What Is a Bid Strategy?
A bid strategy is the overarching approach you use to determine how much to bid for each ad placement in Google Ads. The right bid strategy depends on your campaign objective, the amount of conversion data available in your account, and how much control versus automation you prefer. Google Ads offers two broad categories of bid strategies: manual and automated (also called Smart Bidding).
Manual bid strategies give you direct control over bid amounts. Manual CPC is the most hands-on option: you set a maximum cost per click for each keyword or ad group, and Google uses that ceiling in each auction. This approach works well in new accounts or campaigns without sufficient historical data, and it gives experienced managers granular control to adjust bids based on observed performance patterns.
Automated bid strategies use Google's machine learning to adjust bids in real time based on the likelihood of a conversion for each specific auction. These are called Smart Bidding strategies and they include Maximise Conversions (spend the budget to get as many conversions as possible), Target CPA (aim for a specific cost per conversion), Maximise Conversion Value (maximise total revenue within budget), and Target ROAS (achieve a target return on ad spend). Smart Bidding strategies factor in dozens of contextual signals at auction time, including the user's device, location, time of day, browser, recent search history, and whether they are on a remarketing list. These signals are beyond what any manual bidder can process, which is why Smart Bidding often outperforms manual bidding once sufficient conversion data exists.
The transition from manual to automated bidding requires data. Google's smart bidding algorithms need at least 30 to 50 conversions per month per campaign to make reliable predictions. For South African businesses with smaller budgets or lower conversion volumes, starting with manual CPC or Maximise Clicks (which focuses on traffic volume rather than conversions) while conversion data accumulates is the practical approach.
Bid Strategy In Practice
The two scenarios below are illustrative examples, not Juicy Designs client results. The figures indicate the scale of effect that bid strategy work typically produces, so treat them as indicative rather than measured.
Picture a Pretoria-based e-commerce retailer selling homeware that runs two campaigns: one for branded keywords (its own brand name) and one for non-branded product category keywords. For the branded campaign, the retailer might use Manual CPC with a high bid, because branded traffic is high-intent and guaranteed top positions matter. For the non-branded campaign, with enough conversion data accumulated over six months, the retailer could move to Target ROAS set at 400% (for every R100 spent, the aim is R400 in revenue). Google's algorithm would then adjust bids up for users showing strong purchase signals and down for those less likely to buy, which would typically improve the overall return without constant manual adjustment.
For service-based South African businesses that generate leads rather than online purchases, Target CPA is often the most effective strategy once the data threshold is met. Imagine a Johannesburg digital agency managing Google Ads for a plumbing company: it might set a Target CPA of R80 per lead form submission after working out that the business closes roughly 20% of leads into paying jobs averaging around R4,000 each. At 20 leads per R1,600 spend (at R80 per lead), the maths supports this target against the R800 average revenue per lead.
Manual versus automated bid strategies
Bid strategies fall into manual and automated. Manual strategies let you set bids yourself, giving direct control that suits small accounts, tight budgets, or campaigns with too little conversion data for automation to learn from. Automated strategies hand bidding to Google's systems, which set a bid for each auction using signals a person could not weigh in real time, and optimise towards a goal such as clicks, conversions or conversion value. The trade-off is control for scale and responsiveness. Most well-tracked campaigns with enough conversion history do better on automated, conversion-based strategies, while manual bidding remains useful for learning, for very small accounts, and where data is too thin for automation to perform.
How to choose a bid strategy
The right bid strategy follows the campaign's goal and its data. If the aim is traffic, maximise clicks fits; if it is conversions valued equally, Target CPA or Maximise Conversions; if it is revenue where conversions vary in value, Target ROAS or Maximise Conversion Value; if it is visibility, an impression-share strategy. The second question is whether you have the conversion data automated strategies need, since without enough history they cannot learn, so new campaigns often start simpler and switch once data accumulates. Match the strategy to the objective and to the data available, and set any target from real, achievable performance rather than an aspirational number that would starve the campaign.
FAQ
Which bid strategy should a new South African Google Ads advertiser use?
New advertisers without conversion data should start with Manual CPC or Maximise Clicks to gather initial traffic and conversion data. Once you have accumulated 30 to 50 conversions per month, transitioning to Target CPA or Maximise Conversions gives Google's algorithm enough data to optimise bids effectively and typically reduces cost per conversion over time.
What is the difference between Target CPA and Target ROAS bid strategies?
Target CPA sets bids to get as many conversions as possible at your specified cost per conversion, treating all conversions as equal value. Target ROAS sets bids to maximise the total value of conversions relative to your spend target. Use Target CPA when all conversions have similar value, and Target ROAS when conversion values vary, such as in e-commerce with different product price points.
What is the difference between a bid strategy and Smart Bidding?
A bid strategy is any approach to setting bids, manual or automated. Smart Bidding is the specific group of automated strategies that optimise towards conversions or conversion value, such as Target CPA and Target ROAS. Smart Bidding is a subset of automated bid strategies.
Should new campaigns use automated bidding?
Automated conversion-based strategies need conversion history to learn from, so a brand-new campaign often starts on a simpler strategy, such as maximise clicks or Maximise Conversions, to gather data, then switches to a target-based strategy once enough conversions have accumulated for reliable optimisation.