campaigns when I switch over to a conversion based bidding strategy.
For example, if I set Target CPA at $25, Google will try to get me leads around $23-$27. Some might be slightly higher, some slightly lower, but the goal is to stay close to that target.
When I use it: After a campaign has 50+ conversions, this is usually where I switch.
Important caveat: Maximize Conversions without a target can sometimes go haywire, especially on campaigns with smaller budgets.
I’ve found it’s very dependent on your daily budget and cost per click. Setting a Target CPA gives Google better guidance and tends to work more consistently.
Also, you need to give conversion based bidding strategies time to learn.
Google says that it takes at least 14 days for a conversion based bidding strategy to learn, but I’ve heard from other people that it can take up to 30 days or more for it to really dial itself in.
Pros:
- Optimizes for actual leads, not just clicks
- Can lower your cost per lead
- Google’s AI is good at finding converting traffic
Cons:
- Requires conversion data first (30-50+ conversions minimum)
- Can be unpredictable without a Target CPA
- Doesn’t work well in all situations (more on this later)
3) Maximize Conversion Value
What it does: Tries to get you the most return on your ad spend (ROAS) possible.
When to use it: This is primarily for e-commerce businesses selling products online.
You feed sales data back into Google like how much each product sale was worth, and Google optimizes to maximize the total value of conversions, not just the number of conversions.
Why I don’t use it: All my clients are local lead generation businesses. We’re generating leads, not selling products online.
If you’re in e-commerce, this could be a great option, but it’s outside my area of expertise.
Target ROAS option: You can set a target return on ad spend (2x, 3x, etc.) but there are limits. You can’t just tell Google “get me 20x ROAS” because they can’t bid effectively enough to achieve that.
Also, there’s so many more things that go into getting a return on a campaign than just the bidding strategy.
4) Target Impression Share
What it does: Optimizes to show your ads in a specific position on the search results page.
Options:
- Anywhere on results page
- Top of results page (top 3 positions)
- Absolute top of results page (#1 position)
Why I don’t use it: My goal is conversions and leads, not ad position.
Optimizing for where your ad shows on the page isn’t as relevant as optimizing for actual leads.
When you might use it: If you’re concerned about outranking competitors or maintaining brand visibility at the top of search results.
The catch: Google will bid whatever it takes to get your ad in that position.
If you want absolute top position but your competitors are paying $50+ per click and you set a max CPC of $10, you won’t get that position.
You’ll either need to remove bid limits or accept that you won’t consistently rank where you want.
5) Manual CPC (Cost Per Click)
What it does: You manually set the cost per click for each individual keyword.
How it works: Instead of Google automatically bidding, you go into each keyword and set exactly what you’re willing to pay.
When I use it: When I want granular control over bidding, especially in industries with wide cost per click ranges.
For example, if one keyword costs $25 per click and another costs $10, I can manually set different bids for each.
Advantage over Maximize Clicks: Manual CPC typically gets traffic faster early on in a campaign.
With Maximize Clicks, Google needs a few days to learn and slowly start displaying ads.
With Manual CPC, Google starts showing ads immediately as long as your bids are competitive. There’s no learning period.
Trade-off: More control and faster traffic, but more work to manage.
You have to set and adjust bids manually instead of letting Google handle it automatically.
My Standard Bid Strategy Approach
Here’s the process I follow on almost every campaign:
Step 1: Start With A Clicks-Based Strategy
When starting a fresh campaign with no conversion data, I always begin with either:
- Maximize Clicks (with max CPC bid limit), or
- Manual CPC
Why? Because Google doesn’t know what a conversion is yet.
If you jump straight to Maximize Conversions, you’re telling Google to optimize for something it has no data about.
Google needs to learn what a conversion looks like for your campaign before it can optimize for them.
Step 2: Gather 30-50 Conversions
I let the campaign run on a clicks-based strategy until I have at least 30-50 conversions.
I used to only wait for about 20 to 30, but I’ve been waiting for more conversion data on a campaign before making the switch over to conversion based bidding.
The key here is that you need to be getting that number of conversions within a 30 day window, or else making a switch to a conversion based bidding strategy might not work too well (more on why that is in just a bit).
During this phase, make sure you have conversion tracking set up properly for:
- Phone calls from your landing page
- Phone calls from call extensions
- Form submissions
Step 3: Switch To Maximize Conversions With Target CPA
Once I have 50+ conversions (and at least 20-30 in a 30 day window), I switch to Maximize Conversions and set a Target CPA.
The Target CPA should be based on what your current cost per lead is.
This tells Google: “I want as many conversions as possible, ideally around this cost.”
Then I take a step back to let Google try to figure itself out for at least 14 days.
That’s the minimum amount of time I want to give Google to try to figure out a conversion based bidding strategy (ideally I want to give even more time).
That’s The Standard Process
Start with clicks → Gather conversion data → Switch to conversions.
Simple, right?
But here’s the thing: This process doesn’t work in every situation.
When Conversion Based Bidding Doesn’t Work
I’m going to share something important that I’ve learned from years of running campaigns:
Conversion-based bidding strategies don’t always work, even when you follow the process correctly.
Let me explain the caveats I’ve discovered.
Caveat #1: Not Enough Conversions Per Month
If you’re not getting enough conversions within a 30-day window, Maximize Conversions tends to struggle.
Example: Your daily budget is limited, and even with decent conversion rates, you’re only getting 15-17 conversions per month.
In my experience, that’s not enough data for Google to work with on a monthly basis.
The conversion-based bidding algorithm needs volume to optimize effectively.
In a situation like that I keep it on a clicks-based strategy. I’ve found this provides more consistency month-to-month than trying to force Maximize Conversions with limited data.
I’ve found conversion-based bidding works better when you’re getting at least 20-30 conversions per month consistently.
Caveat #2: Cost Per Conversion Too Close To Daily Budget
If your cost per lead is too close to your daily budget, conversion-based bidding struggles.
Example: Daily budget is $75, cost per lead is $65.
Google doesn’t have room to operate. The algorithm needs flexibility to bid higher or lower to find converting traffic.
When your cost per conversion eats up almost your entire daily budget, Google can’t optimize effectively.
Google needs room to figure out its bidding.
If you have too many constraints like the budget being limited, high cost per lead, capped impression share, etc conversion-based bidding doesn’t have the flexibility it needs.
I’ve heard many different recommendations on multiples that the daily budget should be compared to the cost per lead, so I don’t have a definitive guide for that.
In general, I would want my daily budget to probably be 3 to 5 times what my cost per lead is to ensure that I’m going to have enough room in the budget for a conversion based bidding strategy to work.
Caveat #3: Maxed Out Search Impression Share
This is a big one that I’ve only figured out through experience.
Search Impression Share is the percentage of total available searches you’re showing up for in your market.
If you’re at 90%+ impression share, you’re pretty much maxed out in your market.
One of my window tinting campaigns has been running for over a year. We’re hitting 93% search impression share.
I’ve tried switching this campaign to Maximize Conversions or Target CPA three separate times.
Every single time, it fails. Performance drops. Cost per lead goes up. The algorithm gets confused.
Every time I switch back to Manual CPC, it works perfectly. 30% conversion rate, consistent performance, everything runs smoothly.
Why does this happen? Google’s conversion-based bidding needs room to explore.
It needs to test different audiences, different times of day, different bid amounts to learn what works.
When you’re already showing for 90%+ of available searches, there’s nowhere left to explore. The algorithm doesn’t have space to optimize.
The Process I Usually Follow and Recap
This is the standard process that I follow for a majority of my campaigns.
- Start with Maximize Clicks or Manual CPC
- Gather 50+ conversions
- Switch to Maximize Conversions with Target CPA
But there’s nuance:
Google needs room to operate. If your campaign doesn’t have that room whether due to limited budget, limited search volume, maxed impression share, or high cost per lead conversion-based bidding might not work.
In those cases, sticking with a clicks-based strategy often provides better stability and consistency.
If you switch to Maximize Conversions and performance tanks, it’s okay to switch back to clicks-based bidding.
Not every campaign is a perfect fit for conversion-based bidding, and that’s fine.
Final Thoughts
Bid strategies aren’t one-size-fits-all.
The standard process (clicks → conversions) works for most campaigns, but there are legitimate cases where sticking with clicks-based bidding is the right choice.
Don’t feel like you’re “doing it wrong” if Maximize Conversions doesn’t work for your campaign.
I have campaigns that have been running on Manual CPC for over a year because that’s what works best for them.
Your goal is results, not checking boxes on what you “should” be doing.
Use what works. Test what might work better. Switch back if it doesn’t.
That’s the real strategy.
Need Help With Your Google Ads Campaign?
If you’re a business owner looking for help with your Google Ads bid strategies or campaign management, I can help.
There’s a link below where you can apply for a free consultation. I’ll review your application personally and if I can help, I’ll reach out to schedule a call.
For more tools and resources I recommend for running Google Ads campaigns, visit downeymarketing.com/tools.
Thanks for reading, and I hope this guide helps you choose the right bid strategy for your campaigns.
If you want to see more Google Ads content, check out this pool service Google Ads post we put together going over a campaign we’ve been running for a client.
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