Vertical markets and the suggested smart bid strategies
In our last blog post we discussed the various bidding strategies that you have at your disposal through Google Ads. Now we're going to cover the differences in the strategies in a little more detail and outline which verticals each is better suited to.
Of course, our recommendation here is to always test before fully adopting smart bidding but this article will hopefully provide some knowledge on which strategy to test first, based on your objectives and sector.
Naturally, certain strategies lend themselves to different verticals and are more appropriate for certain advertisers. It’s important to assess each option and determine whether it is the right option for you.
Below are the verticals and suggested strategies for businesses within these sectors:
Retail – Target Return on Ad Spend (ROAS)
Target ROAS is useful for retailers as it predicts conversion values for each auction, enabling advertisers to maximise revenue and life time value to their customers through Paid Search. This comes in very handy for retail advertisers, who want to increase their sales while ensuring maximum value to their customers. This is commonly used within Shopping campaigns to analyse the campaigns effectiveness. Retailers generally aim for a target ROAS of 800% +, depending on the margin in the product.
Insurance – Target CPA
Insurance companies focus on lead gen and customer acquisition, so Target CPA (cost-per-acquisition) would be the better suited strategy. An insurance company would not want a click on their ad to be counted as a conversion, rather, they want the user to actually sign up to a policy. Therefore, by using this strategy, insurance companies' Google Ads accounts will optimise to maximise conversions at the target CPA. Google Ads will recognise if a click has a high chance of leading to a conversion and in this instance will raise the bid, similarly it will recognise if a click has a lower chance of leading to a conversion and it will then set the bid as low - perfect for insurance companies who purely want to maximise acquisitions.
Finance – Target ROAS + Target CPA
As mentioned above, the target ROAS strategy predicts conversion values for each and every auction. Often finance companies carry out analysis on customers and predict metrics such as average lifetime value or churn rate. It may transpire that some keywords drive a better quality of customer than others, based on the longevity of that customer (for example). This can be a particularly powerful bidding strategy to implement if you are importing revenue metrics as well as conversion counting in Google Ads.
Travel – Target ROAS
Target ROAS can work particularly well for Travel Advertisers. Holiday packages and booking can vary in price quite significantly and these are heavily influenced by locational terms. Target ROAS can help advertisers by using machine learning to automatically increase bids for more valuable searches that may yield more revenue. As an example, the Google Ads system may choose to upweight bids in a specific auction for a user that is in market for a holiday and searching ‘barbados holidays’ and reduce bids for a similar auction where a user is searching ‘uk holiday’. If you work with defined and limited budgets this kind of smart bidding can really help you maximise return on your investment.
Charity – Maximise Conversions (Grant Account)
Charities rely solely on donations to be able to operate and help their cause. So, it comes as no surprise that the suggested bidding strategy for NFPs would be Maximise Conversions. If you haven’t already figured it out – the name is a bit of a giveaway, this strategy uses an advanced machine learning algorithm that automatically sets bids to maximise conversions based on your spending budget. Ideal for charities who have a limited budget but obviously need to maximise their donations to function efficiently.
While these aren’t set in stone, these are the verticals and the strategies that would be suggested based on the general objectives of companies in each vertical. Not all companies in each vertical are the same and some may have a different set of objectives – in which case you can adjust your strategy based on these suggestions for the vertical with the appropriate strategies.
Check out our previous blog - 'Google Ads Smart Bidding' to refresh your knowledge on how each strategy optimises and performs or move on to our final blog in the series - The Do's and Don'ts of Smart Bidding Strategies.
If you’re having trouble figuring out which bidding strategy is suitable for your business or want to learn how you can maximise the effect of you bidding strategies, get in contact with us today for your free Google Ads audit!