Limited by Bid Strategy in Google Ads: What It Means and How to Fix It
Running Google Ads is one of the fastest ways to bring qualified leads to your business. But sometimes you see a message that says “Limited by bid strategy.”
This message means your campaign is performing, but not at its full potential - the bidding rules you’ve set are holding it back.
In this blog, we’ll explain what causes this, why it matters for small-to-medium Australian businesses, and most importantly - how to fix it, based on my experience as Google Ads Consultant.
What Does “Limited by Bid Strategy” Mean?
When you use automated bidding such as Maximise Conversions or Target CPA, Google controls your bids based on your goals and data.
If you see the message “Limited by bid strategy,” it means:
- Your bid settings are too restrictive.
- Google Ads can’t raise bids high enough to compete in some auctions.
- You’re missing impressions and clicks that could bring conversions.
Your campaign is performing below potential because of bid, budget, or target constraints.
Why It Happens
1. Low Max Bid or CPC Limit
If your maximum CPC is much lower than the market average, Google can’t compete effectively.
Example: You cap bids at $3, but competitors are bidding $6–$8. The algorithm can’t increase your bids to win valuable clicks.
2. Unrealistic Target CPA or ROAS
If your Target CPA or ROAS is too ambitious, Google restricts bidding to meet your goal. That means fewer impressions and fewer conversions.
3. Low Conversion Volume
Automated strategies need data. With fewer than 30 conversions in the past 30 days, the algorithm struggles to optimise effectively.
4. Tight Daily Budget
A small budget limits how much data the system can collect and test each day.
5. Narrow Targeting
Overly strict geo, device, or audience settings reduce reach and restrict the algorithm’s flexibility.
Why It Matters for Australian Businesses
For local service providers — whether you’re a lawyer, solar company, real estate agent, tradie, or marketing consultant — being limited by bid strategy means lost opportunities.
- You’re losing impressions: Competitors outbid you for high-intent keywords.
- Conversions drop: With fewer clicks, conversion volume falls.
- Learning slows down: Less data means slower optimisation.
- You waste budget potential: You may underspend daily and see flat results.
Common Bid Strategies and Their Weak Spots
| Bid Strategy | How It Works | Common Limitation | Best Use Case |
|---|---|---|---|
| Manual CPC | You manually set bids for each keyword. | Can underbid if bids are too low. | Full control, when you have time to optimise manually. |
| Enhanced CPC | Google adjusts your manual bids based on conversion data. | Restricted if your max CPC limit is too low. | Useful while building conversion data. |
| Maximise Clicks | Focuses on getting as many clicks as possible. | May drive low-quality traffic if budget is too tight. | Good for brand awareness and early testing. |
| Maximise Conversions | Tries to get the highest number of conversions for your budget. | Needs consistent data; limited if target too strict. | For steady campaigns with clear conversion goals. |
| Target CPA | Aims for a specific cost per conversion. | Limited if target too low or data too small. | For mature campaigns with 30+ conversions/month. |
| Target ROAS | Bids based on expected return on ad spend. | Limited when conversion tracking is inconsistent. | For eCommerce or high-value leads with accurate values. |
How to Identify the Problem
- Go to Campaigns in Google Ads and check the “Status” column.
- Open the Bid Strategy Report for details.
- Compare your average CPC with your bid limits.
- Review budget utilisation — is it fully spent?
- Check conversion volume for the past 30 days.
Example Scenario
A Sydney financial-advisory firm has:
- Target CPA = $50
- Average CPA = $75
- Average CPC = $6
- Max CPC = $5
The campaign becomes limited because Google can’t raise bids above $5 to reach the $50 target. Impressions drop, leads slow down, and CPCs stay low but ineffective.
How to Fix “Limited by Bid Strategy”
1. Relax Your Max Bid Limit
Increase your bid ceiling to give Google room to optimise. For example, if your average CPC is $3, allow a max CPC of $6. The system will test new auctions and gather data.
2. Adjust Target CPA or ROAS
Be realistic. If your last 30 days show a $60 CPA, don’t suddenly drop to $25. Reduce gradually by 10–15% each time and let results stabilise before adjusting again.
3. Increase Daily Budget
If your campaign regularly hits its daily cap, increase budget by 20–30%. More budget allows more auctions and faster optimisation.
4. Improve Conversion Tracking
Ensure all important actions are tracked correctly:
- Website enquiries and form submissions
- Phone calls from ads or landing pages
- Online bookings or purchases
- Micro-conversions like viewing pricing pages
5. Add More Conversion Volume
If you have less than 30 conversions, start with Enhanced CPC or Maximise Conversions to collect more data before switching to Target CPA.
6. Broaden Targeting
Expand location radius or include nearby suburbs. Enable all devices and consider broad-match keywords to increase reach during learning phases.
7. Allow Learning Time
Each change resets Google’s learning phase. Allow at least 7–14 days before making major edits. Avoid frequent adjustments during this period.
8. Combine Smart Bidding with Manual Insight
Check key metrics weekly:
- Search Impression Share
- Top-of-Page Rate
- Average CPC Trends
- Budget Usage
- Conversion Rate and Cost per Conversion
Advanced Fix: Switch Strategy
If the warning continues, consider changing the bidding model entirely.
- Maximise Clicks to Maximise Conversions: Optimise for outcomes, not traffic volume.
- Target CPA to Maximise Conversions: Temporarily rebuild data before returning to Target CPA.
- Target ROAS to Enhanced CPC: Regain control when conversion tracking is inconsistent.
Key Metrics to Monitor After Fixes
| Metric | What It Tells You | Healthy Range / Tip |
|---|---|---|
| Search Impression Share | How often your ads appear vs competitors | 70%+ for branded, 50%+ for generic |
| Average CPC | Cost competitiveness | Align with industry average, not the lowest possible |
| Conversion Rate | Landing page and targeting efficiency | 5% or higher for service campaigns |
| Cost per Conversion | True cost of lead acquisition | Should drop after stable optimisation |
| Budget Utilisation | Daily spend efficiency | If under 80%, bids or targets are still restrictive |
Example Fix in Action
A Sydney solar-energy company ran Target CPA $35 campaigns but kept seeing the limitation warning.
After reviewing data, they found:
- Actual CPA = $60
- Budget = $40/day
- Average CPC = $5
The Fix:
- Raised budget to $60/day.
- Increased Target CPA to $50.
- Allowed 10 days for learning.
Result: Conversions increased 40%, CPA dropped to $45, and the warning disappeared.
Pro Tips to Prevent Future Limitations
- Start new campaigns with flexible bid settings.
- Avoid changing bid strategies more than once per fortnight.
- Monitor search term reports for keyword quality.
- Segment campaigns by intent and location.
- Use Looker Studio and GA4 to monitor performance and limitations.
When to Get Expert Help
If you’ve tried all the fixes and the warning persists, it’s time for a professional review.
A Google Ads Consultant in Sydney can:
- Audit your bidding strategy.
- Fix conversion tracking.
- Rebuild campaign structures.
- Optimise budget allocation.
Final Thoughts
The “Limited by bid strategy” warning isn’t a disaster — it’s a signal that your campaign could perform better with more flexibility.
By loosening bid caps, setting realistic targets, improving conversion tracking, and allowing learning time, you can restore full campaign potential.
