Bid strategy

Plain answer

A bid strategy is the instruction you give an ad platform for how to bid in its auctions — set prices by hand, chase the most clicks, or target a cost or return and let the algorithm bid for you. It decides how aggressively your budget competes, and for what.

How bid strategies actually work

Every impression is auctioned, and something has to decide your offer each time. Manual bidding means you set the ceiling per click. Automated strategies bid dynamically per auction, using signals you can't see — device, time, the person's history — in service of the goal you chose: maximize clicks, maximize conversions, hit a target cost per acquisition, or hit a target return on ad spend.

Manual vs automated bidding: which should you use?

Automated bidding is genuinely better at per-auction pricing than any human — when it has conversion data to learn from. That's the hinge. A new account with no conversion history gives the algorithm nothing to optimize toward, so "maximize conversions" degenerates into "spend the budget." A workable sequence: start simple while conversions accumulate, then graduate to target-based strategies once the account converts steadily. The strategy should mature as the data does.

How do you set the target?

From your own economics — the same arithmetic as your target CPA: what a customer is worth, and what share of that you'll pay to win one. Set a target the math supports, then leave it alone; algorithms recalibrate when targets change, and owners who nudge the number weekly keep their campaigns permanently in re-learning mode. One warning: a target set too tight doesn't make ads cheap, it makes them invisible — the algorithm simply stops entering auctions it can't win at your price.

Field note from Tomas

I've seen mismanaged accounts where accumulated small errors — slightly wrong targeting, ads running when buyers weren't looking — cost the equivalent of a brand-new Ford F-150. If your buyers search Monday to Friday, weekend spend is leakage. Figure out the days and hours your buyers can actually be influenced, maximize there, and ruthlessly exclude the rest.

What this means for your ads

Pick the strategy that matches your data maturity, give it a margin-based target, and judge it monthly on cost per customer. The bid strategy is the autopilot setting — worth choosing carefully, and worth auditing exactly because it's automatic.

Tomas Kolafa

Founder, Bytown

14+ years running paid acquisition, managing $85M+ in ad budgets — co-founded the ad agency Growth Media, led marketing ($0–50M) at RVezy.com. He's spent the budgets, run the campaigns, and read the reports.