Google Ads Bidding Strategies Explained: Which One Should You Use?

The two categories: Smart Bidding vs manual

All bidding strategies fall into one of two categories:

• •Smart Bidding: Google's AI sets bids in real time based on conversion data and hundreds of contextual signals (device, location, time of day, audience, etc.). Requires conversion tracking. The options include Target CPA, Target ROAS, Maximise Conversions, and Maximise Conversion Value.
• •Manual bidding: You set the maximum CPC bid for each keyword or ad group. Google doesn't optimise toward a goal — it spends up to your bid and you control the rest. Includes Manual CPC and Enhanced CPC (eCPC, which is being phased out).

Google has been actively steering advertisers toward Smart Bidding for years, and for good reason — with sufficient conversion data, Smart Bidding strategies consistently outperform manual bidding. The caveat is "with sufficient data". Manual bidding is often the better choice early in an account's life.

Maximise Conversions: where to start

Maximise Conversions instructs Google to generate as many conversions as possible within your daily budget, without a specific cost-per-acquisition target.

Use it when: You're in a new campaign with limited conversion history and want to generate volume to build data. You have a fixed daily budget and want to maximise results from it without worrying about hitting a specific CPA. You have enough budget that Google can fully spend it (if your daily budget is too low, Maximise Conversions can overbid on individual auctions).

Target CPA: the right strategy for most service businesses

Target CPA tells Google the average amount you're willing to pay per conversion. Google optimises bidding to hit that target across all auctions.

Use it when: You have a clear cost-per-acquisition target tied to your business economics (your break-even CPA, or your target CPA to hit a specific margin). You have at least 30 conversions in the past 30 days for the campaign to learn effectively.

Setting the target: Start with a Target CPA that reflects your actual recent CPA, not your aspirational one. If your current CPA is $120 and you set a target of $60, the campaign will starve itself of auctions trying to hit an unachievable goal. Set it at your actual CPA, get volume flowing, then reduce it gradually (10-15% at a time) as performance improves.

Target ROAS: for e-commerce with clear revenue data

Target ROAS (Return on Ad Spend) tells Google your desired revenue return per dollar of ad spend — e.g. 400% means you want $4 back for every $1 spent. Google optimises to maximise conversion value while hitting that return target.

Use it when: You're running an e-commerce campaign with transaction values being passed to Google. You have at least 30-50 conversions per month with consistent transaction values. You have a clear ROAS target that reflects your business margins.

The same calibration rule applies: set your ROAS target at your actual recent ROAS before tightening it. Aggressive ROAS targets reduce volume dramatically.

When manual bidding still makes sense

Manual CPC gives you direct control over the maximum you'll pay per click. You set a bid per keyword or ad group and Google doesn't override it.

Manual bidding is appropriate when: A new campaign has fewer than 15-20 conversions per month — Smart Bidding doesn't have enough data to function well and can make erratic bidding decisions. You're managing a very small campaign with a handful of exact match keywords and want complete control. You're in a market where CPC stability matters more than conversion volume optimisation.

The practical advice: start manual or Maximise Conversions, build conversion data, then migrate to Target CPA. Don't stay on manual indefinitely if you have the data to support Smart Bidding — the performance gap grows over time.