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What is the exact formula used to calculate the CPC bid in the conversion optimizer?

Visitor ✭ ✭ ✭
# 1
Visitor ✭ ✭ ✭

I believe the tuorials state that the CPA bid is multiplied by the predicted conversion rate?

 

But what is the variable for the predicted conversion rate?  Is this data transparent or does AdWords keep it hidden?  If transpaarent is there a way to calculate it on your own?


Thanks

1 Expert replyverified_user

Re: What is the exact formula used to calculate the CPC bid in the conversion optimizer?

Explorer ✭ ✭ ☆
# 2
Explorer ✭ ✭ ☆

As I understand it, the predicted conversion rate will be calculated for each query individualy based on a lot of historical data.

I can't believe Google would share such information out in the open.

Re: What is the exact formula used to calculate the CPC bid in the conversion optimizer?

Top Contributor
# 3
Top Contributor

Hi dogtown,

 

First of all there is a difference when we speak about CPC bdding or CPA bidding. CPA bid is the maximum amount you are willing to pay for a conversion whereas CPC is simply Cost per Click, which might or might not result in a conversion.

 

When we use Conversion Optimizer, we don't actually have to manually make the bidding changes at keyword level and the Conversion Optimizer automatically adjusts the bids so that you reach you exact CPA goal which you have set. 

 

Adwords Conversion Optimizer actually considers your past campaign data and see how the coversion flow has been. Based on that, optimal cost per acquisition is evaluated.

 

Below are some references for more details:

 

Conversion Optimizer

What is CPA

Recommended CPA by Google

 

Hope this helps!

Pankaj