Are Bid Limits Killing Your Google Ads Performance?

By: Jyll Saskin Gales, Google Ads Coach

Let's have a frank conversation about bid limits in Google Ads. You know, those caps you can put on your cost-per-click (CPC) bids, even when using an automated bid strategy? I'm going to make a bold statement here: bid limits are usually a terrible idea, and they could be the very reason your campaigns are underperforming.

The Problem with Bid Limits in Google Ads

Here's the thing: bid limits completely undermine the whole point of using smart bidding strategies in Google Ads. Smart bidding is designed to optimize your campaigns for your business goals, whether that's maximizing conversions, hitting a target CPA, or achieving a specific return on ad spend (ROAS).

But when you set bid limits, you're essentially telling Google Ads, "Don't spend more than this amount on a click, even if it means missing out on valuable conversions." You're prioritizing one of many inputs (cost per click) over your desired end results. It's shooting yourself in the foot, then being shocked when you don't win the race.

A Real-Life Bid Limits Cautionary Tale

I know this is a contrarian take, so let me back it up with a specific real-life example of the dangers of bid limits.

I recently worked with a client who had been using bid limits on their Google Ads campaigns. Their average CPC was $2, and their conversion volume was dismal – only 6 conversions in 30 days! – and their cost-per-acquisition (CPA) was $120.

I convinced them to ditch the bid limits and let Google Ads do its thing on a Maximize Conversions bid strategy. Guess what happened? Their average CPC jumped up to $28, but their conversion rate skyrocketed! They got 3 conversions in just the first 4 days, and their CPA dropped to $108. So, much higher CPCs, but lower CPA and more conversions.

But it gets even better. After two weeks, their average CPC settled at $10, their CPA plummeted to $68, and they had achieved 24 conversions – that's four times as many conversions in half the time for half the CPA, even though the CPCs were initially five times higher.

Buh-bye bid limits forever.

Why High-Quality Clicks Cost More (and That's Okay!)

Think of it this way: the most valuable customers are often the ones who are willing to pay more for the products or services you offer. They're also the ones who are most likely to convert. And guess what? Those high-quality clicks are going to cost you more, because your competitors are bidding for them, too.

But that's okay! Because those clicks are worth it. They're the ones that are going to drive the most revenue for your business. When you set bid limits, you're essentially telling those valuable customers to go elsewhere. Your bid limits are a gift to your competitors.

Exceptions to the Rule

Now, I'm not saying that bid limits are always a bad idea. There might be some rare situations where they make sense. But in general, I strongly advise against using them, especially if you're running a new campaign.

If you want to get the most out of your Google Ads campaigns, ditch the bid limits and let smart bidding do its job. Your bottom line will thank you.