2.1K members online now
2.1K members online now
Welcome to the Official Google AdWords Community
Find optimization tips and how-to guides and videos by the Google team, AdWords Experts and other industry experts
star_border
Top Contributor

Determine Bid Strategy Based on Your Conversion

 

AdWords features with various types of bidding strategy to get the optimum results. The advertisers choose the bidding strategy as per their advertising objective. Conversion Optimizer is one of them, that works, based on the conversions. Conversion Optimizer is set with the objective of getting maximum number of conversion within the defined Cost-Per-Acquisition (CPA) Bid.

 

What is Cost-Per-Acquistion (CPA) Bid:-

 

Conversion Optimizer is good for advertisers with direct response goal oriented campaigns. The Conversion Optimizer is a multidimensional tool that makes the campaign Automated. It allows the advertisers to set the bid for actual conversion, and this feature is known as Cost Per Acquisitions (CPA) Bidding.

 

How Conversion Optimizer Works:-

 

CPA Bidding.png

 

Although the name suggests Cost per Acquisitions bidding, an advertiser is charged on the basis of Click. When you define a CPA, the AdWords system uses a several factors to determine the CPC bid on behalf of you to maximize the chances of conversions with defined CPA. It uses different types of data model to generate the CPC bids that are likely to define the ad positions and placement that attract both Click and Conversions. 

 

Conversion-Optimizer.png

 

 These Models includes campaign’s past performance data as well as some external factors such as user’s locations, languages, devices, browsers and operating system, ad positions and its placements, time and competitions. These all  can be used by AdWords to define the predictive CPC bids to win the auction so that users will likely to convert.  We cannot have access of all these data and factors as an advertiser, if we use manual bidding. 

         Thus using the Conversion Optimizer, AdWords system is allowed to judge the aggregated performance of all ads and keywords that has been shown on Placement, Ad positions and Audiences. AdWords systems build predictive CPC bids that attract both Clicks and Conversions within the defined CPA.

 

Requirements of Conversion Optimizer:-

 

In Order to enable the Conversion Optimizer, your campaigns must meet the following minimum Requirements:-

 

  1. Conversion tracking should be enabled or Google Analytics Goal should be imported in your AdWords Account.
  2. Your campaigns must generate at least 15 conversions in the last 30 Days.
  3. Your past Conversion should have been generated at the Same Rate.

How to enable the Conversion Optimizer:-

 

If your campaigns meet the above points, then you can enable the Conversion Optimizer in your campaigns. In order to enable the Conversion Optimizer in the campaigns, you can select the "Focus on Conversion (Conversion Optimizer)-use CPA bids" in your campaigns setting. 

 

After selecting this Option, the system suggests you to start with the Recommended bid based on your past CPC bid and Conversions Data. Until your campaign meets the above three requirements, this button "Focus on Conversion (Conversion Optimizer)-use CPA bids"  is disabled. When you click on " Advanced option", you can see the Max CPA and Target CPA option.

 

Conversion Optimizer enable.PNG

 

Maximum CPA: - Max CPA bid is the maximum amount you are willing to pay for each conversion. However Google has announced that Maximum CPA bid is going to retire in Jan-2014 and Max CPA will automatically switch into Target CPA.

 

Target CPA: - A Target CPA bid is the average amount you are willing to pay for each conversion. After setting the Target CPA bid means you enter an average CPA Value for the Conversion Optimizer to target and AdWords suggests Recommended CPA bid based on your historical data. However an advertiser can start with Custom Bid.

 

Some Points to be Remember for Conversion Optimizer:-

 

  • Conversion Optimizer does not give guarantees that how your campaigns will perform.
  • You may notice increase/decrease in traffic (Click/Impressions), because Conversion Optimizer focuses to get you more conversion instead of traffic.
  • Have seen that Conversion Optimizer works well in matured campaigns means the campaigns which have enough data and inventory such as clicks, impressions, automatic placement site, display URL CTR, landing page history etc.Thus it works on the philosophy – “The More Data, The More Accurate Prediction.”
  • Using the Conversion Optimizer, means less control of campaigns. If you change the landing page, ads, targeting and display URL in bulk, it will adversely impact on your campaigns and may exceed your actual CPA and decrease the number of conversions.
  • The Conversion Optimizer is not recommended for small budget campaigns.
  • Once you have enabled the Conversion Optimizer in the campaigns, don’t remove the Conversion Tracking, if you remove conversion tracking then the ads in campaigns using Conversion Optimizer will stop running.
  • Conversion Optimizer is not recommended for seasonal campaigns. As Conversions optimizer predicts future based on the campaigns past data. e.g If your campaign collects the data from festival themed GOSF (Great Online Shopping Festival) campaigns, The CPA bid may not be relevant for this because the shoppers buying  behavior change as well as traffic decreases after GOSF.

Gosf Shopping.png

                 (The Keyword search trends)

 

  • Before enabling the Conversion Optimizer, make sure your campaigns have decent impression share. If your campaigns have very low impression share, don’t turn on CPA mode. Once you enable the CPA bidding, you cannot push keywords to gain the impression share.
  • One of the important point is that---you can only use the Bid Modifier at the Device level and “-100%”.  You cannot set the Bid Modifier at the Location and Ad Schedule. However you can use the Day Parting in Conversion Optimizer enabled campaigns.

 

Closing Summary:-

 

It is generally seen, CPA bidding is highly effective. But it cannot be avoided; sometimes it fails because of poor campaign’s strategy.  e.g. campaigns does not have enough data. To get a great result in CPA bidding, your campaigns should be optimized properly before enabling CPA bidding. Though it’s a multidimensional bidding tool, you cannot leave the campaigns completely in automatic mode; you can exclude or add the negative keywords as well as placements time to time.

 

Please put your valuable thoughts in the comment box below, If you have some more tips to handle Conversion Optimizer campaigns in AdWords in order to make them sucessful.

 

about Rakesh Kumar

I have been working on Google Adwords & Bing Ad Center since April 2010. I am Google Adwords Certified in Fundamental and Advance. I have worked on International and Domestic (Indian) campaigns for clients. I have also done extensive in-house campaigns within my organization. I have worked across various verticals and industries. I am very thankful to the Google Team for creating AdWords Community which promotes peer learning and keeps one updated on latest developments in AdWords.

Comments
John Paul Google Employee
January 2014

Rakesh, 

 

Very insightful article! Thank you for sharing it with the Community.

Aarti D
January 2014

Hi Rakesh , 

 

You shared nice article for those whose conversions are already upto 15 in a month but what for those whose not getting 10 conversions in a month with heavy budget  . Do you any suggestion for those guys...   

Rakesh Kumar Top Contributor
January 2014
Hi Aarti, Whether your budget is high or small, If your campaign does not receive atleast 15 conversion in last 30 days, your campaigns are not eligible for CPA bidding. Also if your campaigns only receive 15 conversions in last 30 days, I would not recommend you to use CPA bidding. As I have already explained you that CPA campaigns works well in matured campaigns.
Jeewan G
December 2014

Could you elaborate display URL CTR, landing page history

Labels