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Changing CPA bid daily, does that hurt conversion optimizer?

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# 1
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I have an application that uses AdWords API to check my stats and update CPA bids.

All my campaigns are for display network target CPA.

I understand that changing ad, keywords, placements, etc. throws off the optimizer, as it needs some new data after the change before it can be effective again.

 

But what about changing CPA bids?

 

I never gave much thought to this. And my application updates the bids daily. The change is usually plus or minus five percent of the existing CPA bid. So it's not huge. But the bids are updated every day.

 

Does that throw off the conversion optimizer in any way?

 

(I would think not, but just want to double-check.)

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Accepted by MosheTLV (Top Contributor)
July 2016

Re: Changing CPA bid daily, does that hurt conversion optimizer?

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# 12
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Hi @bcc1357 how many conversions do you get in, say, a 30-day period?

 

I've been in touch with Google and apparently there is a problem with changing bids frequently, but how big the problem is depends upon how many conversions you're getting.  The problem becomes larger the fewer the conversion numbers as the learning process is slower.  Take a look at this guide, specifically the bit on page 11:

 

http://services.google.com/fh/files/blogs/search_automated_bidding_guide.pdf

 

Jon

 

 

AdWords Top Contributor Google+ Profile | Partner Profile | AdWords Audits

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Re: Changing CPA bid daily, does that hurt conversion optimizer?

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# 2
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Tough question ....

I've scoured the Internet and there's little to no talk of the negative effects of changing your CPA Objective/Goal but keep in mind that without a steady CPA goal you're losing the opportunity to analyze your cost/benefit analysis of significantly raising or lowering your CPA.

If your 3rd party tool has found a way to work the system by making micro adjustments to the CPA that's great but you do lose out on the ability to know if you're losing out on potential conversions if you raise your bid by more than 15-30% or whether you manage to drop your cost/conv. by significantly lowering your target CPA.

Just my thoughts on the matter.
-Josh
Joshua, Top Contributor
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Re: Changing CPA bid daily, does that hurt conversion optimizer?

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# 3
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It's not to "work the system".
Basically, the application checks yesterday's ad spend and 7-day-average ad spend. And based on that, either increases or decreases target cpa bid by 5%.
If the ad spend is to high, then it decreases the bid, and if too low then increases the bid.
I use accelerated delivery and daily budget is set much higher than the actual ad spend. So I'm not capped there.

I've been using such setup for a while now. But now I'm thinking maybe such daily changes actually disrupt the work of the conversion optimizer.




Re: Changing CPA bid daily, does that hurt conversion optimizer?

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# 4
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Without any definitive answer, my natural inclination is that you should avoid changing the CPA goal on a regular basis but there is nothing that explicitly saids not too ....

Sorry I couldn't be more helpful. : /
Joshua, Top Contributor
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Re: Changing CPA bid daily, does that hurt conversion optimizer?

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# 5
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Hi @bcc1357 the CPA bidding model takes weeks to reach its full potential and operate at its most efficient.  It goes through a learning stage that'll last at least a week and may be repeated before fully optimised.  Any change in the system and it's back to square one.

 

So, if you're changing your CPA bid daily, you're effectively disabling the bidding optimisation.  The system will never complete its learning cycle and never be able to apply effective bids.

 

You can view a chart of the learning process and current status of bidding strategies by looking in the Shared Library->Bid Strategies section of AdWords, then clicking on the relevant strategy. where you may see a graph like this (although I suspect yours will look quite different):

 

roas.png

 

 

 

 

 

 

 

 

 

 

Note that this is plotted daily on the x-axis, so each dot represents a day.  As you can see, in this case the learning period lasted 6 days, but I've seen others that have been much longer.

 

Jon

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Re: Changing CPA bid daily, does that hurt conversion optimizer?

[ Edited ]
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# 6
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That makes sense for when a change is made for ads, keywords, placements, etc.
But are you sure this also happens when changing the value of the bid?

I use target cpa setting in the campaigns, not a portfolio strategy, so I can't really see such graph, which is a shame.
Maybe I should switch to a portfolio bid rather than have each campaign individually set to target cpa.

Re: Changing CPA bid daily, does that hurt conversion optimizer?

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# 7
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@bcc1357  It seems I owe you an apology!  According to this page:

 

http://www.google.co.uk/intl/en_au/adwords/conversionoptimizer/bestpractices.html

 

(#8 under "10 Important Things") you can change your Max CPA bid as often as you like!  I have to say, this seems to contradict what we were told recently at a presentation from Google, so I'm going to investigate further.  However, in the meantime, it appears you should have no problems.

 

 

Jon

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Re: Changing CPA bid daily, does that hurt conversion optimizer?

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# 8
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Yeah, I read that page too. But for a different international market. Seems like this particular help page was only posted for international markets.
And it uses old terminology. So probably something before the portfolio bidding was implemented, and prior to them switching the name from CO to Target CPA, even with standard (non-portfolio) bidding.

This is actually the only place I ever found it stated that you can change CPA without disrupting the optimizer.

Still, I would think minor gradual changes to the bid would not cause the optimizer to discard existing data and start re-learning again. I just can't think of a reason Google engineers would have to force a re-learn in such situation.

Re: Changing CPA bid daily, does that hurt conversion optimizer?

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# 9
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@bcc1357

Let me know how it goes, I'm also interested to learn the answer to this question!

Best of luck!
Joshua, Top Contributor
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Re: Changing CPA bid daily, does that hurt conversion optimizer?

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# 10
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This might be interesting.

 

I spoke to an AdWords rep today over a somewhat related issue. And she sent me a a white paper on bidding.
Here is a paragraph from that paper that's relevant to what we are discussing.

 

=========================================

Adjusting performance targets in advance of short-term conversion changes
AdWords bidding algorithms work to prevent hyperactivity and sudden bid changes based on limited data to ensure
that they optimize based on real performance trends rather than random fluctuations. At the same time, we recognize
that advertisers often have known events that will impact conversion performance for a short period of time.
For example, they may be planning a weekend sale, performing website maintenance or even running a TV spot
during the Super Bowl.
To accommodate these brief, anticipated changes in performance, we recommend that advertisers adjust their bidding
targets (target CPA or target ROAS) proportionately to the predicted increase or decrease in conversion rate. This way,
they can adapt automated bidding to short-term changes without disrupting performance in the longer-term.

=========================================

 

So it seems like it's OK to change the CPA bid. At least, it shouldn't throw off the conversion optimizer. And if anything, this approach seems to hint that the system will simply be more or less aggressive given the newly set CPA bid value. Which seems logical to me.