When setting up and managing a Google Ad Campaign, you have to make several important decisions. One of those decisions is how much you’re willing to pay per click and whether or not you should try to focus on getting the cheapest clicks possible.

Some would say obviously the lower you pay per click the better right? Not exactly, sometimes you can actually see a lower cost per conversion & higher return on ad spend ROAS by paying MORE per click and here’s why.

The CPC for a given search auction is determined mostly by competition. The more advertisers there are bidding for a given search auction the higher the CPC is on average. Some advertisers are using automated bid strategies like Max Conversions however, which means they’re not manually setting their bids for each auction, they’re letting Google Ads determine how much to bid per click for a given auction.

What ends up happening in this case is Google learns overtime which type of user is most likely to “convert” or become a lead and will bid higher for these users than those who are unlikely to convert. The same thing happens if you’re using Target CPA or Target ROAS bid strategies.

Now if you’re coming into these auctions just trying to get the cheapest CPC possible, first off you’re going to get fewer clicks in general simply because you’ll be priced out of most auctions. 

You’ll also mostly get clicks from users who are unlikely to convert or become a lead. Why? Because most of the higher quality clicks that are likely to convert are going to advertisers who are using automated bid strategies that will dynamically increase a bid for an auction it thinks is likely to generate a conversion. The bidding algorithm has more data points than you do about someone performing a search query and knows if a user is more likely to convert based on historical data. 

Does this mean you should always use a bid strategy like max conversions, target ROAS and target CPA?

Not necessarily. If you have a really low budget and your campaigns aren’t receiving at least 15 primary conversions a month, which is necessary for bid strategies like Max Conversions to perform optimally, then you might be better off using manual CPC or maximize clicks bid strategy. Just don’t focus on getting the cheapest clicks possible and maintain healthy CPC bids to compete in the higher quality auctions that result in conversions. This you can do even with a lower budget.

I usually always recommend having a daily budget that is at least 10-20x the average CPC for your target keywords in your target location, so you can generate more conversion volume on a monthly basis and utilize bid strategies like Maximize Conversions which generally performs better than manual CPC or max clicks bid strategy.