Google Ads Bid Floors & Auction Reserve Prices

You've probably heard that you only pay one penny more than your closest competitor to win a Google Ads auction. Well, that's not always the case.

What if you have zero competitors... and your ad still doesn't show?

Assuming there are no ad/account violations, and your targeting is correct, bid floors (or auction reserve prices) could be the culprit. These are essentially the minimum bids Google sets behind the scenes. If you don't bid high enough, your ad won't appear – even if you're the only advertiser in the auction. It is a bit more nuanced than that, but that is the gist of it.

My Thoughts: Why Do Bid Floors Exist?

• Quality Control: They can help keep out low-quality or spammy advertisers. It creates a 'barrier to entry' of sorts as the cost per click would be higher than if the bid floor didn't exist.
• The Downside: Google isn't clear about how these prices are set, leaving advertisers (especially small businesses) unsure about the cost per click that they will pay. You may have to run your ads for a while to be able to have a good gauge.

Are Bid Floors Rare in Auctions?

Not exactly, they are actually pretty common. But the lack of transparency is frustrating to me. Knowing why a certain bid floor exists would help businesses plan their budgets better.

What You Can Do

• Focus on Quality Score: Great ads and landing pages can lead to high Quality Scores which will help you in any Google Ads auction to pay the lowest CPC necessary.
• Test Bidding Strategies: If you are in an industry with high bid floors, focusing on your Return-On-Ad-Spend (ROAS) or Cost-per-Acquisition (CPA) is essential. Getting enough data in your account  for Google's automated bidding to do its thing could be the best path forward. It doesn't matter if your cost-per-click is super high if your efficiency and account performance is exceeding your goals.
• Don't Assume a Low CPC: Be prepared for potentially higher bids than you expect, especially in niche markets before you start your first Google Ads campaign. (if you want tips to get cheaper clicks in general, check out this article.

Understanding bid floors is key to making Google Ads work for you. It's another reminder that Google Ads is not always a straightforward bidding game!

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