When you launch a new Google Ads campaign you invariably need to choose an aggressive or conservative strategy. Which option is best?
An aggressive approach, which we’ll call “top-down” gets its name from the top-line of a P&L (Profit & Loss) or Income statement. Wherein the top line is revenue, this approach is aimed at driving high conversion volume. As such, there isn’t much concern for the profit margin.
A conservative approach, which we’ll call “bottom-up” gets its name from the bottom-line of the same financial statement. Wherein the bottom line is profit, this approach is geared towards driving conversions at a profitable margin. In this case, there isn’t much concern for the conversion volume.
What are the characteristics of a Top-Down campaign?
An aggressive paid search campaign will contain mainly broad match keywords, high bids, and a high budget. You would typically use high manual or “target impression share” or “maximize conversions” automated bidding.
Optimization can occur quickly through the identification of winning search terms and ads.
What are the characteristics of a Bottom-Up campaign?
A conservative Google Ads campaign strategy will contain a small number of exact, phrase, and possibly broad-match-modified keywords, low bids, and a low budget. CPA (cost-per-acquisition) would be your automated bidding strategy of choice here.
This campaign strategy is designed to quickly get the cost per conversion to a profitable target at the expense of conversion volume, rapid scaling and optimization.
What are the advantages and disadvantages of a Top-Down approach?
- Drive a high number of conversions (leads or sales) almost immediately
- Fast-track scaling by conquesting keywords
- Generate a lot of conversion data for the purposes of fast campaign refinement and optimization
- Low-quality irrelevant search terms waste a lot of ad spend
- Sales may not be profitable for some time after the campaign launch
What are the advantages and disadvantages of a Bottom-Up approach?
- Typically very little wasted ad spend
- Campaigns are often profitable shortly after launch
- Campaigns may be difficult to scale up without broad match keyword conquesting
- Very low return/conversions for some time after launch
The reality is that most advertisers compromise between conservative and aggressive campaign strategies. Maybe they set a target CPA 50% higher than optimal, run a handful of broad match keywords and start with a budget that’s somewhat smaller than where they want to be in a few months. This is a perfectly valid way to proceed. It’s also fine to pivot if what you’re doing isn’t working.
Importantly, you must have an end in mind when starting a new campaign. Whether you start with a top-down or bottom-up approach, you will eventually need to achieve profitability by driving both conversion volume and an affordable CPA.