Value-based bidding is a powerful bidding strategy for the Google Ads platform. It enables advertisers to optimize their pay-per-click campaigns by bidding based on the relative value of different conversion types.
Rather than treating all conversions equally, value-based bidding allows you to communicate to Google which conversions drive the most sales. Then Google will learn to prioritize those conversion actions.
Ed Goss, Managing Director of Ten Thousand Foot View, joined us on the Hot Pursuit Podcast to explain how you can significantly improve the return on ad spend (ROAS) of your PPC campaigns with value-based bidding.
Benefits of Value-Based Bidding
- Prioritize high-value conversions. By assigning relative values to different conversion actions, you can optimize campaigns to prioritize the most valuable leads and customers. For example, you may value a demo request more than an email signup.
- Improve lead quality. Feeding back lead quality data to Google Ads enables the algorithms to find more prospects that match your ideal customer profile. This can reduce junk leads and improve overall lead quality.
- Monitor Your ROAS. Focusing spend on high-value conversions and audiences should increase return on ad spend compared to bidding strategies that treat all conversions equally.
Tips for Implementing Value-Based Bidding
- Know your numbers. Analyze historical data to determine the relative value of different conversion types based on metrics like lead-to-customer rate and average order value.
- Set up conversion values. In Google Ads, assign values to each conversion action to inform automated bidding. For example, a phone call may be worth $20 while a form fill is worth $10. You can even keep it simpler than that, using values like $1 and $2.
- Capture key data. Use hidden form fields and CRM integrations to pass important data like lead score, company size, or deal stage back to Google Ads. This powers better optimization.
- Test and iterate. Start with a basic value-based bidding model and progressively refine it as you gather more data. Regularly review performance and adjust values as needed.
While value-based bidding requires additional conversion tracking setup, the performance gains are well worth the effort for many advertisers. By aligning bids with your true business goals, value-based strategies can help you get more from your PPC investment.
To learn more about value-based bidding best practices, check out Google’s official guide. And if you need help implementing value-based bidding for your campaigns, get a free consultation from Ten Thousand Foot View.