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conversion optimizer

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# 1
Visitor ✭ ✭ ✭

How does Conversion Optimizer use an advertiser’s cost-per- acquisition (CPA) bid to determine the optimal equivalent cost-per- click (CPC) bid for each auction?

 

What I have read is that Conversion Optimizer automatically finds the optimal equivalent CPC bid for your ad each time it's eligible to appear depending on historical data. Does that mean actual CPC bid is based on current max CPC setting or is there any specific formula to calculate? 

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Marked as Best Answer.
Solution
Accepted by Rakesh Kumar (Top Contributor)
September 2015

Re: conversion optimizer

Participant ✭ ✭ ☆
# 2
Participant ✭ ✭ ☆
Hi Tarana,

Conversion Optimizer uses historical data to set a CPC bid for each auction based upon the likelihood of conversion. It also avoids auctions that are deemed unprofitable based upon historical data. You'll still pay on a per-click basis but with the goal of achieving more conversions at the CPA bid that you set. That means that you won't be setting a max CPC in campaigns that are using conversion optimizer - Google will automatically determine a bid for you and then what you'll actually pay depends on what the next ranking advertiser is bidding (like with any other AdWords auction). This is a great video to watch to have a better understanding of the auction: https://www.youtube.com/watch?v=PjOHTFRaBWA&feature=youtu.be

In short, though, you would just set the CPA bid (no CPC bids) and Google would take it from there.

If you do decide to use CPA bidding, try not to set the CPA bid lower than what Google recommends, initially, because this could cause you to see a decrease in conversion volume.

Hope this helps!

View solution in original post

Marked as Best Answer.
Solution
Accepted by Rakesh Kumar (Top Contributor)
September 2015

Re: conversion optimizer

Top Contributor
# 3
Top Contributor
Hi Tarana,

In 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.
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.

More info can be found here :-
https://www.en.adwords-community.com/t5/User-Articles/Determine-Bid-Strategy-Based-on-Your-Conversio...
--Rakesh Kumar, AdWords Top Contributor , Twitter | Linkedin | Community Profile
Did you find any helpful responses or answers to your query ? If yes, please mark it as the ‘Best Answer’

View solution in original post

Marked as Best Answer.
Solution
Accepted by Rakesh Kumar (Top Contributor)
September 2015

Re: conversion optimizer

Participant ✭ ✭ ☆
# 2
Participant ✭ ✭ ☆
Hi Tarana,

Conversion Optimizer uses historical data to set a CPC bid for each auction based upon the likelihood of conversion. It also avoids auctions that are deemed unprofitable based upon historical data. You'll still pay on a per-click basis but with the goal of achieving more conversions at the CPA bid that you set. That means that you won't be setting a max CPC in campaigns that are using conversion optimizer - Google will automatically determine a bid for you and then what you'll actually pay depends on what the next ranking advertiser is bidding (like with any other AdWords auction). This is a great video to watch to have a better understanding of the auction: https://www.youtube.com/watch?v=PjOHTFRaBWA&feature=youtu.be

In short, though, you would just set the CPA bid (no CPC bids) and Google would take it from there.

If you do decide to use CPA bidding, try not to set the CPA bid lower than what Google recommends, initially, because this could cause you to see a decrease in conversion volume.

Hope this helps!
Marked as Best Answer.
Solution
Accepted by Rakesh Kumar (Top Contributor)
September 2015

Re: conversion optimizer

Top Contributor
# 3
Top Contributor
Hi Tarana,

In 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.
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.

More info can be found here :-
https://www.en.adwords-community.com/t5/User-Articles/Determine-Bid-Strategy-Based-on-Your-Conversio...
--Rakesh Kumar, AdWords Top Contributor , Twitter | Linkedin | Community Profile
Did you find any helpful responses or answers to your query ? If yes, please mark it as the ‘Best Answer’