In my opinion, the optimal choice for new Google Ads Campaigns is to set a “Maximize Clicks” bidding strategy and “Manual Placement”, in order to gather sufficient data about the targeted audience. After gathering sufficient data, the strategy can be switched to “Maximize Conversion” or “Target CPA”.
However, a problem arises when “Bidding Cost Cap” is left without setting maximum value, for the sake of allowing room for Google’s algorithms to optimize the parameters of the ad. This can result in Bidding Overshooting, leading to wasted and high-cost bids with no substantial conversions.
For example, if the average competition for a certain keyword is 0.2 cents, you might end up paying more than $2 per click, hence deplete your budget.
The solution is to set a Bidding Cost Cap value higher than the average CPC, such as 0.3 or 0.4 cents. This will be good enough to guide the algorithm to understand your ad better and at the same time to avoid the risk of depleting your budget in thin air.
#google_ads_tips