Ranking Google Ads Bid Strategies: Predictability and Control Drive Efficiency

This episode of The Paid Search Podcast dissects the often-overlooked world of Google Ads bid strategies, revealing how seemingly helpful automation can lead to significant financial waste if not properly understood. Chris Schaeffer doesn't just rank these tools; he exposes the hidden consequences of their design, particularly the dangers of unchecked automation and the illusion of control. The core thesis is that while automation promises efficiency, its lack of boundaries can lead to unpredictable and costly outcomes. This analysis is crucial for any advertiser seeking to move beyond surface-level optimization and build sustainable, profitable campaigns. Those who grasp these dynamics gain a significant advantage by avoiding common pitfalls that drain budgets and obscure true performance, enabling them to make more informed, strategic decisions.

The Illusion of Value: Why "Maximize Conversion Value" Is a Budget Black Hole

The most striking revelation from Chris Schaeffer's ranking is the placement of "Maximize Conversion Value" and "Maximize Conversions" at the absolute bottom. The common perception of automation is that it's inherently superior, especially when dealing with complex algorithms. However, Schaeffer argues that without strict boundaries, this automation becomes a liability. "Maximize Conversion Value," in particular, is depicted as a strategy that can bid exorbitant amounts per click with no cap, essentially draining an account's resources without regard for profitability. The analogy here is akin to giving a child an unlimited credit card and telling them to buy whatever they think is valuable. The potential for runaway spending is immense, and the lack of control means that performance can fluctuate wildly, as evidenced by shifting keyword spend over time.

"The absolute worst bidding strategy out there is maximize conversion value... it is essentially taking a a credit card a debit card a bank account and saying hey every time you feel like getting me a click that you think will provide me value dip into my dipping into my credit card balance dip into my bank account just scoop on out some money there you know every day but don't take more than x amount every day right don't go over my budget right it won't go over your budget but it might get you 300 higher cpcs your cost per click might go up significantly higher because it has and that's going to be the recurring issue here about why i'm ranking these the way i'm ranking them it has no boundaries there are no boundaries."

-- Chris Schaeffer

This lack of boundaries is the critical system dynamic at play. The strategy is designed to chase value, but without a defined ceiling on what constitutes an acceptable cost to acquire that value, it can easily overspend. The downstream effect is not just higher CPCS, but unpredictable shifts in keyword performance as the algorithm chases perceived value across different terms, leading to an unstable and inefficient account. The implication is that true value optimization requires more than just an automated pursuit; it demands a human-defined framework of acceptable costs and profitable outcomes.

The "Brother" Problem: Maximize Conversions and the Pursuit of Quantity Over Quality

Following closely behind "Maximize Conversion Value" is its "brother," "Maximize Conversions." While slightly better because it at least focuses on the number of conversions rather than their perceived value, it suffers from a similar fundamental flaw: a lack of discrimination. Schaeffer highlights how this strategy will relentlessly pursue any action that registers as a conversion, regardless of its actual business impact. This can lead to an influx of low-quality leads or unprofitable sales, creating the illusion of success while actively harming the business's bottom line.

The system here is that the algorithm optimizes for a singular, easily quantifiable metric (number of conversions) without understanding the qualitative differences between those conversions. This is where conventional wisdom fails: simply getting more of something isn't always better. The downstream effect is a campaign that appears to be working based on raw numbers, but is actually burning through budget on interactions that yield no profit. The competitive advantage, then, lies in understanding which conversions matter and building strategies that prioritize them, rather than blindly following an algorithm that doesn't. This requires a deeper understanding of business goals than the automated strategy provides.

The Unpredictable Steering Wheel: Target ROAS and the Frustration of Control

Moving into the "mid-tier," "Target ROAS" presents a more nuanced challenge. Schaeffer acknowledges its utility for e-commerce businesses aiming for a specific return on ad spend. However, the primary critique is its sheer unpredictability. Adjusting the target ROAS, a seemingly logical action to guide performance, can lead to erratic shifts in CPCS, impression share, and conversion rates, often in the opposite direction intended.

This is a classic example of a system that appears controllable but behaves erratically. The analogy is a steering wheel that doesn't always respond as expected. You turn it left, and the car might go right, or it might do nothing. The downstream effect of this unpredictability is a loss of advertiser confidence and a reluctance to make necessary adjustments, as any change risks destabilizing the campaign. The delayed payoff of a well-tuned Target ROAS strategy is often overshadowed by the immediate frustration of its capricious nature. This highlights where conventional wisdom--that setting a target will guide performance--fails when the system's internal mechanics are opaque and volatile. The true advantage is gained by those who can navigate this unpredictability or find strategies that offer more consistent feedback.

The Enduring Power of Boundaries: Manual CPC and the Case for Human Oversight

The conversation shifts significantly when discussing "Manual CPC" and "Target CPA." Manual CPC is lauded for its absolute control. Advertisers can set specific bids at the keyword or ad group level, dictating exactly what they are willing to pay. This granular control allows for precise prioritization of traffic based on keyword match types and perceived value. The example of a long-running campaign achieving incredibly low, consistent CPCS for nearly two decades underscores the enduring power of this strategy when wielded with expertise.

"Manual cpc is absolutely the second best google ads bidding strategy period no way and it it it it almost beats out target cpa i'll tell you why i don't but let's let's sing the praises of manual cpc manual cpc is the longest known bidding strategy ever nothing else that i've talked about has been around as long as manual cpc manual cpc is og original it is it's always been around and what you do is you pick a bid you put a number at the ad group or the keyword level and you tell google i want to pay 4 31 as a bid for this and it places you in that auction and then you might pay 4 13 you're really simple you place the bids you have micro control you have absolute finite control of exactly what you want to achieve in google ads there is nothing that can achieve that level of detail in google ads period."

-- Chris Schaeffer

The critical insight here is that while manual CPC offers unparalleled control, its effectiveness is directly tied to the advertiser's understanding of the auction dynamics, ad rank, and market fluctuations. This requires constant vigilance and micromanagement. The system is robust, but it demands a skilled operator. The delayed payoff of manual CPC is the long-term stability and cost-efficiency achievable through meticulous management, creating a moat against less informed competitors. However, the effort required is substantial, a barrier that many are unwilling to overcome.

The Apex of Automation: Target CPA and Predictable Control

Emerging at the top is "Target CPA." Schaeffer positions it as the superior automated strategy because, unlike Target ROAS, it offers a more predictable response to adjustments. While not perfect and still capable of occasional exorbitant bids, its behavior aligns more closely with advertiser expectations when targets are changed. Crucially, it doesn't require the intense, constant micromanagement of Manual CPC.

"But the fact and this is what brings target cpa to my number one bidding strategy is because it doesn't have to be babysat it doesn't have to be managed to the intensity to the consistency that manual cpc does because manual cpc can get out of hand you know you don't touch it for six months and you come back and you're losing positions you're losing ranking because you know the market's changed seasons have changed things are different from summer to winter and your bids need to go up they need to go down new competitor comes in you're being bit you're being outbid on this one you know certain search terms have changed within the keywords and now you need to adjust it target cpa does that automatically and you have the ability to set a boundary of success you can say i want you to achieve leads at 50 a lead 100 a lead 200 a lead and it will try and do that."

-- Chris Schaeffer

The system dynamic here is that Target CPA strikes a balance: it leverages automation to adapt to market changes and manage bids dynamically, but within a framework defined by a cost-per-acquisition goal. This predictability allows for strategic planning and provides a more reliable path to achieving business objectives. The competitive advantage lies in harnessing this automated control without sacrificing profitability, a feat that requires careful setup and ongoing monitoring, but less intensive daily management than Manual CPC. This is where immediate effort (setting up Target CPA correctly) yields a significant long-term payoff by providing both efficiency and a degree of reliable performance.

Key Action Items:

• Immediate Action (Next 1-2 Weeks):
  • Audit current bid strategies: Identify any campaigns using "Maximize Conversion Value" or "Maximize Conversions."
  • Transition "Maximize Conversion Value" campaigns to "Target CPA" or "Manual CPC" with strict bid limits.
  • Transition "Maximize Conversions" campaigns to "Target CPA" and set a realistic CPA goal based on historical data.
  • For e-commerce, evaluate "Target ROAS" campaigns for unpredictable behavior; consider switching to "Target CPA" if performance is erratic.
• Short-Term Investment (Next 1-3 Months):
  • For campaigns using "Manual CPC," establish clear bid limits and review them quarterly to adjust for market changes.
  • For campaigns using "Target CPA," establish a clear, data-driven target CPA and monitor performance closely for any significant deviations.
  • Implement a system for tracking the quality of leads or conversions generated by automated strategies, not just the quantity.
• Longer-Term Investment (6-18 Months):
  • Develop a deep understanding of Google Ads auction insights and search impression share metrics to inform bid strategy adjustments, especially for "Manual CPC."
  • Continuously test and refine "Target CPA" goals based on evolving business profitability and market dynamics.
  • Build in a feedback loop where sales or lead qualification data informs bid strategy adjustments, ensuring that automated systems are aligned with true business value.