What is a bidding strategy?
A bidding strategy is the method you use to determine how much you’re willing to pay for your online ads. The goal is to allocate your budget wisely so that you pay the right amount for each impression or interaction while also achieving your marketing goals. When working with platforms such as Google Ads or social media sites like Facebook and Instagram, this strategy serves as your guiding tool for getting the most out of the money you invest in advertising.
In other words, your bidding strategy helps ensure that your ads are not only seen but also generate value. It determines whether you optimize for the most clicks, the lowest cost per conversion, or the highest return on ad spend (ROAS). Therefore, your choice of strategy is closely tied to your overall digital strategy and the goals you’ve set for your online presence.
How do you use a bidding strategy?
You use your bidding strategy to control how your ad budgets are spent across campaigns, platforms, and audiences. It acts as a predefined set of rules for your bids—whether you want full control or to leave some of it to automation.
If you use manual bidding, you set your own maximum click prices and adjust them regularly based on performance. This requires you to analyze data on an ongoing basis and understand your target audience’s behavior. Conversely, with automated strategies such as Smart Bidding, you let the algorithms do the work for you. Here, the system takes into account data such as time of day, device usage, location, and the likelihood of conversion. This means that each bid is adjusted in real time.
In practice, a bidding strategy cannot stand alone. It must work in tandem with both your keyword strategies and your ad content. For example, if you’re running SEO and SEM campaigns in parallel, you can use your organic search data to refine your bids and identify the keywords that deliver the greatest value for your paid efforts.
That's why you need a bidding strategy
A well-thought-out bidding strategy is crucial because it directly links your campaign budget to your results. Without a clear strategy, you risk paying too much for irrelevant clicks or missing out on conversions that could have been profitably acquired.
With a structure for how you place bids, you can instead optimize for the result you want most. This could be the most clicks, the most sales, or the lowest CPA. In other words, you’ll get more targeted advertising, where every krone in your budget contributes to a specific goal. At the same time, you can choose how much control you want to have. Some opt for manual strategies for precision, while others prefer automated systems for scalability and to save time.
From a broader perspective, bidding strategy isn’t just about finances—it’s also about your branding and presence. When you bid strategically, you can ensure that your brand gains visibility at the right times and among the right segments. This supports both your performance goals and your overall marketing strategy.
What types and varieties are available?
There are several bidding strategies available, and the choice depends on your campaign goals and how much control you want to have:
- Manual bidding – You set the maximum cost-per-click (CPC) bids yourself and adjust them based on performance. This strategy gives you full control but requires ongoing monitoring.
- Automatic bidding – The platform automatically optimizes to maximize clicks within your budget. This saves time, but requires you to trust the algorithm’s assessments.
- Extended CPC (ECPC) – A hybrid of manual and automatic bidding, where the platform adjusts your manual bids up or down based on the likelihood of a conversion.
- CPA-based bidding – The system optimizes based on the maximum amount you’re willing to pay per conversion. This approach focuses on concrete results rather than traffic volume.
How do you apply your knowledge of bidding strategy in practice?
To get the most out of your bidding strategy, you need to continuously adjust and analyze your results. Start by defining what you want to achieve—is the goal clicks, sales, or brand awareness? Then use relevant KPIs such as CPC, CPA, or conversion rate to measure performance and determine whether the strategy is delivering the desired results.
In Google Ads, you can use different strategies at the campaign or ad set level. This provides flexibility, allowing you to tailor your approach to specific audiences or product categories. On social media, you can apply similar logic—for example, by adjusting bids depending on whether you’re focusing on traffic, leads, or engagement.
If you combine your bidding strategy with robust data collection through tracking and conversion measurement, you’ll gain the insights needed to optimize even more precisely. This type of performance analysis is also valuable for other disciplines, such as SEO and digital design, because it provides insight into which messages and visual elements actually help your ads perform better.
What should you keep in mind?
When working with bidding strategies, it’s important not to leave everything up to the algorithm without evaluating the results. Although automated systems like Smart Bidding can deliver good results, they need properly set up conversion goals and up-to-date data to function optimally. Always make sure your metrics are accurate and that you’ve defined which actions you actually count as conversions.
It’s also a good idea to test different bidding strategies, as performance can vary depending on the campaign type, industry, and season. For example, you can experiment with an account where you use manual bidding for low-competition keywords and automated bidding for more competitive areas. That way, you can take advantage of both approaches without compromising your budget.
Ultimately, think of your bidding strategy as a dynamic part of your marketing efforts. It needs to evolve as your goals change—and as data points to new opportunities. This requires ongoing evaluation and collaboration between strategy, content, and analytics, so that your overall advertising efforts are always moving in the right direction.
